Debt is an unfortunate reality for many people, including seniors. Trying to live on a fixed income can be hard for anyone, especially seniors who may be faced with steep medical bills or the loss of a spouse. Once a senior turns to credit cards as an easy solution to a problem, the debt can quickly spiral out of control. Home Care Assistance of Placer County offers these suggestions to help aging parents manage and get out of debt.
Lower Interest Rates
One of the first things you want to do is find out the interest rate on your loved one’s cards. If your senior loved one has a good credit score, he or she might qualify for a lower interest rate. Call the credit card company and see what options are available. You might also be able to consolidate debt on a card with a low interest rate for debt transfers.
Make a Budget
It might sound like common sense, but lots of people never actually lay out a budget. You can use Excel or one of the free online budgeting programs to create a tangible budget for your senior loved one that will include everything from medicine to pet food. Once he or she sees where the money is going, they can curb unnecessary spending and allot more funds to go towards paying off debt.
A reverse mortgage converts your senior loved one’s home equity into cash and the money never needs to be paid back. The amount the homeowner gets is determined by the home’s value and the age of the owner. If the owner is 62 or older with a paid in full mortgage, they are eligible.
If your senior loved one has a permanent life insurance policy, they can get a cash-surrender loan. The policyholder can take out as much as 96% of the cash value of their policy. When strapped for cash, life insurance money can be worth more to your senior loved one now than after death.
Bankruptcy works for credit card debt, but if the debt is coming from medical bills, it will quickly return. Many seniors have a hard time psychologically going bankrupt. In these cases, a debt specialist can be helpful in recommending a program to tackle the debt instead.
Signs Your Parent is in Financial Trouble
Often, senior parents don’t want to burden their children so they hide their problems. If your aging parents like to travel or eat out frequently and stop doing those things, it’s a red flag. You might also notice they start cutting back on necessities such as medicine and food, or seem to have increased anxiety as well.
Although it may seem counter intuitive to spend money while trying to get out of debt, having an hourly or live-in caregiver in Placer County can help your senior loved one cut spending and control debt. For example, our caregivers can do the grocery shopping, meaning they can avoid expensive impulse purchases, use coupons, and purchase mostly on-sale items. Caregivers also provide companionship, so if your loved one shops out of loneliness or because there simply isn’t anything else to do, having a caregiver will curb the bad habit. Having a caregiver in the home regularly also means signs of financial trouble like excess shopping for unnecessary items or cutting back on necessities will be spotted sooner than later. For more information on caregivers in your area, call Home Care Assistance at (916) 226-3737. Our trusted Care Managers look forward to speaking with you.