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Emergency debt

If you want to embrace Radical Retirement Planning and save 50% or more of your after tax income you cannot afford to have any payments on debt other than your mortgage. This includes student loans, credit cards and car loans – they all need to go.

Remember, debt has a double whammy. You are paying interest rather than savings money and making earning interest.

Traditional financial planning suggests creating a budget and “working-on” getting rid of the debt over a manageable and comfortable timeframe.

Radical financial planning approaches debt slightly differently. We don’t have years to clear this, we only have months. If you are serious in being financially free in 10-15 years you need to clear this debt as an emergency. Like you had to save what you owe in debt to pay for a life-saving operation.

So, stop all non-essential spending and change your lifestyle. This basically means spending nothing apart from food and transport to and from work.

Here are some specific suggestions on what you can cut out and use to clear your debt:

  • Meals out
  • Take-aways
  • Going out for drinks
  • Cinema
  • DVDs
  • Costa coffee
  • Buying lunch at work
  • Sky
  • Gym membership
  • New clothes


You can also change your lifestyle:

  • Change your car (or go car free)
  • Walk whenever possible
  • Become a vegetarian for a while
  • Take an extra job
  • Take a lodger
  • Rent your garage or loft space for storage
  • Rent out your drive/parking space
  • Sell jewellery and toys like an expensive bike and jet-ski


There will be time for some of these things to return later as part of a plan. But, for now you need to be 100% focussed on clearing credit cards and non-mortgage debt.

It should only be a matter of months and all credit cards and non-mortgage loans will be gone forever.