The 5 Keys To Avoiding Debt During Retirement

Congratulations! You have made it to retirement debt-free and with adequate savings to enjoy your golden years. However, do not be overeager to spend your money. While it often feels nice to let loose of the purse strings a bit, keep in mind that you still have many years ahead.

Therefore, while most will encourage you to relax and live a little, make sure you are staying
within your means. You don't want to spend the rest of your life trying to unbury yourself from debt. There are at least five ways to stay clear of debt while still enjoying your life.

1. Adhere To Personal Spending Limits

Making it to your retirement without debt most likely means you know how to budget. There is no reason to stop budgeting just because the requirement of a 9-to-5 is over. You want to look at your expected income every month, from social security and retirement contributions, and determine monthly income. You cannot go above this number. Take out the money for essential expenses, like groceries and utilities, and establish a fair spending limit or allowance. Adhere to this allowance, and you should be fine.

2. Pay With Cash

Too many seniors fall victim to credit card use. While using credit is helpful when you're in a bind, it should never be used like free money. Anytime you use a credit card, pay the balance before accruing interest. Also, when possible, use cash. You do not have to worry about interest and debt when using spendable income. Credit cards are a tool to maintain your credit score, nothing else.

3. Avoid Financing

If remaining debt-free is your focus, then avoid any options to postpone it. Interest-free financing or buy now, pay later specials only delay the inevitable. Unfortunately, most of these marketing ploys come with significant caveats, like high interest at the end of the promotional period.

If you do not pay attention to the fine print, you may end up paying more than the original purchase is

4. Avoid Impulse Buys

Impulse buys are detrimental to the savvy retiree. While you may have an allowance, keep in
mind that unplanned purchases add up quicker than you think. For example, if you go to market with a plan for groceries and take a detour into the appliance or technology sections, it is easy to leave spending hundreds more than expected. Impulse buys quickly eat through spending cash and may end up reducing money meant for essentials.

5. Comparison Shop

If you find something that you want when out, do not immediately purchase it. Instead, go home and research the item. Look for other sellers or coupons. Comparison shop. By restricting the impulse for immediate satisfaction, you can save yourself a bunch of money. Remember, retirement is supposed to be slow and easy; there is no reason to rush.

Avoiding debt does not have to be complicated. With careful planning and an understanding of your financial obligations, you can easily maintain a debt-free retirement. If you want more
financial and retirement advice, continue reading the Wise Ol' Crow.

Lor - August 27, 2020

Thank you. This is a informative site. I will implement this information in my life. I am doing some of the points. I need to use the rest of them.

Thomas - August 27, 2020

Good advice in a nice, tight succinct article. Well done.

Helen - August 27, 2020

My Mum taught me all of those right from the very beginning, she was a canny Scot. Always ask myself, “Do I want or do I need”

Enjoy your column very much, common sense, which is not so common these days.

Gordana Prince - October 26, 2020

Thank you for the advice. I am already doing most of it, but must implement impulse buying and ask my self “do I need it”? If I don’t need it, why do I want it, go without.

Ann - October 26, 2020

I seldom if ever use a credit card. Do not remember when I ever did. Its like a dose of heroin, its a decision that can ruin your hopes and dreams. Shop around, in some cases you can do wonders at discount stores, yard sales and used items in the newspaper.

Rebeca - October 26, 2020

I also highly suggest if you have an extra bedroom (I have 2) that you rent one of them out. I had a young man rent from me for 2 years and it was great. I could use the extra savings and he was a real sweetheart. In the process of finding a new renter now.

Comments are closed