Gen Xers born between 1965 and 1980 have experienced their share of economic turbulence. More dual-income households, single parent families, and children of divorce exist among Gen Xers than among boomers or millennials.
And many Gen Xers say they cannot save for retirement until they have paid down their credit card debts. Here are some strategies they can use to do just that.
1. Make a Budget
Bankrate’s survey shows that Gen Xers born between 1965 and 1980 are struggling with credit card debt as one of their main money worries, although some can blame these people as irresponsible with their finances. Many Gen Xers, however, are fighting hard against serious financial challenges as they transition into middle age.
These Americans must juggle saving for retirement with paying down credit card debt; often competing priorities. As part of the so-called sandwich generation, they’re financially responsible for their own children as well as any aging parents they may care for financially – expenses can add up quickly when caring for both parties! Plus they may be in transition or have limited savings accounts available.
Gen Xers can gain the upper hand when it comes to credit card debt and start building their financial futures by creating a budget, which acts as a spending plan based on income and lifestyle goals. Budgeting can be done independently or with assistance from an expert such as a certified financial planner.
Budgeting can help you understand your spending habits and formulate an action plan to reduce credit card debt. For instance, cutting unnecessary expenses or getting another job to increase income are both options available to you. A debt management program could also consolidate all your balances into one monthly payment while working with creditors to lower interest rates and decrease penalties.
Option two would be consolidating your debt with home equity loans or personal loans to save on interest and potentially lower monthly payments. Whatever solution is chosen, it’s vital that steps be taken immediately in order to reduce impact on credit score and savings accounts in the future.
Gen Xers may not always be seen as being responsible with their finances, yet they do face unique financial hurdles that make saving for retirement difficult. Credit card debt and helping their adult children financially are two examples that may distract from savings efforts for retirement; therefore it’s crucial that these individuals take steps now to address these problems and become financially stable in order to have a secure retirement savings future.
2. Reduce Your Spending
Credit card debt can be an unnerving financial burden that results in financial stress and potentially lowers your credit score. But it is possible to get out of it if you create a plan and are committed to working on it. In order to reduce spending, first identify where all of your money goes each month so that you can identify unnecessary spending and create a budget plan to save money while paying down debts.
At any age, debt is an issue; however, Gen Xers tend to carry more debt than other generations as they near retirement age and face additional expenses related to caring for children and aging parents. Therefore, these individuals are likely more concerned about their financial future and less certain of being able to support themselves financially in the coming years than Boomers or Millennials may be.
Recent studies revealed that over half of Gen Xers felt their financial lives would never match up to that of their parents due to the added responsibilities associated with raising children and helping care for elderly parents, combined with poor job markets and stagnant wages that make financial struggles all but unmanageable.
Gen Xers shouldn’t worry too much; there is still hope. Younger members of Gen X are in their prime earning years while more senior members are entering C-suite roles – giving them plenty of time to improve their financial situation before retirement; although it won’t be easy; Gen Xers must reduce spending and consider getting another job if necessary to get out of debt and save for the future.
Credit cards can be expensive, but it is also important to keep in mind that your credit score plays a vital role in everything from loan approval and rental property applications, to utility provider checks on your report. Therefore, make every effort possible to pay off debt as quickly as possible to minimize interest charges and preserve your score.
3. Get a Second Job
Baby Boomers and Millennials tend to garner most of the headlines when it comes to financial struggles; however, Gen X may face its own unique set of problems. Born between 1965 and 1980, Gen X Americans may experience unique family, career and economic circumstances which add an additional source of stress when striving to meet financial goals. They frequently battle high credit card balances or high debt levels which prevent them from reaching retirement age with financial security.
Many in this generation are still paying off student loans and other debt from college days, while also caring for young children or aging parents, which may make focusing on work and savings more challenging. Furthermore, this group tends to overspend and get into credit card trouble more easily than previous generations.
Opting to take on another job can help increase your income and help decrease what you owe, though you should carefully weigh both its potential benefits and drawbacks before adding a second source of income. Consider factors like any possible changes to your schedule, whether or not there are opportunities in your field and any additional responsibilities they entail.
Focus on paying off major expenses to reduce debt. If you owe mortgage, car payment or any other significant bills over time, create a plan and budget accordingly. Shop around for great discounts.
Debtors need to establish and adhere to a plan in order to successfully deal with their debts. Procrastinating may tempt us, but delaying will only lead to additional interest charges and higher credit scores that make qualifying for loans more challenging in the future.
Gen X workers appreciate benefits that contribute to financial security for themselves and their employees, which can boost morale and retention rates. Consider options like flexible schedules, remote work arrangements and mentoring programs as ways to provide assistance. Gen Xers tend to value quick action and straightforward approaches without lengthy social interactions and they desire recognition for their accomplishments and efforts.
4. Consolidate Your Debt
Gen Xers have long been saddled with heavy debt loads. Even when in their prime earning years, 25 percent do not feel confident they can manage their debt effectively and 21% see no way out of it. This could be partly explained by Gen Xers juggling various financial goals at once: saving for retirement, raising children, caring for aging parents etc… and it is no wonder these young adults feel anxious about money issues.
Gen Xers may use many of the same strategies for paying off credit card debt as Gen Yers do: cutting expenses and living within your means are good ways of doing this, while sometimes people need some additional help with getting out of debt; in these instances a debt management plan may provide extra assistance by consolidating all their payments into one monthly payment and thus lowering interest rates and improving cash flow to help ease payments off balance sheet debts.
As well as credit card debt, many Generation Xers also carry student loan debt. Unfortunately, student loans typically come with high-interest rates that make repaying balances challenging in a timely fashion. Therefore, it’s vital for Gen Xers to consider consolidating their student loan debt through a debt relief company; consolidation loans can reduce monthly payments while helping you pay off student loan balances more quickly.
No matter where you stand in life’s earning cycle, it is never too late to make significant improvements to how you handle money. By following these tips and eliminating credit card debt before retirement age hits, you could reduce interest costs while protecting your credit score from being damaged while carrying debt. Contact FNBO now for debt consolidation solutions that could reduce monthly payments faster and help pay off that debt faster!