Baby boomers are recently making the headlines for their financial difficulties. It was revealed that a lot of them are forced to let go of their dreams of early retirement because they have a lot of debt obligations. Despite their retirement money and Social Security, it will not be enough to pay for their credit payments – at least if they combine it on top of their basic needs and any medical expenses (if any).
As much as possible, you have to start working on your debt as soon as you make them. A debt left on its own can spiral out of control. You need to make sure that you have enough to pay off your debt before you get them.
Regardless of how you have gotten yourself into trouble, there is one thing clear, you have to do something about your debt. There are many debt relief programs that you can use to help you get out of your financial problems.
One of them is debt consolidation. The goal of this program is to allow the debtor to make lower monthly contributions to their creditors. This can be done through a longer yet structured payment period and possibly, a lower interest rate.
By making lower monthly payments, you will be able to set aside an amount for your retirement. While some people will advise you to use your 401(k), try not to get to that point. You will be endangering your retirement if you use this up for your debt payments. Make sure this remains intact and untouched by your debt problems.
The great thing about debt consolidation is that it will usually just take 5 years to complete. If you are still far from your intended retirement age, then you need to start this now before you completely let go of your career. While the lower monthly payment is guaranteed, you will not get a reduction on your debts. You will still pay off what you owe so a steady income is require. This is especially true if you opted for debt consolidation loans because proof of income is one of the requirements of a lender to approve of your loan.
If you think that you need further guidance in terms of financial management, debt management may be the best debt consolidation program for you. This involves a debt counselor who will not only help you pay your debts, they will also educate you about the basic financial management skills. They will teach you how you can live within your means and how to make the right spending choices to keep yourself out of debt.
You have to understand that you don’t really have to live a frugal life but if you want to, that will help you recover from your financial crisis faster and hopefully, pull yourself up before you retire. The key is to learn how to stay out of debt by living within your means. That is the secret to growing your wealth and your retirement fund. You don’t really have to file for bankruptcy. You just have to start making the right financial choices and make the decision to stick to your debt relief program.