The burden of debt can weigh heavy on any person, but it can seem especially insurmountable to older Americans. After all, the 50-and-older age group has crossed the threshold where they are, at least statistically, closer to the end of their life than the beginning, and more likely than younger adults to be retired and living on a fixed income.
“In my line of work, I’m seeing a large number of seniors that are trying to pay off debt,” said Stacey Lannoye, a financial education manager for BECU. Lannoye leads seminars in financial management attended by people of all ages, in high schools, colleges, community centers and senior centers. On February 12, she’ll be teaching a class titled “Reduce Your Debt, Increase Your Freedom” at Bonney Lake Senior Center.
The reasons for increasing debt among seniors are many. For one, the 2010s are seeing the greying of the baby boomers, a generation that grew up at the same time general use credit cards gained popularity.
Family patriarchs and matriarchs may also sacrifice their own financial well-being for the sake of their relatives.
“From my own experience with my grandparents, seniors often want to help their family members, regardless of their own financial situations,” Lannoye said. “I may have a client who says ‘I have to give my daughter money, I have to give my daughter money.’ And I’ll tell her ‘That’s fine, but you have to think about how you can help your daughter if you’re burdened with debt yourself.”
Unexpected life events also play a big role in financial health. The death of a spouse, for example, generates funeral costs and throws a wrench in even the best-laid life plans, Lannoye said.
But there is help, and the first step is often to be slightly more willing to talk about your financial situation.
“Often with this age group, there’s an embarrassment of talking to someone about it,” Lannoye said. “They feel like they’re supposed to have a handle on money by now.”
However, it can be beneficial to talk to a trusted family member about debt so that, if nothing else, the burden of the secret is gone, she said.
The next step is to write down a complete and honest record of household finances. In Lannoye’s seminar, students audit the finances of a fictional family, recording income and assets, then expenses and debt. Debt is kept on a separate page so that when students subtract expenses from income and assets, they know what resources they have to pay off debt before making a plan.
When recording your own expenses, Lannoye suggested keeping a spending diary and exhaustively recording spending habits.
“I always tell people to keep a spending diary, because whether you buy a cup of coffee at Starbucks, or even go to a vending machine, it all adds up,” she said. “It is part of the most important piece of financial planning. Every situation is so different. Go back and look at each individual expense and decide what’s vital and what can be eliminated.”
The next step is to make a plan for paying off the debt with available resources.
The final step is to stick with the plan. Like faith without works, thriftiness without motivation is dead. The best way to stick with a plan, Lannoye said, is to set a financial goal.
That goal should be as specific as possible, including specific amounts of money and self-set, realistic deadlines.
“The goal should be more than ‘I will reduce my debt,’” she said. “It should be ‘I will pay off this amount of money by this amount of time, using this income.’”
For updates on Lannoye’s upcoming financial seminar, call Bonney Lake Senior Center at 253-863-7658.
