This document provides five steps to becoming debt-free: 1) Learn your current financial situation by reviewing credit reports and understanding your credit score. 2) Create a realistic budget that allocates at least 10% of income to debt payments. 3) Talk to lenders about lowering interest rates or refinancing loans. 4) Look for ways to reduce discretionary spending through small lifestyle changes. 5) Prioritize paying off debts from most to least valuable assets, focusing on high-interest debts first. The overall goal is to eliminate debt payments and interest expenses to free up cash flow.

1. Five Steps to Debt-free Living

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At SunTrust, our goal is to provide the tools and
information you need to make smart decisions along your
path to financial well-being – and help you be ready for
the future.
An important part of that path is
eliminating debt so you can move forward.

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1.1. Learn where you stand today.
2.2. Create a realistic budget.
3.3. Talk with your lenders.
4.4. Look at how you spend and save.
5.5. Prioritize your debt payments.

4. Step 1: Learn Where You Stand Today

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View your credit reports from all three credit monitoring
companies.
 The main companies in the U.S.:
 These companies track repayment history on credit cards, mortgages,
student loans, as well as bankruptcies and other credit-oriented
financial data.
Step 1: Learn Where You Stand Today
Equifax.com
Experian.com
TransUnion.com

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Step 1: Learn Where You Stand Today
You have the right to receive a free
annual credit report from each
credit reporting company.
 Order copies one of three ways.
• Online - visit
AnnualCreditReport.com to
request and view reports
• Phone - call 1.877.322.8228
• Mail - complete and mail
Annual Credit Report
Request form
“Things have been so tough for us,
we’ve been afraid to look at our credit
report.
But we want to make sure we’re ready
to rebuild and get back to living as the
economy improves.”

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Step 1: Learn Where You Stand Today
Review your credit report, making sure to check for errors.
Account
information
and payment
history
Account
inquiries
Account
contact
Personal
information

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Step 1: Learn Where You Stand Today
Don’t be alarmed if you find errors –
you can correct them.
 Write a letter outlining any errors.
 Send letter and documentation
by certified mail to credit
monitoring company and creditor.
 Keep a copy of the letter with
your original documentation .
 Expect a response in four
to eight weeks.
 Visit ftc.gov/credit for more
information.
You can use this sample letter to create
your own versions.

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Step 1: Learn Where You Stand Today
Understand your credit score and how it affects your finances.
 FICO scores are available at a nominal cost.
 Scores range from 300 to 850.
It is difficult and costly to obtain
credit with scores in this range.
Scores in this range can save
you thousands of dollars each
year in interest.

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Step 1: Learn Where You Stand Today
Your payment
history
35%
Total amount of
debt you owe
30%
Length of your
credit history
15%
Amount of
new credit
10%
Overall
credit mix
10%
Understand how your credit score is calculated.

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Step 1: Learn Where You Stand Today
 Pay all bills on time.
 Pay off overdue accounts
first.
 Keep a low or zero balance
on credit cards.
 Avoid applying for any new
credit if possible.
 Be cautious of companies
that claim they can raise your
score quickly for a fee.
“I’m not always certain
which bills to pay first.”
Take these important steps to begin
raising your credit score.

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Type of debt The amount I owe today Current interest rate
Credit card #1
Credit card #2
Department store credit card #1
Department store credit card #2
Specialty store credit card
School/student loan
Car loan #1
Car loan #2
Other
TOTAL
Step 1: Learn Where You Stand Today
Make a list of all your shorter-term debts. Keep in mind that your
mortgage is considered a long-term debt.

13. Step 2: Create a Realistic Budget

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Step 2: Create a Realistic Budget
Get organized – you can keep it simple.
 Track your daily expenses, being sure to
include the “small” ones.
 Review your expenses weekly for trends
and changes.
 Set short-term and long-term goals.
“I can’t afford to waste a single dollar
on high interest rates, so I need to keep
my credit score as high as possible.”

