Why Debt Could Be Keeping You From Being Retirement Ready

0:05Welcome to the Wealthy After 40 podcast, the show for Gen X women and couples who are ready to ditch financial stress and feel confident about retirement. I'm your host, Dailene Higgins, money coach and retirement strategist to help you gain clarity and confidence with your money by creating a spending plan that aligns with your financial goals and dreams so you can spend intentionally, save consistently, and feel at peace about your future. Join me every week to understand your money, simplify your decisions, and take intentional steps toward the life you want.

0:49you're paying extra on your debt. You're trying to be responsible and you're making progress, but every once in a while you find yourself adding to that debt again. And every time you do, the pressure just gets a little heavier because you're not just thinking about the debt anymore. you're thinking about what does this mean for retirement? But here's what I want you to consider. The debt itself may not be the problem that's keeping you from being retirement ready. The bigger problem may be why you keep needing the debt in the first place. And that's what we're uncovering in this episode is to help you understand where is the debt coming from and how can I actually solve it?

1:39And this matters because you're 10, 15, or even 20 years from retirement and you don't have unlimited time to keep repeating this cycle. If you're consistently using your future income to pay for today's expenses, you're going to have to pull from savings or put unexpected expenses on a credit card. That affects more than your current cash flow. It can affect how much you're able to save, how quickly you can eliminate debt, and ultimately the choices that you could have when you get to retirement. But I don't want you to hear that and think, oh great, another reason I should feel bad about my money.

2:22Because that's not the point. We need to solve the problem underneath that cycle. Underneath needing that debt now before it becomes a bigger retirement problem later. So debt isn't necessarily the problem. And I want you to think about your situation right now. If you feel like this is you, I want you to think about your debt is information. When you realize you're adding to your debt occasionally, even though you're making extra payments, this is where I want you to stop. and get curious and start asking yourself some questions. Not just think, oh, I'm horrible with money. I'll never be good with money.

3:09I want you to stop and ask, what keeps causing me to need the debt? I want you to think through, are you overspending? Are you not prepared for those one-time expenses? Are you spending everything that comes in and leaving no margin, no savings? Are you using credit cards for emergencies that aren't really emergencies? Is your budget based on what you wished your spending looked like rather than what your life truly costs? And this is why in coaching clients, I start with phase one, your money reality. because before I can help you create a plan for the future and how to get there, we both need to understand what is actually happening with your money today.

4:07What is working? What isn't working? Because it's not a complete overhaul. And if things are working, we're going to leave them. But if you're ready to more clearly see where your money is going today, you're going to want to schedule a money clarity call, essentially a where's my money going session. On this call, I'll help you see exactly where your money is going, where it's getting stuck, and how that relates to you paving a clearer path to retirement. So talking about that debt cycle, that debt pattern, I pay it off, have to add some more, keep paying it, paying extra. There's three reasons that this pattern matters for retirement.

4:53Number one, debt competes with your future money. Every dollar that has to go toward cleaning up yesterday's spending is a dollar that can't be used for today's excitement and enjoyment or tomorrow's retirement savings. It puts it as a competing. You've heard that phrase, should I save or pay off debt? That's because debt is in a competing position. And so if you find yourself in this cycle, we've got to understand how we can solve it. And the bigger reason, number two reason, the pattern is not going to automatically disappear when you retire. So thinking, I'll just wait till I retire, it's going to still be there.

5:4699.9 % sure it's still going to be there. And here's something I want you to think about. If your current lifestyle requires you to occasionally use debt, your credit cards, to make the numbers work, simply retiring doesn't make that problem disappear. Your ability to solve it in retirement may become more difficult because you have that fixed retirement income. So don't let it pass on to retirement. Reason number three, this matters. You need to know how much you're really spending today before you can determine how much you will need in retirement. You can't create a realistic retirement income target, the estimated retirement number, if you don't understand what your life truly costs today.

6:49That's why getting control of your monthly cash flow understanding your expenses isn't separate from retirement planning. It is the big part of becoming retirement ready. So I want to share about my client, client K, we are going to call her. She felt overwhelmed by too much debt. She was paying it down. She said, it's going too slowly, and I find myself adding to it on occasion. So with this pressure, with this struggle, she was cutting back on things she enjoyed, the money that she truly could spend, and she had got rid of, they were no longer doing the weekend getaways with each other, with her spouse.

