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NINE SIMPLE WAYS TO GET OUT
OF DEBT
Many SENIOR FINANCES eColumns deal
with challenges common to men and
women around the globe.
One of them is that four-letter word known
as DEBT.
Granted, you may be set for life and not
owe anyone a dime. If so, congratulations!
If not, you are part of an increasing
number of Seasoned Seniors who are
racking up greater amounts of consumer
credit.
OF DEBT
Many SENIOR FINANCES eColumns deal
with challenges common to men and
women around the globe.
One of them is that four-letter word known
as DEBT.
Granted, you may be set for life and not
owe anyone a dime. If so, congratulations!
If not, you are part of an increasing
number of Seasoned Seniors who are
racking up greater amounts of consumer
credit.
How can you improve your finances?
Here are nine basic ways to begin getting your head
above monetary floodwaters:
TRACK YOUR SPENDING HABITS
Information is power! So is reality. Write down every
dollar you spend for the coming month. Keep a small
notebook in your pocket or purse and record your
expenses. Maybe you will see that the daily trip to the
neighborhood coffeehouse for the $5 café mocha
could be costing you up to $1825 a year or more
(especially if you are putting the daily coffee breaks
on plastic, then only paying the minimum each
month). Use that money, or even half of it, to pay off
some of your debts. "It's just a little," is often the
excuse that ends up costing a lot.
HAVE A PLAN, THEN LIVE BY IT
Yes, the B-word! Budget. Once you see where your
money is going, come up with a plan for paying your
bills and getting out of debt. Set priorities. Above all
else, be realistic. If it took you years to get into debt, it
will take more than a month or two to stop drowning in
red ink.
Here are nine basic ways to begin getting your head
above monetary floodwaters:
TRACK YOUR SPENDING HABITS
Information is power! So is reality. Write down every
dollar you spend for the coming month. Keep a small
notebook in your pocket or purse and record your
expenses. Maybe you will see that the daily trip to the
neighborhood coffeehouse for the $5 café mocha
could be costing you up to $1825 a year or more
(especially if you are putting the daily coffee breaks
on plastic, then only paying the minimum each
month). Use that money, or even half of it, to pay off
some of your debts. "It's just a little," is often the
excuse that ends up costing a lot.
HAVE A PLAN, THEN LIVE BY IT
Yes, the B-word! Budget. Once you see where your
money is going, come up with a plan for paying your
bills and getting out of debt. Set priorities. Above all
else, be realistic. If it took you years to get into debt, it
will take more than a month or two to stop drowning in
red ink.
LIVE WITHIN YOUR MEANS
Mom was right. Today, more than ever before, it is easy to live large in an age of easy
credit and unlimited opportunities to spend. Housing, food and transportation are always
three big problem areas seen by credit counselors. Eating out regularly is a considered
normal today, though it would have been unthinkable a generation or two ago. If you
can't go "cold turkey," get smarter. There are many restaurants that cater to Seasoned
Seniors on a budget. Find them. Use them. There are creative ways to save with each of
the three challenging areas.
PAY MORE THAN THE MINIMUM ON PLASTIC
Face it, credit card and finance companies would love for you to only pay the miniumum
each month. The balance takes much longer to pay off, and you wind up paying interest
on interest. Often this means paying several times the item's original cost. That $200
splurge with the kids and grandkids can eventually cost you a half-grand. That's a lot for
a few lobster dinners. By paying more than the minimum on your debts, you can save
thousands each year.
MINIMIZE YOUR CREDIT CARDS
Everybody has time of challenges when it gets easy to get behind, but if you have a long-
term problem (more than a few months) of not being able to pay off your balance every
month, it is time that you close your accounts and carry only one credit card for
emergences. Don't leave credit card accounts unused, since your credit rating may
suffer (those credit limits are seen as potential debt).
DON'T LET REAL ESTATE OWN YOU
One of the myths is that buying a home is always a good investment. It usually is, but
there are times and situations when you may be smarter to rent, especially if you are
only going to be in a house for a short time. And while we are on the subject, figure out
how much you can afford to pay for a house payment BEFORE you go house hunting.
Nearly every real estate company Website has a payment calculator. Use it. Then still to
a monthly price that is within your comfort level. Realtors and mortgage lenders will
qualify you for the most house you can afford. Sometimes that over-exposes you
financially, especially if anything goes wrong or the economy takes a downturn.
