When it comes to financial security, Baby Boomers are somewhat of a mystery. On the one hand, we are often called “the richest generation of all time.” On the other hand, even after decades in the workforce, we still carry the second-highest level of debt of any generation ($95,095 per person), second only to Gen X ($134,323.)

To make matters worse, unlike members of the Millennial and Gen X generations, we don’t have long to correct the situation before retirement hits us like a ton of bricks.

Simply put, if we want to get the most from retirement, we need to get serious about paying our debt off fast.

I Paid Off $150,000 in Debt in 10 Years… and You Can Too!

So, what makes me qualified to tell my fellow Baby Boomers how to pay off debt fast in the years leading up to retirement? I’m not a financial expert. I don’t have a bunch of 3-letter acronyms in front of my name. And, therefore, nothing in this article should be considered financial advice.

On the other hand, unlike many of the talking heads that you see on TV, I have actually paid off $150,000 in debt. I refused to declare bankruptcy and took the hard steps necessary to rebuild my financial life. I also started several successful businesses in my 60s.

So, first, I’ll share why your 50s and 60s may actually be the easiest time to pay down your debt. Then, I’ll walk you through the exact steps that I used to pay off my own mountain of debt.

It wasn’t easy, but I hope that I can make your path a bit smoother than mine was.

Getting Out of Debt Starts with a Commitment to Change

As someone who has dealt with her share of debt over the years, I can personally relate to the many women in our community who may be struggling with this issue. Debt is not only harmful because of the direct impact that it has on our finances. It is also a major driver of anxiety, just at a time when we should be getting the most from life.

Debt Creates Anxiety and Prevents You from Being Productive

One of the less obvious, but no less destructive, side-effects of debt is that it prevents us from being productive. There is a certain irony here. One of the best ways to pay down your debt and get on the road to financial security is to increase your income, even if only temporarily.

Unfortunately, when we are stressed, our bodies and minds are often too distracted to think rationally about what we can do to earn extra money. The more we worry about our debt, the more worried we become. The more worried we become, the less likely we are to focus on income-generating activities.

The only way out of this loop is to take control of your debt and create a plan for paying it off over time.

Debt Is Often Symptomatic of a Negative Relationship with Money

There are times when taking on debt is unavoidable. Perhaps we are dealing with an illness in the family. Or maybe we need the money for an emergency. But, as hard as it is to admit it, most of the time, debt is simply a manifestation of our own relationship with money.

Entering retirement forces us to rethink every aspect of our financial situation. If we want to make money, we need to learn how to work for ourselves. In order to balance our budget, we are often forced to abandon luxuries that we once considered essentials.

Dealing with our debt offers us an opportunity to examine our relationship with money and to develop healthier habits.

You Have a Lot on Your Side

Many of us are surprised to find that we still have debt by the time we reach our 50s and 60s. And it’s not just credit card debt that haunts us.

According to the Guardian life insurance company, student debt among Baby Boomers grew 72% over the last 5 years. That’s more than any other generation due, in part, to our willingness to co-sign on our children’s (and grandchildren’s) loans.

There is one silver lining to being in debt in your 50s and 60s, however. For several reasons, this may actually be the easiest time in your life to pay down debt. Here are a few reasons.

First, our 50s and 60s tend to be our peak earning years. And, with our kids (for the most part) out of the house, many of us have more cash left over at the end of the month than at other times in our lives.

Whether to put this money into our retirement accounts depends on many factors – such as the expected return of our investments vs the interest rate that we are paying to service our debt.

But the main point here remains. Now is a great time to pay off your debt.

Second, as an older adult, you actually have more leverage than at other points of your life when it comes to negotiating your debt. Why? Because the banks know that once you reach retirement age and have to start living on a fixed income, their chances of getting their money back decrease significantly. Getting less now may be better than risking getting nothing tomorrow.

So, if you are ready to deal with your debt in your 50s or 60s, stay positive! You are in a stronger position than you think!

​​Don’t Panic – Assess the Situation Calmly

Take a deep breath and assess your financial situation. Write down all the money you owe and be honest with yourself. Ask yourself “what’s the worst that can happen” (Hint: It’s usually not as bad as you fear.) and keep reminding yourself that learning how to deal with debt is important but not worth making yourself sick.

Here’s the approach that I used to pay off my debt.

Step 1: Just the Facts Ma’am

The most important (and hardest) step in paying off your debt simply involves gathering all of the necessary data. Why is this so hard? Because writing down how much you owe will force you to face your problems head-on.

