Easy Tips for Widows to Manage Debt Effectively

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Short and Sweet Summary: While it’s normal to have some debt (like a mortgage), pretending other debt (like a high-interest credit card) doesn’t exist is not. Here are a few simple tips for widows to manage debt effectively that don’t require an econ degree or a stellar math background. Just a systematic approach that anyone can follow.
If grief isn’t enough to handle for the average widow, the burden of debts, big or small, can often add to an already overwhelming life. Granted, there are “good debts” like home mortgage, starting a business, or other suitable investments. But the bad debts, like high-interest credit cards are what you want to keep an eye on.
Debts can hurt your credit history when you owe money on credit cards, pay bills late, skip payments, or don’t pay the minimum amount due.
Regardless of the amount and purpose, effectively managing debt needs an organized approach. Here are a few simple tips for widows to manage debt effectively. You don’t need an econ degree or even be great at math to follow a systematic approach to debt management.
Anyone can do this. Even if it feels scary, it’s still doable. You just have to decide to get the debt under control.
Keep in mind though, if you’re in WAY over your head and need immediate help with credit card debt, student loan debt or back taxes, Debt.com can help guide you through your options. Debt.com is a referral agency that connects financial service providers with consumers to help with consumer education and professional solutions.
Keep Track of Your Debts
Taking inventory of all your debts is the first step in placing debt priority #1 in your list of to-do’s. The only way you’ll see the bigger picture is to write it all down. Start making lists of any outstanding debt, including credit card balances, mortgages, personal loans, car loans, student loans, or other obligations.
Your list should include the following details:
- Creditor’s name
- The total amount of debt
- Due date
- Monthly payment amount
- Interest rate
Once you’ve created this list, keep updating it regularly with each subsequent bill payment or once every few months.
This helps you prioritize all your debts and plan your monthly expenses accordingly.
I include a Debt Payment Tracker in addition to other financial worksheets in The Ultimate Survival Guide for Widows online course.
Debt-to-Income Ratio (DTI)
After summarizing your debts, you can calculate your DTI based on your income. It will tell you how much of your income goes towards debt payments.
To find your DTI, divide your total monthly debt payment by your monthly income. Then, multiply the resulting number by 100.
The lower the DTI, the better. Keeping track of it helps you understand your finances better.
Make Timely Payments
When you cannot meet your payment deadline, you incur late fees. Ooohh…late fees are bad. They are an unnecessary expense that keeps piling up on top of other expense. Even worse, missing two payments in a row could dramatically increase your interest rates and finance charges.
It’s essential to create a payment schedule to pay specific bills on a particular day every month. You can use your computer or even your smartphone to set payment reminders a few days before the due date. This might be one of the best tips for widows to manage debt because it’s the easiest.
I’ve set up my credit card alerts to either email or text me reminders that I have a payment due. In one instance, I paid a credit card bill, but the credit card company transposed the numbers when they cashed it, so it looked like I didn’t make a full payment. I thought it was odd that I received a payment due text for that particular credit card because I don’t use that card very often and I knew I didn’t have any additional charges on it. But after I received the text and investigated the charges, I noticed the error of my last payment. Setting up payment alerts can benefit you in more ways than one.
If you miss a payment, avoid waiting until the next due date to send it in. The best bet is to send it in right away.
An excellent solution is to provide standing instructions to your bank to auto-debit your monthly bill payments from your bank account. This way, you’ll never miss a payment.
But only use this option only if you have enough money in your account to avoid overdraft fees.
Minimum Payments
While it’s best to make full monthly payments on time, there could be times when you’re unable to do so. If that’s the case, try to make at least the minimum payment due. A little is better than nothing at all.
On the flip side, if you find yourself with a bit of extra cash, it doesn’t hurt to pay more than the monthly minimum. This helps you avoid higher interest rates and fees. It also helps pay down your debt faster and improve your credit score.
Consolidate Debt
Debts consolidation is a convenient way to manage debt. It’s especially beneficial for high-interest debts.
A debt consolidation loan is a type of debt refinancing, where a low-interest loan helps pay off all existing debts. Once you’ve cleared your obligations, your singular debt becomes easier to keep track since you’ll have only one payment and a predictable interest rate each month.
Another way to consolidate debts is by using a balance-transfer credit card at 0% interest for a fixed period. This lets you transfer your existing balances at a nominal fee and pay off debts interest-free.
Prioritize High-interest Debts
High-interest debts eat up a good chunk out of your monthly income. Prioritizing the payment of high-interest debts is a popular debt management strategy because the sooner you pay it off, the more money you free up for yourself.
If you have multiple monthly bills, it makes sense to pay off the ones with higher interest rates and fees, because this reduces how much money you owe in the long run. This is an important tip for widows to manage debt because you could then handle your other lower-interest debt by paying just the minimum dues.
When you find that most of your debt is in the same interest rate range, it’s best to prioritize the one that’s approaching the maximum credit limit.
Curb Your Expenditure
While one can’t avoid debts for the essentials like mortgage and medical bills, there are other debts you should avoid.
Look at your bank and credit card statements to analyze any variable expenses you could eliminate. For example, entertainment, dining out, and memberships you don’t really use lead to spending splurges that could hamper debt management.
Once you curb your expenses, you’ll free up the option to save money for a rainy day. If you’re living paycheck-to-paycheck, you’re only one emergency or unexpected expense away from more debt. Even small regular contributions to a savings account will help cover unplanned expenses.
Create a Budget
Budgeting your expenses helps you stay clear of debt and even climb out of an existing one.
By keeping track of your income and expenses, you’ll clearly see any unnecessary spending you need to cut back on.
Create a bare-bones budget with rent, mortgage, and utility payments provisions. Setting aside everything else will help clear your debts sooner.
Seek Help When Debts Get Overwhelming
If it’s too hard to pay your debts each month, it’s probably time for you to seek help. Credit counseling agencies provide a credit counselor to help in such times and even help develop a debt management plan.
The options you could consider are debt consolidation, filing for bankruptcy, or debt settlement. For debt settlement, accredited credit counselors can help negotiate with creditors to settle your debt for lesser than how much you owe. However, this assistance isn’t free.
Negotiate or Defer
Different creditors have different guidelines, so it’s possible they may be willing to negotiate with you.
If you cannot make minimum payments on unsecured debt, you could negotiate for a less aggressive payment schedule or interest rate for your balance.
For instance, with medical debt, you could proactively seek a payment plan from your medical provider before your first payment is due. Or better yet, review all your medical invoices to determine if they overcharged you for certain items or items you didn’t even use. I had to call the billing department multiple times at the hospital where my husband had many of his procedures because I didn’t recognize a charge. Nine times out of ten, they erased the charge because it was an error on their part.
Check Your Credit Reports
Debts affect your credit scores, especially high credit card debt. When you carry a lot of debt, your credit score goes down. On the other hand, a high credit score means easier loan approvals.
Keep checking your credit report regularly. Once you’ve cleared your debts, check your credit report again to ensure it reflects a debt-free status. In case of any errors, get them corrected as soon as you identify them.
Widow Wrap Up
If your goal is to get out of debt, it starts with managing the debt so you know what’s going on and how it’s affecting your bigger financial picture.
While it’s normal to have some debt, pretending it doesn’t exist is not. Admitting that you have a debt problem is never easy. However, once you reduce or pay off your balances, you can aim to stay vigilant against incurring debt again. These tips to help widows manage will put you well on your way to a debt-free life.
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I am a widow for 5 years now. Feels like a big marker.