4 Ways Older Adults Can Manage Financial StressCeasar Augustus Paita
As adults age, they experience many concerns. These include declining health, cognitive decline, loss of loved ones, and today’s discussion: financial stress. Such stress often comes from the inability to pay your bills or getting scammed. And stress, as we have discussed before, has a negative impact on cognitive function. Unfortunately, memory loss makes you an easy target for scams. This can become a downward spiral with memory loss making you vulnerable to scams, inappropriate spending and confusion in financial decisions. Then the financial stress further revs up with memory issues. Criminals target seniors because they don’t have sharp memories, tricking them into paying more than they owe.
Additionally, a study on declining financial literacy in old age finds that literacy score drops by 1% every year in adults aged 81 and over. Ultimately, this means that the older a person gets, the more vulnerable they are to financial scams and stress—which is not their fault as it is a health matter. Still, there are many ways older adults can manage financial stress. Here are some tips you can try.
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Organize your financial documents
Disorganized financial records like bills and loan statements result in stress. This can keep you from paying bills on time since you can’t find the paper noting its due date. The same goes for missing loan statements.
To avoid this, you can organize your financial documents by keeping them in one place, like a binder with separate labeled compartments. This way, you won’t need to remember different places where you stored your documents. Label each compartment with big and bold letters, so you can easily read them and find what you need. Get a relative or caretaker to help if you have many papers or find it hard to write labels. This way, you won’t lose important documents and can easily find a specific paper when needed.
Prioritize saving money
Aging comes with health concerns like chronic diseases that may lead to emergency hospital trips. Some older adults avoid seeking medical attention. Over 4 out of 5 older adults are concerned with emergency care costs because they might not have enough money.
This is why you need to prioritize saving your money. If you’re still a working adult, keep a percentage of your monthly income for healthcare purposes. Should you be retired, you can separate a portion of your savings for hospital trips. Just make sure not to touch these funds and use them for any other purpose other than medical ones. This can give you the peace of mind you need when an emergency arises.
Pay your debt
Debt is another cause of financial stress. Unpaid debt can stay at the back of your mind, so it’s best to address it as soon as possible. Some wealth building tips that can help you pay your debt are to pay it immediately and utilize a debt management option like loan forbearance.
Paying your debt immediately when you get the money to do so is the most effective and straightforward way to stop debt stress. If you need assistance paying your debt, loan forbearance grants you more time to repay what you owe. Depending on what your lender agrees to, these can last a few days or months. Approval will also depend on your lender, as you must demonstrate why you’re asking for a forbearance. Older adults typically apply for this due to experiencing illness. These methods can help make debt one less thing to worry about.
Get professional help
If you’re finding it hard to manage your finances alone, you can seek professional help from a daily money manager (DMM). A DMM offers essential financial services to older adults, including paying bills, balancing checkbooks, and processing medical bills. They can also create budgets, handle insurance documents, and make bank deposits. You can find a DMM in your area using the American Association of Daily Money Managers’ site. Hiring a DMM minimizes your financial stress because they’ll get the job done for you.
Taking charge of your finances as an older adult isn’t easy. Try our tips to reduce that stress and improve how you handle your finances.
Article written by Rose Josephson