Benjamin Franklin said, “We get old too soon and wise too late.”
That is particularly true where money matters are concerned, says Dean Prentice, senior vice-president of MNP Ltd, a company that helps steer people from financial ruin – or if all else fails, helps them through a bankruptcy.
Seniors who go into their old age with little or no savings and then encounter health problems or unexpected emergencies can be the most vulnerable to financial woes, he said.
“In a recent survey we heard that 74 per cent of Canadians don’t have savings or money enough to cover emergencies. But we’ve had seniors come in carrying a debt load and who can’t even afford the things they need, such as medications or nutritious food. That’s when they can consider taking to a trustee about a proposal to creditors so they can get on with their lives.”
That route is preferable, he says, to seniors having to struggle daily to make ends meet in their golden years or being forced to file for bankruptcy and risking losing their assets.
“Bankruptcies have decreased slightly [in Prince George] while consumer proposals have increased,” Prentice told the Free Press on Tuesday.
The statistics that support that, he said, are that in 2013, the statistics show 156 consumer bankruptcies, 87 consumer proposals. In 2014, there were 149 consumer bankruptcies and 100 consumer proposals.
Anyone, no matter what age, can find themselves over their heads in debt but there are ways to avoid overspending and the common pitfalls such as high interest rate credit card debt that land people in hot water, he said.
“People should have a rainy-day fund so when unexpected expenses arise, they already have money to cover it and they don’t have to borrow or use credit cards to pay for it. I always recommend having three bank accounts, a chequing account for must-pay expenses such as rent or mortgage and utilities, another account for living expenses which you work out on a budget for groceries, gas, entertainment and so on, and a third account for irregular expenses such as medical, dental or optometrist bills.”
It’s important to try to save for things like Christmas – not just presents but travel and related costs for the holiday so there is little or no overspending, he said.
With the just lowered bank interest rate, Prentice said people may feel the urge to borrow more and spend more.
“This is the time to try to pay down debt,” he said, “especially debt that carries a higher interest rate. This is not a time to take on more debt, it’s a time to pay if off. Today’s seniors are of that generation when they tend to be very proud and not want to talk about their financial problems – but there are lots of places that offer credit counselling and try to work out solutions.”