Tips For Retiring Debt Free
After the financial crisis, many older Americans saw their nest eggs slashed as the stock market tumbled, potentially leading some to be forced to delay their retirement.
For all consumers, one of the most important financial steps to avoid further push backs to their retirement date is to eliminate mortgage, auto and credit card debt as well as any other loans. The following tips can help any Americans accomplish this feat.
No. 1 – Take stock of all debts
To be able to pay down any balances, consumers first need to determine every type of debt they have. Everything from a mortgage to a personal line of credit should be recorded on a piece of paper or spreadsheet. This step can help consumers determine just how much each debt is costing them to figure out which ones to attack first.
No. 2 – Pay down high interest debts first
Consumers who have $100,000 remaining on their mortgage and $15,000 on their credit cards may believe increasing the repayment of their home loan is the best option, but that isn’t always the case. Despite the fact that their credit balance is much lower, chances are the interest rate is significantly higher, which means it is costing them more money each month it isn’t paid off. That being said, it would be wise to pay down the debts that are costing the most in interest.
No. 3 – Sit down with a credit counselor
Americans who have a significant amount of debt might want to consider visiting with an expert who can help them develop a more specific plan, especially if they are struggling to come up with the funds to meet monthly payments. A credit counselor will likely be able to assist in the forming a strategy that allows consumers to best pay down their debts, however, it is important to hire a professional who has plenty of experience and good reviews.
No. 4 – Attempt to lower interest rates
The biggest burden created by debt is the fact that it accrues interest. For this reason, it may be a good idea to contact lenders to see if they are willing to reduce the interest rates on accounts to make them easier to pay. Creditors aren’t always open to the idea, but there is no harm in asking.