Debt Refinancing: The Key To Your Financial FutureDebt Refinancing: The Key To Your Financial Future

When it comes to getting expert and custom financial planning advice to secure your family's future, nothing is more important than restructuring debt.

Debt doesn't necessarily refer to families in such dire straits that they are one step away from bankruptcy. We're mostly talking about families with one or two wage-earners who own their own homes but struggle to make all their monthly payments.

These families are typically good people. They work hard and want the best for their children. But they often lack education in financial fundamentals. They never really developed a savings plan. They don't have much insurance to protect their assets. And to top it all off, they have adopted a "consume now, pay later" attitude -- without really understanding the staggering cost of paying later.

So these families struggle along, keeping their heads above water -- but just barely. Like 60% of Canadians, and an even higher percentage of Americans, they live paycheck to paycheck. They have alarming levels of debt.

According to a recent retirement confidence survey:

* 27% surveyed have less than $1000 saved
* 50% have less than $25,000 saved
* 43% are worried on ability to retire

It's not a pretty picture. But help is possible. And it's never too late to get started. The key is a comprehensive financial plan that looks at the big picture. Debt Restructuring is often the crucial first step. In certain circumstances, refinancing your mortgage can free up $500 or $1,000 a month. These funds can be used to pay down debt and invest in retirement and insurance products.

In a recent survey by a major bank, the number one goal [73%] was to save for retirement. Paying off credit cards was a close second at 72%

But saving for vacations or purchases was the goal of a hefty 53% of those surveyed.

Talk about irony! And the irony doesn't end there. Right next to an article describing the survey an was an ad for a lottery with a $10 million prize.

Let's face it, though. Most of us aren't going to win the lottery. A vague hope that something good might happen at some unspecified point in the future is not a plan.

But I think these statistics serve to highlight several important issues.

Firstly, if saving is problematic then saving for retirement may not be so much a goal as a wish.

Secondly, certainly the goal of wanting to pay off credit cards fails to address the issue of 'having to' pay them off in order to achieve Goal #1.

Lastly, and most illuminating, is the goal to save for purchases and or vacations.

This goal of having to save for purchases rather than have funds available points out a form of "runaway consumerism" that prevents achievement of the realistic financial goals that matter.

The lack of retirement savings and an increasing credit card debt load are indications and the result of lack of awareness. This lack of awareness leads to lack of planning.

If you do not know that you are heading in the wrong direction, there is no need to look at a map.

Be aware of your retirement needs. Plan accordingly. Curb incidental spending. Plan vacations within your means. Reduce debt loads.

The result? Achieving goals, rather than making a wish list that remains just that: a wish list.
by Daniel Freedman
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Daniel Freedman blogs on personal finance at
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