Member Spotlight: Michael Utilized Tally to Take Down Debt and Build Up An Emergency Fund
“The best thing about Tally for me is it paid off my debt while charging me a lower interest rate.”
December 27, 2021
Could you pay off an unexpected expense totaling more than $1,000? Less than four in ten Americans have $1,000 saved to cover emergency expenses from a car repair to a medical bill. Most Americans would borrow the money, whether from friends, family, a personal loan or take on credit card debt.
When COVID kept Michael M. from working, his family accumulated credit card debt to cover daily expenses. “I was diagnosed with cancer three years ago, and when COVID hit, my Oncologist said it was imperative that I stay home,” explains Michael. “With no money coming in, we ran up our current debt.”
Michael felt overwhelmed with debt and its accumulating interest until he found Tally†.
The importance of an emergency fund
Michael has been many things in life, from an Education Director and Campus Life Director to a professional musician, and a business owner. Before COVID, he spent the last 16 years working as a baseball hitting and pitching trainer.
The one thing he never expected to be was in debt. Unfortunately, the unexpected can and will happen. That’s why building an emergency fund is an important part of financial health.
For example, if you’re out of work for two months and cover $8,000 in expenses with a credit card. If the card charges a 19% interest rate and requires only a 4% minimum payment ($320 a month), it’d take 157 months to pay off the debt, resulting in an additional $5,101.78 interest.
An emergency may only be a moment, but you could end up paying for it for years on end. That’s why an emergency fund can be an essential tool.
A simple way to start building an emergency fund is setting aside 20% of your monthly income until you save between three to six months of expenses. If 20% is too intimidating, start smaller. The most important thing is to start putting away whatever you can.
Saving and paying down debt faster, with Tally
Using Tally to pay down his credit card debt has given Michael a sense of relief. “The best thing about Tally for me is it paid off my debt while charging me a lower interest rate,” says Michael. With Tally’s lower-interest line of credit, Michael could consolidate his credit card debt all in one place, saving on interest.
On top of saving money, the credit card debt doesn’t seem as scary when Tally’s there to help, “it makes it easy for me to visualize my situation with their outstanding app,” Michael says. Tally puts your debt all in one place, making it easier to track and pay it down.
Goodbye debt, hello savings
With the help of Tally, Michael’s been able to pay down debt faster and even start saving. “Currently, I'm setting money aside ($2,500 per month) for my daughter’s wedding while paying what I can towards my debt,” Michael says.
Now that his savings have grown, he’s advising anyone to build an emergency fund to avoid credit card debt: “Don’t use a [credit card] unless you have to.”
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.