8 Debt Reduction Tips for Seniors
Debt prevention and reduction are important at any stage of life, perhaps even more so for seniors, baby boomers, zoomers, and 50+ people in general, that are facing reduced/fixed incomes now or in their approaching retirement future.
8 Tips to Help Reduce Debt:
- Create a budget – use free budgeting tools or apps to help track spending, pay debts and live within your income. Most major banks, credit unions, and trust companies, offer free in-house online tools and apps for clients. There are a host of online budgeting alternatives to consider; among them, free options like Mint (US) and Koho (CAN).
- Set financial goals and plan ahead for your retirement & lower income years. Of course, contacting a financial advisor or planner is an important and often overlooked step. Once again, there are may options for this available to you from independent advisors to those who are employed by financial institutions. You do not usually have to pay for them to help you create a financial plan, but it’s best to fully understand all fees that may apply and how your planner is paid in advance, before choosing an advisor.
- Use credit cautiously and avoid impulse purchases
- Pay off high interest debts first
- Replace high-interest loans with lower-rate financing by restructuring or consolidating debt
- Consider keeping money in investment accounts instead of taking big lump sums to pay off debt when interest rates are low
- Bump up loan payments slightly to reduce interest costs
- Property rich and cash flow poor? Consider borrowing against the equity in your home (it’s tax free)