GET ANOTHER HOBBY BESIDES SHOPPING
Shopping is fun. It can be healthy and keep you active. But it can also control you if you
succumb easily to impulse buying. Using shopping as a recreational activity is often a
source of unnecessary debt. How do you know if you are out of control? Look in your
closets, your garage, under your bed. Do you have "stuff" that you absolutely couldn't
live without that you have never used? Do you have four of the same thing, just in case?
Get another hobby!
SHOP FOR UTILITIES AND OTHER NECESSITIES
Instead of walking the malls and antique houses as much, spend time trimming the fat
from your monthly bills. It's okay to be loyal to your phone, electric, gas and insurance
companies, but in an age of deregulation and still competition, it makes good sense to
check out alternative rates. Less going out each month for the necessities means more
to free yourself forever from debts.
And that's the point. Get debt-free. Get debt-free as soon as realistically
possible. Why? Living debt-free increases your exciting options as you become
"older, wiser, healthier, better!"
Mom was right. Today, more than ever before, it is easy to live large in an age of easy
credit and unlimited opportunities to spend. Housing, food and transportation are always
three big problem areas seen by credit counselors. Eating out regularly is a considered
normal today, though it would have been unthinkable a generation or two ago. If you
can't go "cold turkey," get smarter. There are many restaurants that cater to Seasoned
Seniors on a budget. Find them. Use them. There are creative ways to save with each of
the three challenging areas.
PAY MORE THAN THE MINIMUM ON PLASTIC
Face it, credit card and finance companies would love for you to only pay the miniumum
each month. The balance takes much longer to pay off, and you wind up paying interest
on interest. Often this means paying several times the item's original cost. That $200
splurge with the kids and grandkids can eventually cost you a half-grand. That's a lot for
a few lobster dinners. By paying more than the minimum on your debts, you can save
thousands each year.
MINIMIZE YOUR CREDIT CARDS
Everybody has time of challenges when it gets easy to get behind, but if you have a long-
term problem (more than a few months) of not being able to pay off your balance every
month, it is time that you close your accounts and carry only one credit card for
emergences. Don't leave credit card accounts unused, since your credit rating may
suffer (those credit limits are seen as potential debt).
- KEEP LONG-TERM COSTS IN MIND
Notice that the automobile salesperson, the
furniture retailer and the housing
professional know to focus on the monthly
payment. You, on the other hand, must
consider what the can't-live-without item will
cost long-term. That plush interior on the
new sedan may smell and feel great, but
you have to be merciless when you pencil in
the on-going costs such as maintenance,
insurance and taxes. Above all, be careful
of getting stuck in low-down-payment and
low-interest loans that wind up being top
heavy. You can get stuck with a vehicle that
you can't sell because you owe more than it
is worth.
DON'T LET REAL ESTATE OWN YOU
One of the myths is that buying a home is always a good investment. It usually is, but
there are times and situations when you may be smarter to rent, especially if you are
only going to be in a house for a short time. And while we are on the subject, figure out
how much you can afford to pay for a house payment BEFORE you go house hunting.
Nearly every real estate company Website has a payment calculator. Use it. Then still to
a monthly price that is within your comfort level. Realtors and mortgage lenders will
qualify you for the most house you can afford. Sometimes that over-exposes you
financially, especially if anything goes wrong or the economy takes a downturn.
GET ANOTHER HOBBY BESIDES SHOPPING
Shopping is fun. It can be healthy and keep you active. But it can also control you if you
succumb easily to impulse buying. Using shopping as a recreational activity is often a
source of unnecessary debt. How do you know if you are out of control? Look in your
closets, your garage, under your bed. Do you have "stuff" that you absolutely couldn't
live without that you have never used? Do you have four of the same thing, just in case?
Get another hobby!
SHOP FOR UTILITIES AND OTHER NECESSITIES
Instead of walking the malls and antique houses as much, spend time trimming the fat
from your monthly bills. It's okay to be loyal to your phone, electric, gas and insurance
companies, but in an age of deregulation and still competition, it makes good sense to
check out alternative rates. Less going out each month for the necessities means more
to free yourself forever from debts.
And that's the point. Get debt-free. Get debt-free as soon as realistically
possible. Why? Living debt-free increases your exciting options as you become
"older, wiser, healthier, better!"
| Watch for the next SENIOR FINANCES eColumn... Ten Questions to Ask Your Auto Mechanic |
Feedback? Comments? Suggestions for future eColumns?
Email Senior Finances now
Or write:
MyBestYears.com
ATTN: Senior Finances
PO Box 2630
Grapevine, TX 76051
Email Senior Finances now
Or write:
MyBestYears.com
ATTN: Senior Finances
PO Box 2630
Grapevine, TX 76051
|
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