Can Debt Consolidation Help Me to Retire Earlier?
Debt consolidation is often sold as a method to help young people get their credit cards and student loan debts paid off. This isn’t just a technique for them, however. Debt consolidation is a financial tool that can help anyone who believes that their debt is holding them back from achieving their financial goals. This is particularly true in the case of people who are looking for a way to prepare for retirement.
How Debt Consolidation can Help
In order to retire successfully, a person has to have more income than their expenses. Most financial advisors focus on the income side of this equation; they want you to save a lot of money so that you’ll have plenty to live off of. The expenses side of the equation tends to get overlooked. Often, people assume that they have to plan on their expenses staying the same or going up.
The truth is that reducing your expenses is often easier than saving a large sum of money, and it’s a guaranteed way to know that you won’t need a lot in retirement. If you have a lot of debts, a debt consolidation loan can be a good way to make sure that you won’t have the added expense of your debt after you stop working.
A debt consolidation loan will pay off the debts that you currently have and replace them with one loan. In order to get the loan, you’ll have to work with a debt counselor. This is a financial professional who will review your budget and financial goals and work with you to find a loan that will help you to meet those goals.
Depending on your financial situation, you’ll be able to pick a loan that will give you a lower monthly payment or one that can get you out of debt faster. In some cases, there might even be a loan available that can do both. By spending less on debt every month, you’ll be able to take the money you save and devote it towards a retirement account. Getting out of debt faster means that you’ll be able to base your retirement budget on a set of expenses that doesn’t include debt payments.