How to Pay Off Debt After 50 and Live Your Best Life
As women over 50, we know that life is too short to be weighed down by debt. Whether you’re looking to clean up your credit for a future purchase or just want to feel the freedom of being debt-free, we got you covered. We’ll share practical tips and advice to pay off debt and get rid of debt stress. So put on your favorite playlist, grab a coffee and let’s dive in!
Organize Your Debt: Knowing is Half the Battle
The first step to paying off debt is knowing what you owe. Create a spreadsheet with the current total amount due, available credit, minimum payment due, and the percentage rate you’re being charged. Add up everything, including credit cards, money owed to family or friends, medical bills, tuition, etc.
Make it a point to stop spending on your lines of credit that day. You want the arrow pointing down, not up. Pay cash for things from this point on. Write down your monthly bills that aren’t based on revolving credit, such as electric, water, cable TV, internet service, phone bill, gas, groceries, haircuts, clothing. This helps you see exactly where your money has to go each month.
Decide How You Want to Pay Things Off: Snowball Your Way to Financial Freedom
The snowball method involves starting small and ending up on a roll, making bigger payments. There are two lines of thought in approaching how you should pay off debt. The first method involves listing your debt in order of highest to lowest interest rate. This means paying off the card with the highest interest rate first, which saves money in the long-run because you’re no longer paying that high rate.
The second method is to list your debt in order from smallest amount owed on your credit cards to largest amount owed. This allows you to see a credit card paid off in full – and that frees up a minimum payment that you then apply to the next smallest credit card in your list. Both ideas are good – only you can decide which approach would better suit you.
Create a Budget and Stick to It: Spend Less Than You Earn
Without a family budget, you won’t make much progress in paying off your debt. Write down what you and your spouse earn. Pool all sources, including child support or alimony if you’re divorced. Add up the incoming monies and compare it to the debt you have in regards to minimum payments.
Tally up everything – school fees or activities, birthday parties, Christmas, and fun things you do as a family. You might need to go back through past statements to see what you’ve spent on discretionary items. Build up an emergency fund that covers at least three months’ worth of your necessary payments.
Figure Out How You Can Earn More and Spend Less: Make Frappes at Home
Cutting down on expenses is key to paying off debt quickly. Get rid of unnecessary expenditures such as newspapers, bottled water, landline phone service, and extra cable TV channels. Bundle services to save money. Save on electricity and water. Quit eating out and make a meal plan. Look for cheaper forms of entertainment.
To earn more money, get a second job, host garage sales, sign up for programs where you host parties and earn money, or make money working from home online. Put all that extra dough toward your old debt.
Are you looking for ways to make extra income to pay off your debt?
Here are ten ideas that might work for you:
1. Freelancing for Extra Income
If you have a skill, such as writing, graphic design, or programming, you can offer your services on freelance websites like Upwork or Fiverr. Freelancing can be done in your spare time, and you can earn a decent income from it.
2. Sell items online
Have you accumulated items over the years that you no longer need or want? You can sell them online on websites like eBay, Craigslist, or Facebook Marketplace. You can also sell handmade items on Etsy.
3. Rent out a room
If you have a spare room in your home, you can rent it out on Airbnb or other vacation rental websites. You can earn a good income from short-term rentals.
4. Do odd jobs
You can offer to do odd jobs, such as yard work or house cleaning, for people in your neighborhood. You can advertise your services on social media or local classifieds.
5. Rent out your car
If you have a car that you don’t use often, you can rent it out on websites like Turo or Getaround. You can earn money while your car is not in use.
6. Pet-sitting or dog-walking
If you love animals, you can offer to pet-sit or dog-walk for people in your community. You can advertise your services on local classifieds or social media.
7. Tutoring for extra income to pay off debt
If you have expertise in a particular subject, you can offer tutoring services to students. You can advertise your classifieds or through online tutoring platforms like Tutor.com.
8. Virtual Assistant
Many small business owners need help with administrative tasks such as email management, scheduling appointments, or social media management. You can offer your services as a virtual assistant through websites like Upwork or Virtual Assistant Jobs.
9. Delivery services
Many people delivery goods to make extra money in their spare time, You can earn extra money to pay off debt by delivering food or packages for companies like Uber Eats, DoorDash, or Postmates. You can set your own schedule and work as much or as little as you want.
10. Rent out your parking space
If you live in a busy city where parking is at a premium, you can rent out your parking space on websites like Parklee or JustPark. This is an excellent option if you have a parking spot that you’re not using.
Once You Get Out of Debt, Stay There: Avoid Falling Back Into Old Habits
The most important thing to remember is that once you start digging your way out of debt, you can’t fall back into the old trap. Save up cash and spend it that way. Using cash for purchases can often save you money – not just in the absence of interest charges – but because retailers will sometimes give you a discount when you pay cash.
Save up an emergency fund that covers at least three months’ worth of your necessary payments. That way, you’re covered in case you have an issue that lasts longer than a few days off work – or an emergency pops up that you weren’t prepared for.
Celebrate Your Wins: You Deserve It!
Paying off debt is hard work, and you should celebrate each milestone along the way. Whether you pay off a credit card or get your emergency fund fully funded, take a moment to acknowledge your progress and celebrate your wins.
Treat yourself to a nice dinner or splurge on a small luxury that you’ve been eyeing. Just make sure to budget for it and don’t go overboard. Celebrating your wins can help you stay motivated and focused on your goal of being debt-free.
Concluding Paying Off Debt After 50
It may seem like a daunting task but the sooner you begin the better you will feel. With the right mindset and approach. Organize your debt, decide on a payment strategy, create a family budget and stick to it, figure out how you can earn more and spend less, and celebrate your wins along the way.
Remember that staying out of debt requires a long-term commitment to financial responsibility. But with dedication, hard work, and a positive attitude, you can achieve financial freedom and live your best life. So take the first step today and start paying off your debt!