Ep 104 | 5 Ways to Pay Off Debt Before Retirement
episode
Wealthy After 40: Retirement Planning and Budgeting for Gen X
17 min
2 speakers
8 chapters
transcribed 1 month ago
Transcript
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Transcript generated automatically by AI and may contain errors.
How will carrying debt affect your retirement plans?
You're concerned about debt and how that will impact retirement. Today's episode will help you create a plan to get that debt paid down, paid off and get yourself ready for retirement. Listen in as I share five strategies and guide you through how to create your own plan to be successful. Welcome to Wealthy After 40, where I help you turn retirement uncertainty into a clear, actionable plan. If you're thinking about retirement but feel unsure whether it's even possible, I understand. The gap between where you are now and where you want to be can feel overwhelming, but it doesn't have to. Hi, I'm Dailene Higgins, founder of Elevate Finances and your personal financial coach. Having retired at the age of 50 and have enjoyed over two years of retirement bliss, I'm here to help you create your retirement dream and make it a reality.
No more wondering, no more guessing, just taking action and building a future for yourself. Join me each week as I guide you through essential topics such as budgeting, cash flow, lifestyle planning, debt and savings, insurance, Medicare, and social security. Together, we'll build a strategy to help you achieve the retirement you've always desired.
What initial steps should you take to understand and stop creating more debt?
It's time to shift from uncertain to unstoppable and make your retirement dreams a reality. Welcome to today's episode about strategies for getting out of debt. And then we're also going to talk about which one to choose and why. Before we get into that, the first thing we need to do is understand debt. And for today's episode, not necessarily just debt in general, but your debt. The first step to being able to get rid of debt is to stop creating debt. Think about that for a minute. If you don't have any strategies in place for stopping this debt creation, and we'll talk about it in a minute, but you go to the use of debt for a lot of different situations. And unless you have an alternative for that, then you're not going to be able to get out of debt.
We need to stop creating debt to be able to get out of debt. I want you to think about the debt you have right now. And I want you to think about what created your debt. And what I mean by that was what caused you to use that credit card or go get that personal loan or whatever the item may be. It may even be a car, a car. HELOC, any of those things. What was the driver of that debt? Meaning what reason did you have for using that?
How do you calculate your total debt number and break it down by account?
Thinking about those things, if we are using them in a time of emergency, if you go back and listen to my episode about emergency funds, you'll understand a little bit more about how we need to create that. I believe having an emergency fund will help stop debt. When I say that in that episode, it is specifically for those expenses where we know they're going to happen at one point in time in the future. Being able to have that money, that pool of funds to pay for it is very important as opposed to using a credit card or a HELOC or any of those things. We can be prepared. The next thing in understanding your debt is do you know your debt number? And what I mean by that is, do you know how much debt you owe?
Do you know what that total is as a full sum? And when I say a full sum, I'm talking about mortgage, credit card, personal loans, secured loans, everything into one large number. The next thing you need to do is to break that number down. And especially if we're going to look at creating a strategy for getting out of debt, we need to know those specifics of each and every debt. We need to know what the balance is, what the payment amount is, what the interest rate is. How long is it going to take us to pay that off at the amount listed? Did you know that credit cards are required to disclose that to If you have not seen that on your credit card, I want you to go look for it.
What should you review about past attempts to pay down debt before choosing a strategy?
It will tell you if you pay the minimum payment at this interest rate, how many years it will take you to pay it off. It's going to be close to what it's going to take to pay off your homes. Educate yourself on your debt. Make yourself aware of all of the terms, all of the situation, all of the circumstances.
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Chapters
8 chapters
1
How will carrying debt affect your retirement plans?
0:00–1:31
2
What initial steps should you take to understand and stop creating more debt?
1:31–3:06
3
How do you calculate your total debt number and break it down by account?
3:06–4:51
4
What should you review about past attempts to pay down debt before choosing a strategy?
4:51–6:30
5
How does the debt snowball method work and who benefits most from it?
6:30–8:28
6
How does the debt avalanche method differ and when is it the best choice?
8:28–10:04
7
What are alternative payoff methods (Kiyosaki, emotional priority, custom) and when should you use them?
10:04–13:22
8
How do you choose a priority, document your why, and stay motivated until retirement?
13:22–17:09
Speakers
2 identifiedMore from Wealthy After 40: Retirement Planning and Budgeting for Gen X
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Why Do You Fear Retirement? The Answer Might Surprise You