2 Major Obstacles Keeping Boomers in Debt — And How To Overcome Them

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The amount of credit card debt held by Americans at the end of last year exceeded a record $1 trillion, and no age group was exempt, including baby boomers.

GOBankingRates conducted a survey of 999 adult Americans in May 2024 regarding their financial situations, and it revealed that the two main obstacles keeping boomers in debt — as indicated by roughly 41% and 30% of the age groups that included boomers respectively — were “too little income” and “too many other bills/expenses.”

Overcoming these issues can be difficult, but it’s far from impossible. Here are some suggestions on how to deal with low income and handle high expenses, along with some apps to use to balance your budget.

Dealing With Low Income

It can be hard to earn your way out of debt because you’re not generally in charge of how much money you’re paid. However, you’re not completely powerless when it comes to your income. Here are some ways you can try to boost your income to help balance your budget:

• Ask for a raise.
• Shop around for a better-paying job.
• Pick up extra hours.
• Take on an additional part-time job.
• Look for gig work, from writing or editing to petsitting.
• Sell any excess or unwanted possessions.

Any combination of these actions could push the needle to the point where your income and expenses are more balanced.

Handling High Expenses

When it comes to finding money to help you get out of debt, it might be easier to trim your expenses than to boost your income sufficiently. If you don’t have a written budget, you might be surprised at how much you’re actually spending on discretionary items that are “wants” instead of “needs.” 

Discretionary expenses that Americans commonly overspend on include eating out, streaming services and travel. If you spend most of your time traveling the world, eating at restaurants and watching every streaming service that’s available, for example, you likely have plenty of areas where you can cut back on spending. Whether your vice is specialty coffee, new cars or extravagant home furnishings, there’s likely at least some place where you’re spending more than you should. Those are the areas that you should be able to find some money to divert toward your debt payments.

Steps To Take To Balance Your Income and Spending

Balancing income and spending can seem easy in theory, but actually making it happen requires some legwork. Here are the steps you can take to get your finances in better shape:

1. Make a budget by listing all of your income and all of your expenses.
2. Label your expenses as “discretionary” or “nondiscretionary.”
3. Target reducing your discretionary expenses.

When you’ve established your budget, try to keep your expenses within recommended limits. Anything you spend in excess of these percentages may indicate that you should trim your costs in that area:

• Housing, 25%-30%
• Insurance, 10%-20%
• Food, 10%-15%
• Savings, 10%-15%
• Transportation, 10%-15%
• Utilities, 5%-10%
• Recreation, 5%-10%
• Personal, 5%-10%

For example, if you find that your housing expenditures — such as rent/mortgage, property tax, HOA fees and maintenance — run 40% of your budget, there should be space for you to reduce your costs. In some cases, this can be as simple as renting a different apartment, while in others it may involve downsizing to a smaller house or moving to a more affordable area. 

Food costs can also be reduced by eating at home and comparison shopping across your local grocery stores. 

You can lower your transportation costs by ride-sharing, taking public transportation or selling your car in favor of a more inexpensive model — factoring in ongoing maintenance as well.

While every person’s budget is unique, there’s likely somewhere you can eliminate some unwanted or unnecessary expenses in favor of paying down your debt. If not, your only other option is to generate more income, as discussed above.

Not earning enough money and/or having expenses that are too high are by far the most common financial problems that Americans have. But the solutions are fairly straightforward, even if the devil is in the details. The only way to get out of an imbalanced financial situation is to either boost your income or to trim your expenses, or both. While it can take some hard work and/or belt tightening to balance your budget, the short-term pain is well worth the long-term gain. Dedicate yourself to improving your financial situation once and for all and you’ll likely be able to develop a road map that will keep your wealth growing for the rest of your life.

Survey methodology: Data was taken from a May 2024 study conducted by GOBankingRates regarding debt and personal finances. The survey asked 999 American adults three different questions regarding debt and personal finances, and the results were broken down by age and sex. For purposes of the data above, “boomer” results were culled from age groups 55 to 64 and 65 and older.

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