New Year’s retirees want to pay off credit card debt
A new year can offer the hope of a fresh start and new opportunities for credit cards.
According to research from Edward Jones, only 10% of Americans over 65 have made and kept financial New Year’s resolutions for 2023, but 71% have made such resolutions for the fast-approaching new year.
“The new year may be a time of lifestyle decisions, but it’s also important to start the year off on the right financial footing,” said Lena Haas, director of wealth management advice and solutions at Edward Jones.
For Americans 65 and older who are making financial plans for 2024, the top three goals were paying off credit card debt (21%), opening a savings account (18%), and budgeting (8%). According to the Jones study.
Credit card debt is a problem for many Americans, and retirees aren’t the only people trying to pay off their debt. The average credit card debt for all U.S. cardholders with outstanding balances in the third quarter of 2023 was $6,993, according to Lending Tree. According to the Federal Reserve Bank of New York, Americans’ total credit card balances at the time reached an all-time high of $1.79 trillion.
“Inflation can play a role in debt management, so it’s important to pay your bills every month to avoid interest rates rising,” Haas said.
“If you have a balance, you can transfer it to a card with a lower interest rate, depending on your credit score. And if you have multiple credit cards, you can benefit from taking out a fixed-rate debt consolidation loan. After all, the lower your debt payments, the more you can invest in other retirement goals,” Haas said.
73% of Americans over 65 find budgeting most helpful in staying on track with the financial decisions they have made.
“It’s important to check in on your finances regularly to make sure you’re on track. Your spending needs may change on a yearly, monthly or weekly basis, so accounting for exactly how much you spend on your retirement income will give you a more complete picture of your current finances,” Haas said.
There are many ways to create a budget, but one way is to make a list. “Organizing your money by ‘needs,’ ‘wants,’ and ‘nice-to-haves’ can inform your daily spending habits and help you live your life according to your values. At the same time, you can achieve your savings and retirement goals. “Haas said.
Of course, not everyone makes New Year’s resolutions.
About 29% of Americans surveyed who decided not to make a financial decision in 2024 said they did so because they were comfortable with their current financial situation, Edward Jones found.
Other common reasons include not making any New Year’s resolutions at all (43%), feeling like you don’t have enough money to achieve your financial resolutions (11%), and uncertainty about your finances in 2024 (9%).
Research shows that approach-oriented goals, or things that require you to actively do, are more successful than avoidance-oriented goals. Avoidance-oriented goals involve efforts to stop a specific behavior, such as avoiding chocolate or stopping unnecessary spending.
So make a to-do list and stick to it.
