FINANCES

SENIOR MONEY IS NEEDED ON A FIXED INCOME
Management of senior money should be done carefully
​ on a fixed income, proper  senior money management becomes imperative. While it’s nice to have extra cash in your senior years, more importantly, how you manage your  money is the real concern. Make every effort to keep yourself out of unaffordable debt. If you have taken the time to analyze your finances you know what you have to work with. Continuous impulsive spending can lead to spiraling debt. It takes some adjustment to learn to live on less in retirement. However, it can be done because you should have less expenditures.

·        Lunch (eating out)
·       Gas (to and from work) or alternate transportation
·       Dress (uniforms or changeable clothing)
·       Dry Cleaning
·       Beauty/Barber Salon visits
·       Office gifts
·       Food/drink for get togethers

These costs add up when they are done on a rather frequent basis. You may not incur all of these expenses but the point made here is that without them you are saving some, since you no longer have these costs or either they have decreased. You possibly didn’t realize how much these items were costing, but now they can give you back a little money. Just because this is true, look at ways to utilize these funds to better help you financially. This saving may help you pay a bill or place more in your savings account. Don’t get your ‘mind-set” on spending as much as you can and as often as you can. Rainy days come whether you are prepared for them or not (tires on the car need replacing, a bill falls due, the washer dies, etc.). Practice the habit of saving. No matter how small the amount may be, it provides a buffer for you. Take your spare change and put it in a container, periodically take it to the bank and deposit it in your regular savings account or a separate account you may use for splurges. Do not touch this money but a couple of times during the year. Watch your senior money grow as you make those consistent deposits.

Though you want to live comfortably, understand that this will take some discipline. Once you get accustomed to this new financial life, you will be fine. Use your senior money wisely. Pay bills on time, don’t run up your charge card as high as you can nor borrow just because you were sent an invitation to do so. All of these items are factored into your FICO score. What is fico, you ask? It is a score used by financial institutions to determine your credit worthiness. It is also used by businesses for employment, applying for utilities, cable, insurance and landlords for housing. Other items used to determine your score include:
·     
       Debt ratio to income
·       Length of credit history
·       Recent credit accounts
·       Credit mix

The credit score ranges from 300(low) to 850(high). Credit information is collected by three agencies; Equifax, Experian and Trans Union. You should at least once a year check your credit report to see what your score is and if the information collected is correct. Errors should be reported and corrected through these companies and the Better Business Bureau. Know every time there is an inquiry into your credit status it drives down your FICO score; don’t just heedlessly apply for it. Credit cards are wonderful to have and they help in managing senior money, however, caution should be exercised in using them to limit debt. According to one financial magazine, seniors carry high credit card balances. If you carry credit card balances of $5,000 and upward, you are in debt. While it is not suggested that you take your savings to wipe out this debt, it certainly is essential to work diligently to reduce this debt. Why is this important you ask? By the time you pay the interest rate on this money by just paying the minimum you would have paid one and a half to twice the amount you owed. Presently, Interest rates are rather low on most credit items, but they are still pretty significant for charge cards, ranging from 13% upwards. Enjoy life and do some of the things that interest you, but spend wisely. 

Senior money can be stretched by transferring credit balances to those bank or credit union charge card invitations which have zero interest rates for 18-21 months. This gives you an opportunity to get out of the high interest range for a period of time. You might want to consider refinancing your car or mortgage at a lower interest rate, but think carefully because if it does not save you $100.00 or more there is not much point. Instead of spending the extra money use it to make extra payments, thus driving down your debt more. Consolidating debts can also be a help if you don’t have to borrow the money to do so. However, if you have no credit in your name this might be a good way to develop credit in your name. In applying for credit, stick with reputable banks or credit unions. These fly by night companies that offer easy credit often charge outrageous interests and if you are late or miss a payment they can repossess or take you to court to get their money back. READ ALL OF THE CONTRACT AND ESPECIALLY THE FINE PRINT!  Not knowing or unawareness can be a very expensive lesson.