Thursday , 2 April 2020

5 Strategies To Conquer Debt

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We hear about how the Baby Boomers are the wealthiest generation, yet we struggle to fund a retirement, so we end up working the rest of our lives in many cases. Compounding matters is the crushing debt that many Boomers face in what are supposed to be the stress-free years of retirement. With this reality in mind, what are some ways to attack the debt problem? @A Financial Site For Sore Eyes & Inquisitive Minds

Below are 5 strategies to conquer debt when you are 60:@Your Finances

1. Face the music – Come to terms [with the fact] that you have debt…desire to eliminate it or pay it down significantly and be willing to change the habits that created the debt in the first place.
2. Target high interest debt first – Look at the interest rates on the debts that you have and commit to tackling the highest interest debt first while keeping up with the minimum payments on the other debt as well. It can take years to pay off debt by just making the minimum payment. That is why it makes sense to target the highest interest debt first…
3. Look at refinancing options – If you have reasonably good credit you can find a lender that will consolidate your debt at a lower interest rate. That can mean a lower monthly payment and a shorter time frame to pay of your debt.
  • Do your homework to compare interest rates being charged.
  • If you are refinancing student debt keep in mind you will give up some of the perks for federal loans such as repayment plans based on income as well as debt forgiveness programs.
Consider this option as a great option to save money over time on interest costs. @Follow the munKNEE
4. Pay down your balance as soon as possible – You can do this by making more than the minimum monthly payment each month.
  • Call your credit card company or lender and ask them how you can apply extra payments to the principle [principal].
  • Check with your lender and see if your extra payments will go toward interest or principle [principal]. Some will apply your extra payment to interest which doesn’t help pay down the debt. You want to have that extra payment pay down the principle [principal].
  • Check that you are not being charged for making extra principle [principal] payments. You may be able to avoid the fees by tacking the extra payment onto your monthly payment.
5. Develop a budget – If your debt is due to a lack of a monthly budget then consider starting one. It takes discipline to live within your means. We live in a world of get it now and pay later. That doesn’t work and it wreaks havoc on family life and retirement…

Conclusion

Everyone has a reason for accumulating debt. Sometimes it is due to poor budgeting habits while others can’t avoid it due to employment or other family circumstances. Regardless of the reason it doesn’t have to wreck your retirement. Be intentional, have a plan and work your plan each month. Before you know it, you will have made a big dent in your debt and then it will be gone.

Once you are debt free you can enjoy your retirement savings and live your retirement on your terms.

Editor’s Note:  The above excerpts from the original article by Mark Hoaglin have been edited ([ ]) and abridged (…) for the sake of clarity and brevity

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