Trust me when I say that I know how hard it is to be honest with yourself about your financial situation. I ignored my own debts for years… and ended up paying thousands more than I should have.

For as long as you are just blindly paying the monthly minimums on your credit cards and other sources of debt, you can pretend that everything is ok.

Don’t allow the little pain-avoiding magician in your head to say, “Pay no attention to the man behind the curtain!” Take control today.

There are plenty of fancy tools (some free and some paid) that can help you to organize and track your debts – Undebt.it, Unbury.me and Mint spring to mind. But the truth is that, unless your situation is especially complicated, you can usually create a plan in Excel… or even on a good old-fashioned piece of paper.

Before you call your lenders, create a table like the following to keep track of the amounts that you owe, the APR (interest rate), and minimum monthly payment:

Creditor	Amount owed	APR	Min monthly payment

Then, when you are ready, it’s time to get on the phone with your banks, credit card companies, and other lenders. Ask them how much you owe, the APR, and the monthly minimum. It’s that simple.

Step 2: Choose a Plan: Snowball or Avalanche

Once you have a good understanding of how much you owe and to whom, it’s time to pick a strategy to start paying off your debt. And, at the end of the day, there are two main approaches to choose from – the “Snowball” and the “Avalanche.”

With the “Snowball” strategy, you would choose to pay off the debt source with the lowest total amount due first. The goal here is to start creating psychological momentum… to get some “wins” so that you are motivated to keep going with your debt-reduction plan.

With the “Avalanche” strategy, you would choose to pay down the debt source with the highest APR first. The goal here is to focus on the highest-interest debt source in order to free up cash as quickly as possible to further reduce your debt.

For example, let’s assume that you had the following debt profile:

Creditor	Amount owed	APR	Min monthly payment
ABC Bank	$2,000	7%	$140
Other Bank	$4,000	5.9%	$210
XYZ Credit Card	$5,500	14%	$250

With the “Snowball” approach, you would start paying down the loan from ABC Bank first since the amount owed ($2,000) is less than the other two debt sources. Note that the interest rate for ABC Bank (7%) is less than that of XYZ Credit Card (14%)

With the “Avalanche” approach, you would start paying down the loan from XYZ Credit Card first since the interest rate (14%) is higher than the next highest with ABC Bank (7%).

There are benefits and costs to both approaches and, since everyone’s situation is different, it makes sense to discuss which strategy is best for you with a financial advisor. But, at the end of the day, both approaches can work, if followed closely.

Step 3: Negotiate Your Way to a Debt Free Life

What follows is definitely not financial advice. These techniques worked for me, but this doesn’t mean that they are appropriate for your situation. That said, here are a few of the strategies that I used.

Offering a Lump Sum Payment

When I received a scary letter from a debt collection agency, my son stepped in to help. The amount that I owed was $8,000, and my son offered to loan me $5,000 towards the total. I decided that I would go a step further and simply offer the collection agency $5,000.

I was honest with them. I told them that I simply couldn’t afford to pay back the full amount, but that a family member had offered to help. I asked them if they would accept $5,000 to close the account completely… and, to my surprise, they said yes.

Will this work in all situations? Of course not. But, if you do end up with a little extra cash, what’s the harm in asking?

Talk to Your Creditors to Find Mutually Beneficial Solutions

Creditors want their money. You can be sure that they will make this clear at the beginning of every conversation. However, if you call them first and simply say, “I cannot afford to pay this bill, so what solution can we find together?” you often get a very different response.

Learn how to negotiate with creditors since they often offer hardship programs or special payment plans that can be arranged. Many times, you can even negotiate a reduced amount if the debt is excessive.

It never hurts to connect with the customer service representative as a human being – chances are they have faced similar situations before by working with other customers, so they will understand. Be calm and constructive. Say that you are not trying to avoid payment and that you are taking responsibility for the situation. You just need a little extra time to pay the debt.

Simply Asking for a Reduction (Especially for Credit Card Interest Rates)

Sometimes, all it takes is the threat to pay off your balance with a new credit card that has a lower interest rate to get your bank to change their tune.

Be Friendly

In the movies, negotiations are battles of will. Each participant stands on his side of the ring and throws punches until the other side gives in. Negotiations in real life are seldom like this – although it may feel this way if you are on the wrong side of a debt collection call.

The women over 60 that I talked to said that they had much more luck by being friendly and kind than by shouting. Don’t forget, everyone that you talk to has a grandmother. They may be incentivized to get the best deal for their company, but they are still people.

