4 Signs You’re Headed to Financial Trouble

Many seniors live on a fixed income in their retirement years, but it can be difficult to maintain with the rising cost of living. To prevent yourself from going deep into financial trouble, it can help to recognize the signs of impending financial hardship before it is too late.

1. You have little or no emergency funds.
   • It is highly recommended that retirees on a fixed income have at least a year’s worth of savings for emergency. As you navigate through retirement or living on a fixed income, if you find yourself living paycheck to paycheck with very little room for emergencies, or to create maintain an emergency fund, then you may find yourself in trouble. To prevent you from going over your means when an emergency arises, you should have an emergency fund ready. Emergencies can range anywhere from health related, disaster related or even an unexpected car repair.  However, if you do not have an emergency savings, or you are struggling to save some cash every month to put into the emergency savings, then it’s a sign you may be going through some financial hardship.
2. You’re paying your bills and basic needs with a credit card.
   • Ideally, credit cards are used to emergencies and you should pay more than the minimum requirement every billing period. But if you are finding yourself to be using your credit card to pay for things such as groceries, gas, or any of your other bills – then it may become problematic. If you are using your credit card to pay for your bills, it just becomes a cycle of moving one debt to another that you may find difficult to get out of, especially with the high interest rates often associated with credit cards.
3. You’re having difficulty keeping up with your bills.
   • Choosing between which bills you should pay, and which you should forgo for the month can be a red flag for financial problems. If you find yourself in a situation where you feel compelled to choose between paying the electricity bill or for medications, then it is time to look for some help! Also, it does not help that late fees would hinder your ability to save money.
4. You need to ask family members or friends for a loan to help pay for expenses.
   • The last thing that most people want to do is to ask others for a loan to help cover a bill or another needed expense and it is usually a sign that you are financially in trouble and may be in over your head. Instead of looking to your family and friends for a loan, look to them for guidance in getting you out of the situation you are in.

For homeowners who are at least 62 years of age, a reverse mortgage may be a solution to help prevent or get them out of financial trouble. With reverse mortgages, borrowers are able to use their funds to help pay bills, necessities, home repairs or even to set up an emergency fund. To learn more about this great product, contact a Senior Advisor at 1-888-808-8486.

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