Hey everyone, welcome back. We're on the home
stretch to retirement. You've done the hard work
of saving and planning, but this step can make
a huge difference in your financial freedom.
Aggressively tackling debt and slashing unnecessary
expenses is vital. So the last year before retirement
is the golden window. everything you pay down
or cut down now is less stress and more money
in your pocket for your new life of retirement.
So let's get right into it. Before you retire,
the goal is to enter this new chapter with as
little debt as possible. Think of every pound
you pay towards a loan as a pound you won't have
to worry about from your fixed retirement income.
Here's how we can make this final push. So step
one is to really work on high interest debt.
Now your first target really should always be
any debt that has high interest, just a credit
card or workday loans, them kind of things. And
these are financial black holes that eat away
at your savings. So there's two popular strategies
one's called the debt avalanche so this is where
you pay down the debt with the highest interest
first regardless of the balance and this saves
you the most money over time but others prefer
the debt snowball. This is where you pay down
the smallest debt first and this gives you a
psychological win of eliminating debt quickly
and it gives you the momentum to tackle the bigger
ones. But once you've chosen one of them, you
need to move to step two, which is to either
consolidate or refinance. So if you have multiple
high interest debts, look possibly into a personal
loan or a balance transfer credit card. This
can simplify your payments into one manageable
bill and often at a lower interest rate. And
that will free up cash flow. So step three then
is to automate and then celebrate. I mean, set
up automatic payments for all your debts to ensure
that you never miss a payment and incur late
fees. As you pay off each debt, don't just move
on. Take a moment to celebrate the victory. It
will just give you that psychological lift to
keep going. So part two of what I talk about
now is the financial expenses audit. Now, let's
talk about expenses. Retirement will change your
daily costs, but you can get a head start just
by auditing your spending now. So step one is
the three month review. Go back over your bank
account statements and credit card bills for
the last three months. Don't just glance at them,
categorise every single purchase. You'll likely
be surprised where your money is going. And then
step two is the subscription purge. It's the
bane of our lives in modern society. And this
is one of the easiest ways to save big. I mean,
are you paying for a gym membership that you
don't use? Maybe you've got two different streaming
services when you only actually watch one of
them. Now be ruthless. Cut anything that isn't
essential. It doesn't bring you joy. Now step
three. about lifestyle tweaks. No big overhauls
here. You don't need to live like a hermit. Focus
on the small, sustainable changes. And then we've
got meal planning. So cook at home more and reduce
how often you dine out. And then the good old
one, comparison shopping. Use apps and websites
to find better deals on insurance, your mobile
phone plan or groceries. Reduce driving where
you can. Car maintenance and petrol bills are
a big cost and you can actually bike or walk
for most local errands in most places. But the
conclusion here is that we're looking to get
some peace of mind back. By taking these steps,
tackling your debts and trimming your expenses
you're not just saving money you're buying that
peace of mind as well and that means you'll enter
retirement with fewer financial obligations and
much simpler life really and a clearer picture
of your new budget. So this final sprint is a
powerful way to make your transition from that
work life to retirement life as smooth and stress
free. as possible. So quickly think now what's
the first expense that you're going to cut? Hope
that was all useful and I'll see you in the next
section of the course. Don't forget to take the
quiz.