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.