As officials in Congress still continue to battle over our national debt, many consumers are turning to look at their own lives when it comes to paying down debts as there are a great deal of hindrances that can come from a high amount of debt or problems related to meeting the minimum monthly payments on certain debt obligations. Credit card debt, which is quite common, usually carries interest rates they can be highly problematic for consumers, particularly when only minimum payments are being met, but even meeting these small monthly obligations can be difficult for some consumers who have let their debt get out of control.
Yet, it will hard to find a financial counselor who would argue against the idea that paying off debt quickly should be a high priority for consumers, particularly for those who may be close to retirement or who are at the point in their career where retirement planning should be more heavily focused on, in terms of their contributions to retirement plans like 401(k)s or IRAs. Obviously, there are consumers who contribute to these plans and also carry debt, but whenever a man or woman happens to have a great deal of personal debt, this can not only weigh down their personal financial life or the finances of their family, they can also hinder their retirement savings as consumers may find that they cannot set as much a side each month to contribute into a retirement plan or there are problems that arise later as well.
If a consumer enters into retirement or nears the age of retirement and still carries a substantial amount debt, they may find that income from these retirement savings accounts could also continue to be used to pay down various debt obligations and this can cut into their personal expenses and may lower the total amount may have to use after they have retired. While there are plans to prepare for retirement in a variety of ways, there are also concerns like health care costs that are on the rise which could cause more financial strain in the life of a consumer who has a high amount of debt that has followed them for years.
There are simple budgeting techniques that can be applied to almost any consumer’s financial situation which will allow them to not only save more money so they can begin paying down what they owe, but there are some arguments by financial advisers who say that paying off debt should be the first priority an individual has even if it means not contributing to a retirement plan at the present time. There are also credit counseling agencies that can help consumers get their finances in order, but these resources should be used before financial difficulties snowball into a greater problem and consumers must take more extreme measures to pay off what they owe. While having some debt is not always bad, consumers who have found themselves in a position where they are living paycheck to paycheck, may have maxed out most of or all lines of credit they have access to, or who find that missed payments arise every now and again are those who may benefit from either personal budgeting habits that will lead to debt relief or outside assistance from nonprofit credit counseling agencies who can also help consumers get control over their debt.