Happy New Year!
I trust everyone had a wonderful holiday season. Whether you reached your personal goals last year or faced challenges, a new year brings new opportunities and a fresh start.
More and more, people are using their credit cards to pay for trips and holidays. There’s nothing inherently wrong with this. Everyone deserves to have a wonderful Christmas or go on vacation, and you shouldn’t have to wait until retirement to do it. And using cash-back and rewards options that come with many credit cards can be a savvy way to enjoy some benefits.
But it’s also true that credit card debt can rack up very quickly.
Even worse, the interest rates you pay on your debt can often be higher than the return you get on your investments. In other words, your debt could be growing at a faster pace than your savings.
In my experience, this kind of debt is one of the biggest barriers to retiring when you want and how you want. It often delays or eats into your ability to set aside money for retirement. For some people, it gets so out of hand that they will even use their 401(k) to pay off their credit cards! That shouldn’t be.
If you are dreading that next credit card bill after the holidays because you used credit cards to help pay for it, my advice is to pay off those charges as quickly as possible. Make it your first priority. That way, you can remove that weight before it becomes a millstone and get back to preparing for your retirement.
This may not affect many of you. But more likely to affect your grown children. Or grandchildren. Think how you might be able to help them learn not to be burdened with millstones.
If you have any questions or would like to discuss any matters, please feel free to give me or any of my team members a call.
