Tips on Becoming a Debt-Free Family

If you're concerned about leaving your family saddled with debt after you're gone, review these 5 tips on becoming a debt-free family.
Stressed senior couple calculating their bills

Dreaming of leaving a legacy to your spouse, children, and grandchildren? If you’re swimming in debt, your dream may be at risk. With these tips, discover how to unload the debt and become a debt-free family.

Financial Freedom Starts Now

It’s a funny thing. In younger years, for many people, the focus is all on acquiring, adding, and gaining. Debt may have seemed essential to lifestyle, dreams, and goals.

As you get older, it’s all about getting that debt number to a single digit: Zero.

Financial experts are quick to remind us that debt impacts the amount available as an inheritance or legacy. If you’ve been building an empire to leave it to your heirs, this is now a top priority. Otherwise, your estate has to payout outstanding bills before any money or assets are passed on. This is why it’s so important to learn how to leave your dependent debt-free early on.

Just recall that moment of pain when the market took a nosedive in 2008. If your investments tanked, you still needed to pay your bills. Your investment woes didn’t stop debtors from collecting.

Financial freedom is about gaining peace of mind. It isn’t just for you. It is a surefire way to leave your dependents at ease and debt free.

Let’s look at 8 financial tips for seniors to get on the road to financial freedom.

1. Get Real and Make a Plan

It’s tough, right? Also, take a snapshot of your current income. What streams of income do you rely on? Do you have pensions, gig work, and Social Security?

The only way to become a debt-free family is to get real. How bad is it? The first step experts advise is taking stock. It doesn’t matter if you’ve got one card or twenty. Get them out and make an overview chart. What do you owe? What are monthly payments? What’s the interest in each one?

Once you have an overview, prioritize the order. Many advisors agree: start with paying off the debt aggressively to the card with the highest interest.

For some people, the only good debt is no zero debt. Using secured loans with low interest rates may not pose a problem for others.

2. Simplify Your Lifestyle

Did you ever go backpacking across the Alps? Or live like a monk in Japan or India? If you’ve dreamed of living simply, now is the time to adjust to live out your dream.

For many seniors, simplifying and downsizing are attractive. The added bonus is you’ll save money, have less clutter, and be happier with less. This in many ways is a recipe for feeling younger, making fresh-in-the-moment decisions, and not drowning in stuff.

Many people find that over decades, material objects have accumulated. Houses, cars, boats, clothes, jewelry, shoes, and keepsakes can take over. If this sounds familiar, you have even more incentives for simplifying your lifestyle.

Consider these options to simplify:

  • Move into a smaller house or apartment
  • Rent out the space over the garage
  • Share your house with friends or guests
  • Sell the boat, car, or RV you’re not using
  • Sell designer clothing and jewelry
  • Sell equipment you’re no longer using

Whether you stay put or travel is up to you. Whether you downsize to help your wallet or the environment is not mutually exclusive. You can do both. The surprising thing? You’ll feel lighter. You’re likely to feel younger, more active, and more open to experiencing what life is about — right here and now.

Who knew that learning how to get out of debt as a family could be so freeing?

3. Focus and Free

While you’re paying off debts, there are two strategies most advisors recommend:

Pay bills on time. This saves you from late fees and interest rate hikes.

Focus on the card with the highest interest. Direct your extra money to this card, while paying off at least the minimum balances on others.

Once you pay off this debt, continue to the next highest and the next. Don’t reduce the amount until you are out from under all the debt.

This is generally accepted as the quickest way to focus payments and achieve zero debt.

grandson and godfather having serious talk

4. Friends, Family, and Help

If you’re up to your eyeballs in debt, don’t struggle alone. Talk to your friends. Confide in your family. You’re aiming to get debt free, for your peace of mind, and to leave a legacy to your family.

Opening up and speaking honestly about your situation can be scary. But your family may be able to help you establish a budget, get a loan, or negotiate lower payments.

If you’re not comfortable with talking to them, connect with volunteers who want to help. The National Council on Aging offers hotlines for seniors. Check with the National Association of Area Agencies on Aging. There may be local assistance to help you.

5. Talk To Your Advisor

Consult your financial advisor if you’re thinking of withdrawing from a retirement fund. While this may provide immediate relief, you want to make sure it doesn’t leave you without a cushion for unexpected expenses.

An advisor should also be able to clarify any tax implications of making withdrawals from your retirement fund. They can also direct you to programs that focus on debt relief for seniors.

6. Automate Your Debt Payments

Another key method on how you can get your family out of debt is by scheduling your debt payments.

Automating your debt repayments is a simple solution that can bring you some much-needed peace of mind. By setting up automatic payments, you'll never have to worry about missing a payment or incurring any late fees. And even in months when you don't have extra cash available to pay off your debts, the automated payments will still be steadily chipping away at the balance. It's a win-win situation - no more stress and constant progress toward becoming debt-free.

7. Find Extra Sources of Income

When it comes to financial troubles, many people focus on reducing expenses, but it can also be helpful to bring in additional income. If you have the availability, consider taking on a part-time job or starting a side hustle to bring in extra funds.

In addition, think about selling items that you no longer need or renting out unused space in your home. Any extra income can make a big difference when it comes time to pay off debt and reach financial stability.

It may take some effort but adding additional income sources can be a valuable strategy for improving your finances.

8. Stay Motivated

Debt can weigh heavily on our minds and impact all areas of life, but don't let it defeat you. Keeping a positive attitude and setting small, achievable goals can keep you motivated on your journey to financial freedom. Remember to celebrate your victories, no matter how small they may seem. It's important to acknowledge your progress and give yourself credit for the hard work you've put in.

Surround yourself with supportive friends and family who will cheer you on and keep you accountable. And if things get overwhelming, don't hesitate to seek out additional support from financial professionals or therapy.

Taking control of your debt is an amazing accomplishment, so stay focused and stay motivated. You've got this!

Assistance Club Summary

The Big Idea: Yes, you can leave your dependents debt free.

With an aggressive, focused, and steady approach, you can live your life well—and unload the debt that’s been holding you back. We hope this Senior Assistance Club guide has helped you learn how to leave your dependents debt-free. Best of luck!