Tips & advice on getting your finances back on track.
According to the Federal Reserve, American consumers have accumulated over $1.057 trillion in total credit card debt as of March 2019. This amount exceeds the pre-recession record of $1.02 trillion in 2008. This statistic on its own is alarming, but what is more unsettling is that people age 60 and older owe roughly 30 percent of that debt.
The question becomes, why are some many older Americans amassing high credit card debt? According to the United States Social Security Administration, the average monthly social security payment is $1,461, which totals $17,532 per year. As the cost of living continues to increase, in some places by as much as 4.6% per year, many older Americans struggle to meet their basic needs and they begin to rely on credit to meet those needs. Health care costs can be astronomical. Fidelity Investments estimates that the average couple over the age of 65 may need assets in excess of $285,000 for the remainder of their lives to meet medical expenses in retirement. This does not include long-term care.
Older Americans are often forced to file bankruptcy. A study identified that the rate of Americans over the age of 65 filing for bankruptcy has increased by 204% from 1991 to 2016. For those that need minor assistance, we suggest they start by creating a realistic budget. It is imperative to know how much money is being spent each month. It is then important to prioritize payments. Housing, food, utilities and health care should be the main priorities each month. Ensuring the success of maintaining a budget may require lifestyle adjustments. This may include part time employment or downsizing to a smaller home.
Read More: How To Create A Budget
For those that feel that they need additional help, it is important to realize there is no shame in asking. Speaking with family can be quite helpful. If family and friends are not in a financial position to assist, a certified credit counselor will be able to assess the situation and provide resources and recommendations, including debt management. You can reach a Navicore Solutions certified credit counselor at 1-800-992-4557.
Kim Cole is the Community Engagement Manager for Navicore Solutions. Kim provides financial education workshops and seminars to communities. Readers can submit general questions relating to personal finance, credit scoring, debt management, student loans, home finance or bankruptcy which may be highlighted in the next month’s edition. All identifying information will be kept anonymous.
Please send your questions via email to DearKim@navicoresolutions.org