Older Americans carrying debt can feel like they’re drowning. If your income has stayed consistent but your bills have gone up and up and up, what are you to do? If you’re older, you’re not exactly looking forward to a long career of raises and investing in the stock market to pay off dividends. You need to get a handle on this debt, fast. What can you do?
How to Fight Back Debts
No New Debts
If you’re stuck in a hole already, stop digging.
Step one is to stop taking on new debts. Throw your credit cards in a drawer and forget about them. From this point forward you need to spend only the money you have on hand. Taking on ever more and more debt will make it impossible to climb out of the hole you’re digging.
Prioritize
Step two needs to be identifying which of your debts is compounding the most interest. Those are the debts you need to focus on paying down first. The best way to do this is going to be drawing up a comprehensive budget for yourself. Print out twelve months of your bank statements and interrogate your finances. Where is your money going?
Once you have a handle on where your spending is going, you can make a sensible budget for how to pay your debts down. This will allow you to focus on the highest-interest debts first, paying them down so you save more money in the long run.
Cut Back
How much do you spend on your cable bill? How about subscriptions to clubs or gyms you never use? While you’re drawing up that budget, it’s time to cut back on your extraneous expenses. Paying for food, gas and a bit of leisure time is fine, of course. But if you’ve got more than 100 bucks going out for the cable bill, it’s time to make some cuts.
You can even look into downsizing your home if it’s your mortgage that’s causing your debts to pile up. Likewise, if your car payment is what’s eating up your money, sell that car and look into other transportation options.
Remember, you can do this. Just calm down, take a deep breath, and handle your finances in a logical and level-headed way.
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