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Step 2: Create a Realistic Budget
A basic starting point for allocating your take-home income.
Housing
30%
Transportation
18%
Food
15%
Savings
10%
Debt payments
10%
Healthcare
7%
Other
5%
Household
expenses
5%

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Step 2: Create a Realistic Budget
Calculate how much to allocate
to debt payments each month.
Annual income
$60,000
10%
Debt payments =
$6,000 per year, or
$500 per month
“Sometimes it seems like it will take
forever to pay off all my debt. But if
I’m patient and stay on the right path,
I’ll have it behind me and be able to
move forward.”

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Step 2: Create a Realistic Budget
Calculate the number of months you’ll need to pay off your debt.
Monthly payment: $500
Current balance: $15,000
Interest
rate:
10%
Repayment Period:
2 years 11 months
Principal: $15,000
Interest: $ 2,333
Total: $17,333

18. Step 3: Talk with Your Lenders

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Step 3: Talk with Your Lenders
Ask lenders to consider lowering your interest rates
Monthly payment: $500
Current balance: $15,000
Interest
rate:
10%
Repayment Period: 2 years 11 months
Principal: $15,000
Interest: $ 2,333
Total: $17,333
Monthly payment: $500
Current balance: $15,000
Interest
rate:
8%
Repayment Period: 2 years 10 months
Principal: $15,000
Interest: $ 1,792
Total: $16,792
A 2% reduction in interest rate saves you $541

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Step 3: Talk with Your Lenders
Also consider refinancing your mortgage for significant savings
30-year fixed-rate
$150,000 mortgage
Interest
rate:
Your
monthly
payment: A 1.5% reduction
in interest rate saves you:
• $143 per month
• $1,716 per year
6.5% $948
5.0% $805

21. Step 4: Look at How You Spend and Save

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Step 4: Look at How You Spend and Save
Start with a few simple questions.
Can I take a vacation while still saving money?
Are there free activities in our local community?
Am I overpaying for subscriptions or services?

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Step 4: Look at How You Spend and Save
Implement small changes for big impact.
Ways to save Quick calculation
Potential
annual savings
Shorten your vacation
by a few days
Four nights in hotel x
$200/night
$800
Cancel select premium cable
channels
Two channels x $20/channel $480
Cancel subscriptions that you
don’t read or can read online
One newspaper x $15/month $180
Take advantage of free local
entertainment (e.g., parks,
museums, concerts)
Two concerts x $50/ticket $100
TOTAL $1,560

24. Step 5: Prioritize Your Debt Payments

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Step 5: Prioritize Your Debt Payments
Focus on paying for your most
valuable assets first.
 Mortgage
 Unsecured debt (e.g., credit cards,
medical bills and personal loans)
 Collateralized debt (e.g., auto
loans)
 Debt subject to wage garnishments
(e.g., student loans, IRS payments
or child support)

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Questions?
 Visit suntrust.com/shine or resourcecenter.suntrust.com helpful tips
and tools.
 Begin taking these manageable steps toward debt-free living.
Next Steps

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Thank You
We hope that today’s seminar provided valuable information to help
you feel more confident as you focus on investing.
Your financial well-being matters to us, and we’re here to help –
to listen and give you the information and solutions you need to face
the future and be ready for opportunity.
How can we help you shine today?

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This seminar is not intended to provide advice on your personal financial, tax, and/or legal situation.
Rather, it suggests approaches you might consider to help you lead a debt-free life.
SunTrust disclaims all warranties, express or implied, and does not guarantee the accuracy, fitness,
completeness, or suitability of the content of these materials. SunTrust encourages you to seek
financial, tax, and/or legal advice specific to your needs.
SunTrust Bank is an Equal Housing Lender. Member FDIC. ©2012 SunTrust Banks, Inc. is a federally
registered service mark of SunTrust Banks, Inc.
Important Disclosures