Guest Contributor Barbara Delinsky is a writer who loves to write for different financial websites. She has covered various topics such as debt, budgeting, managing personal finance, and retirement.
Retirement is the golden period of your life when you retire from your job and want to lead a peaceful life. To make your retired life more relaxed, individuals should save enough during their working years, preferably starting a savings program as soon as they get their first job.
Unfortunately, many do not and suffer under the burden of debt and financial worries in retirement. That failure to prepare means that when you purchase something beyond your means, you’ll be forced to borrow from your loved ones or utilize credit cards. Thus, you might easily fall into greater debt problems. If you have retired with debt, it is quite obvious that you’ll be worried as to how you can get rid of it completely. While difficult, it is possible to eradicate debt even after retirement and enjoy a better financial life.
Are you among those retirees who have retired with debt hanging over your head? If yes, then you are likely spending restless nights thinking as to how you can reduce debt soon. Check out these three tips to deal with personal finance efficiently for those that have retired with debt.
Spend as little as possible after retirement – Your working life and retirement life are not the same at all. When you were employed, you received a salary every month with opportunities for promotions, raises etc; a chance for increased income. Also, because of your job status, you were more eligible for a loan in case big expenses arose. On the other hand, retirement won’t give you the chance to spend lavishly since your income will be more fixed and you’ll have to manage everything within that limit. If your debts are significant, try to reduce your expenses and work towards eliminating the debt quickly.
Build a fund and save for the emergencies – Personal health problems or the health problems of family members may happen anytime; and after retirement, it is not that easy to manage the fees of the doctor and high medical bills. Ideally, an emergency fund would have been built prior to entering retirement. If not, money from savings accounts might be used to pay off debt and manage emergencies. While your priority should be to pay off debts, make an effort to slowly add to an emergency fund.
Swipe credit cards only when you really need them – Unfortunately, some retired persons find credit cards to be their only financial help when they need cash after retirement. As you build your savings and emergency fund, you may find yourself in a position where you have to utilize credit cards. Keep in mind that you should only swipe credit cards when there is no other choice. When you do use credit cards, you should make it a point to pay down the outstanding balance on a monthly basis.
If you have retired with debt, then this is certainly a source of stress for you. In order to enjoy a good retirement life, you should try to eradicate all your debts as soon as possible. The earlier you are relieved from the debt, the better you’ll be able to manage your personal finances. Keep in mind the above-discussed tips when considering how retired persons with debt can keep a grip on their finances.