Credit Consolidation Tips For Senior Citizens

The sweet dreams of golden retirement days are often stung with the bitterness of debt for a major population of senior citizens. Fixed income and unmanaged credits lead to the high debts in the late retirement age that becomes a challenge to clear. Though the best way of clearing debt is to plan early about the scales of your income vs. due credits, yet at times people react late to alarms; however once one is into the mess of pending debts near retirement age, some best practices can help consolidate and overcome the liability.

  • Online tools, debt calculators and planners: It is said that troubles well understood are half overcome. There are many online credit management tools that can help you understand your correct debt values and liability; using the tools you can be informed and so plan as per the real analysis of the debt and available options.
  • Hire a Credit Counsellor:  One can look for options over internet or even through some peer groups, but it is imperative to ensure the reliability of the service provider. There are many scandalous groups who take advantage of the customer’s old age and make profits at their customer’s loss. One should always try to opt for the known and referred credit counselling service providers to avoid losses.
  • Reverse Mortgage:  This is one viable option to pay your debts.  Reverse Mortgage converts your home equity into cash, which is paid to you on monthly basis. The best feature of Reverse Mortgage is that it not required to be paid back in your life time and gives you a comfortable income flow. While you to continue living in your home and getting paid too, you won’t be able to leave the house to your family or kids. The property is to be sold off only after the demise of borrower to repay the lender.
  • Bankruptcy: Many senior citizens find it an ethical obligation to pay their debts, but at times calling oneself Bankrupt helps. But before calling for bankruptcy one should always take assistance from some credit-counselling agency to discuss and decide on the best suitable options. One has to be careful about the fact that most of the credit-counselling agencies are paid by the lenders to get the debts paid off, hence they often discourage on same even when it’s a reasonably available option.
  • Safeguard your Retirement Income: Even though you are under debt, be aware that under no circumstance is the creditor rightful to strap you off your retirement wage and savings (pension, Social Security, etc.).
  • Keep earning: If your health allows you, it is best to keep looking for options of income, if not full time then part time. A continuous source of income helps to fund your expenses and debt, and also gives you confidence to handle situations intelligently.

The newer generation can sometimes provide new ways of getting out of some sticky financial situations; after all you have supported them through their childhood, now it is time to give them opportunity to pay gratitude.

The Psychology of Budgeting – A Few Tricks to Help You Save

We all know saving money can be difficult. There are just too many temptations out there and whenever you hit the shops to buy things you actually need, there’s always something else jumping out at you, begging you to buy, buy, buy. You may think a trip to Primark is harmless enough, but before you know it you’ve been sucked in by the super-cheap prices and forked out £30 for stuff you don’t really need.

The thing is, saving is all about motivating yourself and using your willpower to reach certain targets. I find the best way to do this is to set myself incentives. If I save a certain amount of money by a certain date I can give myself a little treat. Not something expensive obviously – that defeats the whole point of saving – but just something I really want or am looking forward to.

The Psychology of Budgeting

Another great way of putting money away is to get a money jar. Whenever you’ve got silver coins in your purse or pocket, take them out and put them in the jar. You won’t miss a few 50ps each week and before you know it, you’ll have a stash of coins ready to cash. Admittedly this is a slow process, but it’s so rewarding at the end.

If I’m getting a bit disheartened with my savings efforts I start making a list of everything I spend my money on. Do it for about a fortnight and write down all your purchases. You’ll soon notice how much you waste on things you don’t really need and this’ll make you more determined not to just throw money away. I always get really annoyed when I can’t buy something I really want because I’ve frittered away my cash.

A lot of you probably struggle because you decide to save money without setting yourself any clear goals. This means it’s all too easy to convince yourself you’ve done well when really, you’re only £50 better off. Instead, set yourself a specific goal like paying off your credit card bill. That way you’ve got more of an incentive to save a certain amount and you’ll feel much more motivated. Plus, if the end of the month comes and you can’t pay off the bill you’ll feel pretty bad about your efforts – not what you want.

Finally, don’t go to the shops when you’re feeling down. Dieters will know one of the hardest times to stay away from the chocolate is when you feel a bit low and it’s the same with shopping. Buying things gives most people an emotional boost so stay well clear!

The Pitfalls of Payday Loans

Thanks to the uncertainty of the current economic climate, debt is become ever more prevalent within our society. It can be easy to fall behind with payments, and many people find themselves strapped for cash before the end of the month and their next wage.

A number of these individuals will turn to payday loans, an increasingly popular method of securing money quickly. These lenders lure in the unsuspecting with the promise of overlooking poor credit ratings and guaranteeing approval. For those desperate for capital, they seem like a godsend.

The Pitfalls of Payday Loans

Don’t be deceived – payday loans tend to be more trouble than they’re worth. Here are just a few of the things you need to be aware of if you’re considering taking one out…

High Interest Rates 

It’s not uncommon for APR rates on payday loans to top 1500 per cent, with some companies displaying rates as high as 5800 per cent. In real terms, this means that the amount of money you borrow from a payday loan company will be much lower than the amount you’re expected to pay back. If you loaned £1,000, for example, the sum you would need to repay would average around £1,250 in less than a month.

Dangerous Consequences 

Should you fail to make a repayment on time, payday loans, like all loans, will charge you even more interest plus late fees. The total that this amounts to can snowball very quickly, until you find yourself indebted to the tune of tens of thousands of pounds. Debts as substantial as this can decimate your credit rating, which will have a devastating impact on future opportunities should you wish to borrow money again.

Fraudulent Companies 

Fraud is worryingly prevalent in the payday loans market. Many people find themselves being charged a false ‘processing fee’, exacerbating their money troubles even further, or making unauthorised payments to online brokers without ever receiving an actual loan.

Damages Your Ability to Borrow Money in Future 

If you have a history of borrowing money via payday loans, you may find that some creditors – in particular, mortgage lenders – are unwilling to lend to you. Certain companies, such as GE Home Lending and Kensington Mortgage, have publicly stated that their policy is not to lend to those who have such a history, as it indicates poor money management skills.

Your Details May Be Passed on to Third Parties 

Many payday loan brokers posit themselves as lenders to entice you to hand your details over to them. However, it is common practice to pass these onto third parties, as Different Money discusses on their blog. These parties are known for making frequent calls, haranguing people to sign up for their services.

If you’re thinking of applying for a payday loan, don’t be caught unawares; make sure that you know all of the pitfalls, as well as the alternatives, before committing to anything.