7:37She was missing those. And at first she thought the problem was simply that she had too much debt. But when we began phase one, your money reality, we discovered something different. She wasn't an irresponsible spender. And I knew that 99.9 % sure all of my clients having this problem, they're not irresponsible. She just didn't have a system set up for those expenses that she knew were going to happen. She knows about them. They're not every month. And so when they show up, it felt very unexpected. And because there wasn't money set aside for it, the credit card became the solution. She'd pay the card down, another expense would come up, and she'd be right back in the cycle.

8:32So after the clarity in the your money reality, the goal wasn't to pay off the debt faster. She was already doing an amazing job of that. It was addressing what was causing her to continue to use that credit card and continue to add to that balance, which would never get paid off. So I helped her build a system to keep her organized and have that money ready for when those expenses showed up. And now, while she still wants the debt gone, she is no longer living with that constant stress. She is actually brought back in the weekend getaways. She knows where she can spend her money because she has all of the other money set aside and money for retirement and the money to pay down debt.

9:20And it's all working together because of the system. And this is why I want you to think differently about debt as you look toward retirement. The goal isn't simply to wake up one day and have a zero balance, although it's nice. The goal is to create a money system that allows you to live your life without borrowing from your future. That actually has you living, quote, within your means, which I know a lot of people don't like. That is how you're going to avoid a debt. And this is what retirement readiness really requires. that you need to know what your life costs. You need to have a plan for the expenses that are coming up and you need to be able to direct your money intentionally.

10:09You've heard me talk about enjoy now and plan for later. That is what you need to do intentionally so that you're enjoying both ends of your money system, of your money goal. And the sooner you build those habits and systems, the more options you're going to give yourself later. And we love options. Now you might be listening and thinking, okay, but maybe I really am an overspender. And I'll say, yes, that's something worth looking at. So if that is you, listen to episode 182 with my guest, Marianne Stenquist. We talked about how to know if you're an overspender. I'll link that episode in the show notes so you can find it easy.

10:53And after you listen to it, if overspending doesn't sound like your situation, and maybe that's you right now, you're like, no, I'm not an overspender, then I want you to look at something else. The one-time expenses that you typically call surprise expenses, or that's how you react when they show up. You're like, oh, man, I forgot that was showing up. Oh yes, that always comes up to, oh gosh, that it's been three months. I've got to pay for that. How often are these types of things coming up that aren't really emergencies, but you haven't planned for them financially? The good news is that this is fixable and it's what I help all of my clients with.

11:37It just needs a specific plan, not more discipline, not more cutting back on things you enjoy so you have more money. And like I said, this is what I help my clients set up so these expenses stop sneaking up and start being planned for ahead of time. If you're paying down debt but still adding to it, don't just focus on the debt. Find out what's causing you to need it in the first place. And as you've listened to this episode and you're thinking, okay, I know I'm trying to pay down my debt, but I still don't understand why I keep ending up back here. Why this pattern keeps repeating. It keeps happening no matter how responsible you are.

12:27If you need help determining what is adding to your debt, just like my client, you're going to want to grab a money clarity call. This is a where's my money going session where we'll dive into where's your money going, where's it getting stuck, and what's keeping you from making the progress you want. Getting a clearer picture of where your money is going will help you regain control of every dollar, stop adding to your debt, and have more money to pay down debt faster. So if you're ready for that clarity, head over to elevatefinances.us backslash call, C-A-L-L, or you can find the link in the show notes below.

13:11You don't have to wait until retirement is right around the corner to get your money working differently. It's time to start figuring out what's happening with it today. Don't let these problems delay your progress to retirement. There's easy solutions for any problem you are facing. Even if you're not in the debt camp, I would love for you to come book a call. Let's figure out what is your biggest challenge, what is your problem, and how can you solve it now? That's where you can start getting ready for retirement much sooner, much quicker, and avoid any of those problems in retirement when you get there.

13:54So you can enjoy the money you have, enjoy the life you deserve to live, and enjoy the freedom that you now have away from that 9 to 5. Thank you for listening today, and I'll see you next week.

14:09Thank you for spending this time with me. If you're not already following the show, be sure to hit subscribe so you don't miss what's coming next. And I'd love to stay connected with you between episodes. So come join me inside my Facebook community, Retirement Ready Hub for Gen Xers. It's where we're having real conversations about money, sharing wins, working through challenges, and building a clear path toward retirement. And remember, retirement isn't just a dream it's a plan and you get to make it possible