Should you file bankruptcy after retirement?
You may be entering retirement with debt and wondering whether you should consider filing for bankruptcy? You’re not alone. Retirement to most workers signifies a time of rest from their labor, but debt looming over your shoulder can create stress on that rest.
This article covers focuses on tips to avoid bankruptcy, debt settlement, debt management, and all debt relief options. That said, if you do choose to pursue debt relief route, you may wish to compare options such as debt settlement vs bankruptcy or debt management vs debt settlement to be most informed about your options.
Words like easy living, healthy retirement living, enjoyment, 401k are associated with this period. It’s rather unfortunate that these dreams are just a mirage to a lot of retirees as they haven’t saved enough for this period. If you live on a fixed income, it might be difficult to slow down on your spending, especially after years of working, and you’ve built a habit around your income.
If you want to minimize how you spend money so that you can have a glorious retirement, then this article contains essential tips that will assist you in the endeavor.
Tips to Maximize Your Dollar
You may wish to read articles covering Dave Ramsey as he provides information that helps you get out of debt without debt relief. If you want to effectively manage what you earn, then you should first divide your monthly spendings into three different categories to properly understand your spending pattern. Here are three basic areas that are probably consuming a chunk of your finances. They are:
- Debt Payments
- The Extra
- The Essentials
1) Reducing Fixed Costs
Fixed costs are those unchanging cost that you will definitely take a part of your money; Your essential needs such as cost of groceries, rent, and utilities fall into this category of costs. They are impossible to get rid of, but you can reduce the amount you spend on them by following the tips given below:
You may realize that you have too much space at your current resident.
- Share the cost of renting an apartment by getting a roommate if you’re single.
- If you’re within the age bracket that qualifies for the senior housing assistance program, then request for a housing assistance
- Read tips for saving energy at home, and incorporate the tips there into your daily routine.
- You may wish to utilize grocery delivery services to avoid going to the grocery store as often.
- Buy canned foods and other food that can be stored in bulk during sales.
2) Reducing Variable Costs
If you’re looking for some tips on how to minimize what you spend on non-essential costs like entertainment etc. Then try these tips written below;
- Buy your cloth from a store that offers quality second-hand cloths
- Shop for cloth during end-of-season sales
- Use a capsule wardrobe plan for your outfits
- Use services that offer senior discounts if you qualify for it.
- Go to the grocery store only when you have other reasons to leave your home
- Go on outings that don’t require much financial commitment.
- Ask your cable TV service providers for discounts, and subscribe annually as most cable TV service providers have discounts for customers who pay for their 12-month plan.
3) Reducing Your Debt Costs
One of the most difficult financial situations to be in is one where you must pay off your huge debt, with only a small income. If you fall into that category of individuals, then you should read these tips as they will help you pay off your debts faster:
Debt “Snowball” Method
This is a strategy for reducing debts that work by paying off your smallest debt first, then focusing on the much larger ones later.
To pay off your debt with this method, first list your debt from the smallest to the largest, then each month after paying off your essential expenses and the minimum amount on each debt, commit any extra dollar you have remaining into paying off the smallest debts. After you must have settled your smallest debt, then move on to the next biggest one. Continue doing this till you’ve cleared off your debt.
Debt “Avalanche” Method
This method works opposite to the Debt snowball method, as it requires that you pay off those debts with the highest interest rate, then focuses on others. This approach is the most advisable approach as it helps you to save money. However, it requires a lot of determination as it’s usually hardest at the beginning, and it takes time to get your first debt payoff.
Debt “Savvy” Method
The Savvy debt payoff planner app uses the Savvy Debt Payoff method that combines the best of bot the avalanche and the snowball method. It focuses on psychological wins of paying off the lowest debt amounts. It then focuses on the debts with the highest interest rates to save you interest fees and get you out of debt sooner.
Planning for the Long-Term
Irrespective of your age, you should always make plans for the future; this should hold true for your life whether you’re 25, 55, or 85. Here are some tips on how to arrange your finances.
Have a Budget
It is necessary that you save money for unforeseen s circumstances and investment if you want to have a good hold on your finances. There is happiness in saving money you could have spent on something irrelevant. Create a budget (i.e. a Google sheets budget) that will help you reach your financial goal in the future.
Without the requisite knowledge and motivation, it can be pretty difficult to solve financial problems. If you’ve identified someone that is very good at managing his/her finances, then you should get advice from such an individual; whether it’s a business-minded grandson, an older colleague at work, or even a professional personal finance coach.