Written By: Edgar Ortiz

During our lives, we encounter different cycles of debt depending on our current situation. Most people don’t think of retirement and debt until it is too late. The goal of entering retirement is to go with as little debt as possible. Below are 3 simple steps to help you reach your goal of reducing your debt before retirement.

Step 1: Assess your debt

The first step in getting out of debt before retirement is figuring out how much debt you currently have. To do this, you must write down all the expenses generated on a monthly basis. Also remember to include the forgotten debt gasoline, groceries and utilities leave behind. Once you have determined who, what, and how much you owe, you can see what expenses you can try to eliminate. 

Step 2: Make a budget

The next step in deciding how to get out of debt is creating a financial budget. By creating a financial budget, you’ll be able to see how much income you are generating versus your expenses.

This process is usually the hardest as you finally see what income and expenses you generate monthly. Many of us may forget the small additional expenses such as Netflix or Spotify, and overspend on these necessities that aren’t realized until you begin the budgeting process.

Step 3: Plan to eliminate debt

Now that you have written down your income and expenses, it’s time to pay off the debt. Eliminating all unnecessary debts that are needs versus wants will be a challenge. But with those small changes, it can add up to a large sum of money monthly. If you’re a coffee lover, one of those unnecessary debts is purchasing a coffee from Starbucks every day. Let’s face it, coffee may be a necessity, but Starbucks is a wish.

Eliminating debt is not always easy but using this simple 3-step model can begin to put you on a path of eliminating debt before you go into retirement. For more tips on debt saving solutions, make an appointment today at tcgservices.com/eortiz.