In this video, we walk you through planning your debt management strategy with Financial Mappers.
Welcome to Financial Mappers!
In this example, we’re going to talk you through planning your debt management strategy with Financial Mappers.
Financial Mappers helps you separate your debt into personal lifestyle debt and wealth creation debt.
The personal budget account is where we’ll be planning all credit card and personal loans debt … … whereas the transaction account is used for planning home and investment loans.
Let’s start by setting up our credit card debt. First, setup the account according to your current credit card … … You can configure the interest rate format … … and your payment schedule, in many different ways.
You may also have a personal car loan, so let’s also set that one up … … Here, you have the option of interest only, principal and interest, or a combination of both.
To reduce interest costs, you could also consider making additional payments to reduce the loan time.
The Credit Card and Personal Loans are paid for by the Personal Budget … … You can also use the budget to create a detailed list of living expenses.
In the Home Loan accounts, there are extra options to set up your account. These include Introductory Interest Rates, Loan Redraw Facility, and Refinancing of the loan.
Want to see what it takes to pay your loan off sooner? By adding additional payments, you can see that the loan is paid off 10 years sooner, saving plenty of interest costs.
It’s also quite common to refinance your home loan to help fund future home improvements. You can see that the two loans are kept on the one page so you can quickly adjust the terms and see the effect.
The home loan accounts also include a Redraw Facility. This allows you plan to redraw additional payments which have been made.
Investment Loans appear in their own accounts. Here, loan expenses are allocated first, before any other allocation of savings.
This allocation, together with any balances not already allocated, are deposited to the Transaction Account, where both loan payments and costs are paid.
Once complete, review the Debt Management Report. Scroll down the page for strategies to reduce your debt, and detailed loan information for the first 5 years of the plan.
This is a thorough report of debt, and gives you access to lots of useful data, including…
- Your Debt Servicing Ratio
- The Interest Rate Risk Assessment
- Using a percentage of optional living expenses to your repay debt
- Loan Balances and Repayments
- And Capital and Interest Repayments
Thanks for watching. Be sure to check out our other videos at financialmappers.com.au.
Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.