Are you a senior citizen? Are you wondering how you can get out of debt?
Life happens, and sometimes bills can get away from us. Maybe you needed to pay for your child’s education or take advantage of a business opportunity. This can leave seniors drowning in debt and eager for relief.
Believe it or not, there are a number of resources available for seniors in debt, as well as some ways to help you improve your credit.
Here are some of our favorite tips for seniors retiring in debt.
1. Get a Part-Time Job
Generally speaking, you’re allowed to get a part-time job while receiving social security benefits as long as your earnings don’t exceed a certain pre-determined amount.
This means that you can work part-time and use the money you’re getting to pay off any debts. It’s usually a good idea to prioritize the debt with the highest interest rate by paying it off first.
Besides alleviating your financial burden, part-time jobs give you an excellent way to stay active and keep your brain sharp. You can also make important social connections and maintain your sense of purpose, something that many long for during their retirement years
Now that you’re retired, you can begin to prioritize your own comfort when it comes to a job. Maybe you’ve always wanted to work at a pro shop or become an attendant at your favorite day spa. Or maybe you love kids and would like to get some handy cash working as a caregiver.
Finances can seem even more overwhelming when you aren’t doing anything to relieve your problem. With a solid part-time job, you can know that you’re working daily to lessen your debt burden. And that’s a very good feeling!
Many seniors have assets, such as homes or cars, that they’ve worked hard to maintain. Selling your home and moving into a smaller house or apartment is one way that many seniors pay their debt off.
Downsizing becomes even easier as your children move out and you don’t need the space. Many apartment complexes also offer services like landscaping and snow-shoveling, which can be trickier to manage yourself as you get older.
If you’re living alone, getting a roommate can help you save big on living expenses and utility bills. The living situation can also help you ward off loneliness and keep your mind sharp and active.
If it’s convenient, you may also want to look into selling your car and walking or taking public transportation. You’ll get rid of the monthly car payments, and insurance bills, as well as the stress that comes with driving.
3. Create a Budget
It’s never too late to start budgeting. If this isn’t something you have experience with, you can get a trusted friend or family member to help you set one up.
A simple household budget will involve a spreadsheet in which you keep track of all your monthly income, as provided by social security benefits and retirement savings. You’ll also want to list your monthly expenses and make sure your income will cover them.
Make sure you include your debt payments as a part of your expenses each month. Keeping up with paying them off may mean you’ll need to curtail your lifestyle.
4. Cutting Back
Paying off debt as a senior may mean you’ll need to make sacrifices in other areas. You may not be able to go out to eat or take vacations you were looking forward to. However, your peace of mind about your financial situation may make the trade-off worth it.
Lots of activities you can enjoy as a senior don’t require any spending at all. Write that book you’ve been meaning to start or join a walking group in your community. You may find that cutting back on spending gives you a life you’ve never experienced before.
As a senior, you’ll be able to take advantage of special discounts. When you’re shopping for clothes and food, make sure you’re aware of all of the discount options available. These are especially easy to find regarding entertainment.
Many coupons are available online for anything from prescriptions to home furnishings. If you aren’t sure how to take advantage of digital couponing, ask a relative or friend to help you. Most stores you use for your needs also have rewards programs that will allow you to save if you shop there frequently.
5. Pay All Your Bills On Time
Even if you’re prioritizing certain bills, you’ll need to make at least the minimum payments on your other accounts each month. If you don’t, your interest rates will increase and you may have to pay penalty fees.
Using auto-pay can help you avoid getting into trouble simply because you forgot to pay off certain bills. It can also force you to be accountable for paying off your debts each month, which will raise your credit score.
Auto-pay is easy and convenient, saving you the trouble of finding an envelope and stamp every time a bill is due. If you aren’t sure how to set one up, ask someone you trust for help. You can make sure the money comes out of your bank account each month after you receive the monthly income you’re living on.
Help For Seniors in Debt
Retirement can be a tricky time, and it’s especially confusing for seniors in debt. However, with the right plan and some solid budgeting, you could be enjoying your golden years in no time.
Don’t stop getting smart about debt repair now. For more information, contact us today.