Be firm and honest about your situation. Be willing to push back if you think that you can’t afford a particular “solution” that is being offered. But also be friendly and make them understand that you are a real person and that you are trying to solve a problem with them.

Be Honest

Many people over 60 have trouble admitting that they have financial problems. Others feel that it is their “duty” to pay their debts, even if they can’t afford to. This is all well and good, but, as I mentioned before, nobody wins when you are struggling to make ends meet.

To be clear, you should never lie to your creditors. At the same time, you shouldn’t make your situation seem any rosier than it is. Be honest about how much money you have after paying for essentials each month. Explain that you are no longer working and that your financial situation has changed.

You would be surprised how many people are able to negotiate lower interest rates, or even reductions in their debt, just by being honest. Obviously, everyone’s situation is different, and there are no guarantees in life, but, when it comes to negotiating your debts in retirement, honesty really is the best policy!

Be Persistent

Renegotiating your debt in retirement is possible, but this doesn’t mean that it is fast or easy. In fact, I know women in the community who have been working on negotiating with their creditors for years.

Part of the challenge is that it may take several attempts to find someone who can help you. Don’t feel like the answer you get from the first person that you speak with is final. If you aren’t making progress, ask to speak to a supervisor.

If all else fails, politely end the conversation and call back another day. It may feel like everyone is operating from the same script, but they usually have more discretion than they would like you to believe.

Don’t put too much pressure on yourself to solve your debt problems overnight. Try to see this as a long-term process that will need to be solved collaboratively.

Be Collaborative

One of the reasons that people think that negotiating is stressful is that they go into it with an adversarial mindset. They imagine that there is a fixed pie on the table and that it is up to them to take as much of it as they can.

If you are in a super-strong negotiating position, pushing the other party around can work. Negotiating your debts is seldom so simple.

Several women told me they felt that the single biggest reason they were able to reduce their debts was that they approached the problem collaboratively. They explained the situation and then asked for the person on the other end of the line to help to figure out a solution together.

Keep in mind that just because a “solution” is collaborative, it doesn’t mean that it is “fair” or even “workable.” There is absolutely no rule that you need to accept the first offer. Feel free to use time to your advantage. That said, you have more to gain than lose when you bring someone to your side of the table.

Step 4: How to Stay Out of Debt (for Good!)

Once you have a plan in place to pay off your loans, how do you stop your debt pile from growing?

Well, if the main source of your debt is credit cards, then the answer is simple… cut them up (or freeze them if you need them for emergencies). But you already knew that!

In my experience, however, it’s not consumerism that gets older adults into (new) debt. It’s the desire to help other people.

Once again, I’m not judging. I have helped both of my sons when they fell on tough times. I paid for my kids’ education. And I still put money aside for my grandkids.

All I am saying is that each and every one of us has the right to be financially free. Just like the emergency video on an airplane will tell you to “put your own mask on before helping others,” we need to apply this same approach to our financial lives.

The key here is to be honest with yourself and your family… honest about your debt triggers, financial resources, and goals for the future. Otherwise, you risk playing the role of “grandma piggy bank” until you have nothing more to give.

Track Your Expenses

Before you make a plan to get out of debt, it helps to find out exactly where all of your money is going. Use a free online tool like Mint.com to track your monthly spending, and then make adjustments accordingly. Chances are you can find an extra $100-$200 per month to redirect toward paying off your debt.

Look for Ways to Make Extra Money

Of course, cutting costs is only part of the solution to getting out of debt. The process will go a lot more quickly if you are able to increase your income, while you reduce your costs. Finding a job after 60 can be challenging, but there are several things that you can do to take control of the situation.

Some years ago, I sat down to talk with Nancy Collamer to discuss what women over 60 can do to make money from their passions in retirement. Her advice still rings true today. There are also numerous part-time opportunities available, including becoming a freelance writer.

Save Money While Paying Down Debt

While you’re paying off debt, it’s often encouraging and empowering to save a special pot of money at the same time. For example, you could set a goal, saying, “As soon as this $5,000 credit card debt is paid off, I’m going to spend $1,000 on a nice vacation.”

But instead of putting that $1,000-trip on your credit card, save up the money in a separate account – and then you can have the satisfaction of spending cash instead of racking up more debt.

Don’t Give Up!

No matter where you are on your financial journey, don’t give up! I am living proof that it is possible to pay off almost any amount of debt… at any age!

The most important thing is to take action. Don’t wait another day. You are strong! You can do this!

Why do you think so many older adults are still in debt? What advice would you give to the other people in our community who are trying to get debt-free? Let’s have a conversation!