According to a USA Today article about debt, 78% of Baby Boomers have mortgage debt, 59% have credit card debt, and 56% have car payments. It takes a lot of will, discipline, courage and help to slay the debt monster. But it can be done.The game isn't over yet. Yes, you might be older. So what?
Your older years can be one of the most rewarding life stages, provided that they are not filled with debt. If you have properly prepared your finances, you may find that you have time and money to travel, spend time with family and enjoy your hobbies. But if debt is an issue, you may find that your retirement years are not as comfortable as you would have liked. Here are some tips for dealing with debt as an older adult so you can enjoy a comfortable retirement.
Budget your money wisely.
During your older years, you may find that you have more expensive and unexpected medical expenses than when you were younger. Because of the challenge of fitting medical expenses into a fixed income budget, you may feel that charging your purchases is the only way to afford everything you need. This, however, is a dangerous move for your finances. It may be difficult to come to terms with, but racking up credit card debt leaves an unfortunate legacy for your children when you pass away. Budget your money so you can use your savings if you need to cover unexpected expenses rather than going into credit card debt.
Use your home to your advantage.
If you have a great deal of home equity or if you have completely paid off your mortgage, but are having a hard time making ends meet while you are retired, you may be a good candidate for a reverse mortgage. Instead of making payments to a lender, a lender makes monthly payments to you until your home is sold or you pass away. There are age restrictions and other requirements you must meet in order to be eligible for a reverse mortgage, but it can increase your income and help you afford your retirement years. If you have any questions about whether a reverse mortgage is right for you, talk to a professional in financial advising. He or she should be able to give you all of the information you need about what making this move can do for your retirement years.
For more information on reverse mortgages.
Find ways to save.
The first step to getting out of debt is saving more. There are a number of ways you can save money as an older adult. Look into senior citizen discounts at hotels and restaurants. Another good idea is to look into special membership programs with organizations like the American Association of Retired Persons (AARP). There are also discount programs for prescriptions and other services you may need. Though these discounts can't help you with debt, they can keep you from spending more money than necessary.
One of my favorite FREE budget tools in Mint.com Mint brings all your financial accounts together online, automatically categorizes your transactions, lets you set budgets & helps you achieve your savings goals.
I believe everyone can save and get out of debt at any age. The most important thing is to never lose sight of your goals and to keep at it,one step at a time!
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