The Finance Blogger

Pay Down Your Debts – Financial Freedom

Pay Down Your Debts - Financial FreedomWe just read an article that fully 33% of Canadians nearing or in retirement still have loans and mortgage debt that they are paying monthly payments on. For some this is quite serious. Since they are still paying a mortgage and have limited income remaining to live on. Pay Down Your Debts Now! These folks are also on a fixed income from pensions and government income. They cannot afford to pay down the debt all at once.

For a limited few consumers, it is merely a manner or re balancing their portfolios to eliminate the debt and live debt free while they are in their retirement. If you are in your 40’s now is the time to focus on paying off all of your debt so that when it comes time to retire, your income is free to spend on whatever you wish! Imagine the freedom.

This same survey indicated that more than 50% identify it as an important issue to save, to pay down the debt they have and to have a plan to pay down their debt. This is the baby boomer group which is retiring or about to retire. Many are not prepared and are not good at meeting their plans if they have them. This survey caught our attention since it really brought home the fact that people in this age group may have to adjust to a lower level of living than what they are used to when they retire.

This may be a tough adjustment for people who are used to working, having a good pay check and then faced with living on a fixed income at a lower level than they are used to. They can easily build up their debt levels even further by not adjusting their living standards and reducing their expenditures.

Plan for your Retirement Now to Gain Some Kind of Financial Freedom

Most do not have plans and have no idea what they are in for when they retire. Here are a couple of steps that you can follow that will begin to help you get ready for retirement and also organize your finances:

  • List all of your monthly expenses
  • List your income
  • Identify income that will grow as time goes on
  • Identify your debt, the monthly payments and the maturity date
  • Review your income after retirement
  • Identify any income gaps
  • Prepare a budget
  • Develop a plan to reduce expenses if needed to balance your income vs. expenses
  • Meet with a financial adviser for help to assess your retirement situation
  • You will need a list of all of your assets and debts now, and at retirement
  • You may want to meet with several financial advisers and compare recommendations
  • Develop your own plan based on all of this data and recommendations.
  • Adjust your savings plan and your debt plan to meet your goals for retirement

Pay down Debt

If even one person reads this post and takes some action about paying down their debts, then we will feel it has been worth it to have written this post. Even if we find that people are thinking about saving and paying down debt, we will have made some headway. The best advice we can give to young people is to save 10% of their income towards retirement starting from the time they begin work until they retire.

Unfortunately for us, we fall into the group that still has debt but we do have a plan to get out of debt and be debt free by a specific age. Whether we get there or not is going to depend on the markets, the housing prices and how long we continue working. We would really like to be debt free, but we are not quite there yet.

If you have similar issues or have points you think our readers would appreciate, please leave us a comment.

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One Response to “Pay Down Your Debts – Financial Freedom”

  1. Best advice I ever got was to pay down my debts, now I have an excellent credit rating

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