Tips For Getting Out of Debt
Americans are more in debt now than ever. That includes those who are retired, or close to retired.
Once upon a time, retired folk used to spend their savings on zippy new sports cars or the boat they’ve always wanted. These days, a third of senior citizens are using credit cards for living expenses. In 2010, a study found many older Americans have an average of $50,000 in debt! How do you dig your way out of debt later in life?
Certified financial expert Karen Lee offers up tips on how to get out of debt:
- Consider debt consolidation: if you have credit card debt, consider this option. Lee says this is a service that can bundle all your consumer debt and help consolidate the payments.
- Refinance your mortgage: If you’re retired and you have a longstanding mortgage that you haven’t re-financed, a refinance (even for the same length of time) may lower your payment.
- Downsize! Sell or get into a smaller home if possible. If you’re behind on payments, consider renting out a room for some extra monthly income.
- Talk to your adult children about the financial situation, they might be able to help relieve some of the pressure or stress.
- Do your research before considering a reverse mortgage. Read the fine print and get legal advice before committing!
- Plan for your retirement ahead of time and cut excess spending. Lee advises to convert to a 15-year mortgage, invest heavily in your 401K and stop supporting adult children!