WEBVTT 00:00:00.430 --> 00:00:02.890 Hey everyone, welcome back. We're on the home 00:00:02.890 --> 00:00:06.110 stretch to retirement. You've done the hard work 00:00:06.110 --> 00:00:09.429 of saving and planning, but this step can make 00:00:09.429 --> 00:00:12.330 a huge difference in your financial freedom. 00:00:13.990 --> 00:00:18.469 Aggressively tackling debt and slashing unnecessary 00:00:18.469 --> 00:00:23.570 expenses is vital. So the last year before retirement 00:00:23.570 --> 00:00:28.640 is the golden window. everything you pay down 00:00:28.640 --> 00:00:32.539 or cut down now is less stress and more money 00:00:32.539 --> 00:00:35.240 in your pocket for your new life of retirement. 00:00:35.979 --> 00:00:40.460 So let's get right into it. Before you retire, 00:00:40.600 --> 00:00:43.880 the goal is to enter this new chapter with as 00:00:43.880 --> 00:00:47.259 little debt as possible. Think of every pound 00:00:47.259 --> 00:00:50.579 you pay towards a loan as a pound you won't have 00:00:50.579 --> 00:00:53.700 to worry about from your fixed retirement income. 00:00:54.769 --> 00:00:59.570 Here's how we can make this final push. So step 00:00:59.570 --> 00:01:04.469 one is to really work on high interest debt. 00:01:05.510 --> 00:01:08.750 Now your first target really should always be 00:01:08.750 --> 00:01:12.290 any debt that has high interest, just a credit 00:01:12.290 --> 00:01:16.030 card or workday loans, them kind of things. And 00:01:16.030 --> 00:01:19.870 these are financial black holes that eat away 00:01:19.870 --> 00:01:23.340 at your savings. So there's two popular strategies 00:01:23.340 --> 00:01:26.980 one's called the debt avalanche so this is where 00:01:26.980 --> 00:01:29.319 you pay down the debt with the highest interest 00:01:29.319 --> 00:01:32.599 first regardless of the balance and this saves 00:01:32.599 --> 00:01:35.879 you the most money over time but others prefer 00:01:35.879 --> 00:01:39.859 the debt snowball. This is where you pay down 00:01:39.859 --> 00:01:43.060 the smallest debt first and this gives you a 00:01:43.060 --> 00:01:46.640 psychological win of eliminating debt quickly 00:01:46.640 --> 00:01:49.280 and it gives you the momentum to tackle the bigger 00:01:49.280 --> 00:01:52.659 ones. But once you've chosen one of them, you 00:01:52.659 --> 00:01:55.819 need to move to step two, which is to either 00:01:55.819 --> 00:02:00.099 consolidate or refinance. So if you have multiple 00:02:00.099 --> 00:02:04.140 high interest debts, look possibly into a personal 00:02:04.140 --> 00:02:07.780 loan or a balance transfer credit card. This 00:02:07.780 --> 00:02:11.360 can simplify your payments into one manageable 00:02:11.360 --> 00:02:15.379 bill and often at a lower interest rate. And 00:02:15.379 --> 00:02:19.229 that will free up cash flow. So step three then 00:02:19.229 --> 00:02:22.389 is to automate and then celebrate. I mean, set 00:02:22.389 --> 00:02:26.349 up automatic payments for all your debts to ensure 00:02:26.349 --> 00:02:29.069 that you never miss a payment and incur late 00:02:29.069 --> 00:02:33.629 fees. As you pay off each debt, don't just move 00:02:33.629 --> 00:02:37.469 on. Take a moment to celebrate the victory. It 00:02:37.469 --> 00:02:39.949 will just give you that psychological lift to 00:02:39.949 --> 00:02:43.469 keep going. So part two of what I talk about 00:02:43.469 --> 00:02:51.219 now is the financial expenses audit. Now, let's 00:02:51.219 --> 00:02:54.939 talk about expenses. Retirement will change your 00:02:54.939 --> 00:02:58.180 daily costs, but you can get a head start just 00:02:58.180 --> 00:03:04.300 by auditing your spending now. So step one is 00:03:04.300 --> 00:03:07.139 the three month review. Go back over your bank 00:03:07.139 --> 00:03:09.280 account statements and credit card bills for 00:03:09.280 --> 00:03:12.020 the last three months. Don't just glance at them, 00:03:12.460 --> 00:03:16.000 categorise every single purchase. You'll likely 00:03:16.000 --> 00:03:19.789 be surprised where your money is going. And then 00:03:19.789 --> 00:03:23.509 step two is the subscription purge. It's the 00:03:23.509 --> 00:03:26.490 bane of our lives in modern society. And this 00:03:26.490 --> 00:03:30.569 is one of the easiest ways to save big. I mean, 00:03:30.610 --> 00:03:32.590 are you paying for a gym membership that you 00:03:32.590 --> 00:03:36.009 don't use? Maybe you've got two different streaming 00:03:36.009 --> 00:03:38.969 services when you only actually watch one of 00:03:38.969 --> 00:03:43.310 them. Now be ruthless. Cut anything that isn't 00:03:43.310 --> 00:03:46.870 essential. It doesn't bring you joy. Now step 00:03:46.870 --> 00:03:51.020 three. about lifestyle tweaks. No big overhauls 00:03:51.020 --> 00:03:55.060 here. You don't need to live like a hermit. Focus 00:03:55.060 --> 00:03:59.659 on the small, sustainable changes. And then we've 00:03:59.659 --> 00:04:04.099 got meal planning. So cook at home more and reduce 00:04:04.099 --> 00:04:08.129 how often you dine out. And then the good old 00:04:08.129 --> 00:04:10.689 one, comparison shopping. Use apps and websites 00:04:10.689 --> 00:04:14.990 to find better deals on insurance, your mobile 00:04:14.990 --> 00:04:19.629 phone plan or groceries. Reduce driving where 00:04:19.629 --> 00:04:22.769 you can. Car maintenance and petrol bills are 00:04:22.769 --> 00:04:26.470 a big cost and you can actually bike or walk 00:04:26.470 --> 00:04:30.269 for most local errands in most places. But the 00:04:30.269 --> 00:04:32.250 conclusion here is that we're looking to get 00:04:32.250 --> 00:04:36.029 some peace of mind back. By taking these steps, 00:04:36.480 --> 00:04:39.800 tackling your debts and trimming your expenses 00:04:39.800 --> 00:04:43.699 you're not just saving money you're buying that 00:04:43.699 --> 00:04:46.519 peace of mind as well and that means you'll enter 00:04:46.519 --> 00:04:50.500 retirement with fewer financial obligations and 00:04:50.500 --> 00:04:53.279 much simpler life really and a clearer picture 00:04:53.279 --> 00:04:58.019 of your new budget. So this final sprint is a 00:04:58.019 --> 00:05:01.500 powerful way to make your transition from that 00:05:01.500 --> 00:05:05.079 work life to retirement life as smooth and stress 00:05:05.079 --> 00:05:09.529 free. as possible. So quickly think now what's 00:05:09.529 --> 00:05:17.009 the first expense that you're going to cut? Hope 00:05:17.009 --> 00:05:19.569 that was all useful and I'll see you in the next 00:05:19.569 --> 00:05:22.089 section of the course. Don't forget to take the 00:05:22.089 --> 00:05:22.250 quiz.