5 years ago, my husband and I started a journey to live financial peace and have a retirement as smooth and comfortable as possible. We took some steps to reduce debt, you can read more HERE and HERE, but today I’m sharing the 7 Money Mistakes To Avoid In Your 50s & Older!
7 Money Mistakes To Avoid In Your 50s
Live Without A Budget
After taking the Financial Peace Course with Dave Ramsey, we decided to get serious about having a budget and using it to our advantage.
That was the first step to know where our money was going, where to cut, and how to free up some money to tackle debt, which was the first step on our baby steps list.
I have a notebook and add every single transaction daily.
Here’s the notebook I use:
You can buy it HERE.
I also add the bills on the monthly schedule for the notebook, to ensure bills come first and how much is allocated to groceries and other needs each week, since my husband and I receive payments all month long.
It’s important to get organized so you don’t fall for the credit card trap, that you are going to use it and pay it back later….which most of us never do!
Delay Paying Off Debt
We started doing minimum payments and sending more to the smaller debt, which is what the financial peace suggests, calling it a Debt Snowball Program.
After two years doing it, I was able to pay off two credit cards, but the two largest ones, just kept going up, increasing monthly payments and interest and the balance didn’t go down.
So last year I took a more aggressive approach and took a personal loan, at a smaller fixed rate and consolidated the credit card debt, which Ramsey advises you not to do.
It worked for me, since I closed the credit cards I paid off, immediately after paying them off and just kept one paid off for emergencies, which I haven’t touched.
Yes, I do have the loan payment, but my debt is going down faster, and my credit score skyrocketed to 820 points.
Mismanaging Investment Risk
Some people get overly conservative in their 50s and move too much money into cash. Others swing the opposite way and chase risky returns to make up for lost time.
Either extreme can hurt you. Make sure you educate yourself or talk to a financial planner about the best approach.
Put Others’ Financial Needs First
For many years, we paid for everything for my son and got into debt to get him through college, and he ended up not making it. He came back home, and we still have that debt.
After he came home, I decided to start cutting the things we buy for him and made sure he understood that he needed to work and pay for college if he wanted to go to another college.
No more Nike clothes, gym, extra things, he took for granted all the years we gave these to him.
All those things add up.
We not only made paying off debt a priority, but doing our best to stay out of it.
I also opened a stock market account where we invested a small amount on “safe stocks”.
My husband has a nice retirement amount, but I am looking into ways to supplement it.
Disregard Of Your Diet & Lifestyle
You are probably wondering what does health and diet have to do with money mistakes, right?
Well, if you don’t take care of your health and your diet, you will pay, a lot, when you get older, 100s of thousands of dollars in meds, treatments and still have poor quality of life.
Prioritize Other People’s Financial Needs Over Yours
A lot of people our age are currently supporting/helping their adult children! Too many to count!
While our son still lives at our home and doesn’t contribute to our expenses nor pay rent, we have as I said, decided to put our financial priorities first.
He is responsible for his bills, his car, insurance, and all his personal purchases, including college expenses, which he is doing one subject at a time.
Wait Until You’re Very Old To Enjoy Life
Why is that the most costly mistake? Because when you are really old, you might not want to be able to enjoy the trips, the life, the home, the car you’ve always dreamed of.
Balance your goals with a fun trip, a nice car, and a house in a nice location. As long as you plan and can afford it all without bringing a setback to your plan.
What do you think of The 7 Money Mistakes To Avoid In Your 50s? Or at any age, in my opinion!
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These are practical tips, i will definitely share with my family members in this stage
These are great tips! Thanks for the insight!
This is such helpful advice, especially the reminder that it’s never too late to take control of your finances. I really like the focus on budgeting and paying down debt step by step….that’s my goal. Financial peace truly starts with understanding where your money is going and making intentional choices.
Diet and lifestyle are so important and both need to be managed well as it has a knock on effect. Doctors bills are not something you want to have to worry about as they soon add up!
The point about not waiting until you’re very old to enjoy life really hit home! It’s such a good reminder that balance matters now, not just someday. And the health and diet connection to finances is something so many people overlook completely.
I always try to be careful with money. You never know what can happen in the future. I always put some back into savings and watch what I spend.
I tend to be a saver and need to spend more money. I have to take more trips.
That last tip really hits hard. I try to maintain a healthy balance of being fiscally responsible without making myself miserable. That’s getting harder these days, unfortunately.