Organizing Finances in Retirement
Maintaining a strong credit score and financial framework is important at any age, but when you’re living solely on retirement income, it’s beneficial to make sure you are managing your money wisely. As a retiree, you are facing a more difficult position than working adults, because you are living on a fixed income. As a result, practicing frugality and disciplining spending is imperative to avoid falling behind on bills and suffering credit score damage.
You can make sure you’re on track and managing your spending by following a few tips listed below.
Review Your Credit Report
Your credit report will list open credit accounts in your name, as well as the condition of each account. By reviewing this information, you can determine how much is left on any loans or credit card balances, and use this information to establish a repayment plan. This information can be especially useful if you’re trying to pay down the remainder of your mortgage or refinance your home loan.
Review All Assets
It’s important that you know exactly how many resources you have before you can begin arranging your finances. Tally up your total assets, including your current income, retirement accounts, annuities and investments. You should also calculate how much you expect to receive from other sources of income each month, such as Social Security or stock dividends.
Create A Budget
Once you know how much money you’re bringing in, create a budget that will allow you to pay down outstanding debts and stay on top of your current bills. Paying off high interest credit cards may be beneficial as well because it will free up more income to devote to other spending categories. Prioritizing these payments will help you keep your credit score intact and avoid paying late charges or high interest rates down the road, both of which will take a chunk out of your income. Take advantage of tools such as budgeting spreadsheets and retirement calculators to help you plan.
Developing a financial plan and keeping your credit score healthy will allow you to enjoy your golden years without worrying about high interest debt and financial insecurity. Conduct a review of your finances every few months to make sure you’re still on track.