A poll by CIBC points out that 67% of Canadians between the ages of 55-64 are still under debt. This would be a cause for concern for any person. Would you like to be part of that 67% when you are 64 years old? That is almost retirement age. The worst part about being in debt during retirement is that it eats into your precious savings. The best a person can do is become debt free even before they cross the retirement age.
So are you headed to a debt free retirement?
Assess your Spending Habits
Do you spend frugally or does money always slip through your hands for some expense or the other? An assessment of your spending habits will tell you if you are spending more money than you can afford or whether you are spending money on unnecessary items.
The best way to do this is to keep track of your expenses throughout the month.
If you find that you are indulging yourself in unnecessary expenses, or you are spending more than you can afford, you should immediately change your spending habits.
This way you will create more money for yourself and reduce your credit card usage.
Make a Plan
Create a debt plan for yourself. The plan should include:
– Targets: Have objectives which you want to achieve like paying off your xx debt by the end of the year.
– Minimum Payment: Stop sticking to the minimum payments. You need start paying more than that.
– Savings: Your plan should not utilize all the money you don’t spend. Keep saving your for retirement.
– Mortgage Loans: Chances are that your mortgage loan is the biggest debt you have to pay. Push to pay this first, so it becomes easier to pay the smaller ones.
Never touch your Pension Fund
It can be quite tempting to pull out money from your pension fund. Don’t do it. You may even tell yourself, “I’ll return the money next month”. Still don’t do it!
By extracting money from your pension fund, have no doubt, you are jeopardizing your future.
Work Hard
You should be willing to improve your income by rising up the career or working side jobs. More money in hand is the perfect way to help you get rid of the debt.
Keep a Watch on your Debt
A quick read of your credit report will inform you of all the debt you have to pay. Calculate,along with the interest rate, how long will it take for you to pay off the debt. Do this for each debt item like your student, home and car loan.
This will simply tell you if you will be debt free during your retirement.
Anyone who sticks to the above points will easily enjoy a debt free retirement. If you feel the number of debts are over-whelming and you won’t be able to have a debt free retirement, it is time to contact a professional debt consultant.
