The best thing you can do is start making a plan to pay of these debts as soon as you can. While it’s best if you can do this before you retire, for some of you that time has already passed. No matter how far off your retirement may be, or how long ago it started, the best time to start preparing to pay off these debts is now.
Form a Plan
In order to pay off your debts in a timely fashion, you’re going to need a debt payment plan. Take some time to map everything out, including your income, your expenses, and your debts. Having everything written down – or typed up in a spreadsheet – can help you to visualize your financial situation. From there you can determine how much you can afford to put towards your debts, and how long it would take you to pay everything off.
Bring in Extra Income
To pay off your debts faster it helps to bring in some extra income. If you have more money, you can put more towards your debt, and not only pay off the principle faster, but keep the interest from piling up. But how can you bring in extra income?
For starters, you could take on a part-time job. While your career might be over, that doesn’t mean you can’t still work. There are plenty of places willing to hire retirees for part-time work. This would earn you some extra income and get you out of the house for a few hours each week.
Besides that, you could look into getting a reverse mortgage. A reverse mortgage allows you to get monthly cash payments using the equity on your home. They are only available to seniors, and make sense if you plan on staying in your home for a while. You can check out this guide for answers to all your reverse mortgage questions.
Your third option is to sell things you no longer need. You have probably accumulated a lot of stuff over the years, and it’s just sitting in your home. Take some time to go through everything, see what you no longer need, then work on selling it. You could host a garage sale if you want or start posting things individually online. Take any money you earn and apply it directly to your debts.
If you can’t bring in extra income, cutting your expenses will have the same net effect. Now that your retired, you probably don’t have as high of a cost of living. One small example – you don’t need to buy lunch every day from your office cafeteria. Or maybe, now that you’re not driving to work every day, you and your spouse don’t need two cars. By selling one car you could put the money towards the debt, and save thousands of dollars each year on insurance, gas, and maintenance costs.
Go through what you currently spend money on and see if there are any ways you can scale back. Every dollar helps, so go ahead and cut out even the smallest of things. Then, for each dollar you save, you can put that money towards your debts.
Get Expert Advice
Finally, if you’ve done all of the above and you’re still struggling to pay off your debts, consider getting some expert advice. There are people out there who make a living advising others on how to manage their finances, and they can probably help you. Even though this service will cost money, if it helps you save thousands on your debt repayments, it’s probably worth it.
Get Back to Enjoying Your Retirement
You’ll probably enjoy your retirement a lot more if you don’t have to worry about your debts. Then you’ll have more money to do the things you want and spend less time stressed out. Spend some time going over the suggestions above and see if you can formulate a plan. Hopefully you’ll be able to come up with something that will allow you to pay off your debts in a short amount of time, and then you can go back to enjoying your well-deserved retirement.
– Finance Twitter