Seniors Should Save For A Rainy Day

It was Benjamin Franklin who said, “We get old too soon and wise too late.”

This is particularly true where money matters are concerned, says Dean Prentice, senior vice-president of MNP Ltd, a firm which helps steer people from financial ruin by providing them customized insight into their options. 

“Seniors who go into their old age with little or no savings can encounter health problems or unexpected emergencies, leaving them to be the most vulnerable to financial woes” said Prentice.

“In a recent survey, we heard that 74 per cent of Canadians don’t have the savings or money to cover emergencies. We’ve had seniors come in carrying a debt load who can’t even afford the things they need, such as medications or nutritious food. When a senior finds themselves in this situation, it is a good time to consider talking to a Trustee about a proposal to creditors that will allow them to get back on track and move forward with their lives.”

A Consumer Proposal is preferable to seniors having to struggle daily to make ends meet in their golden years or worse, being forced to file for bankruptcy and risk losing the assets they have worked so hard to build.

“Bankruptcies have decreased slightly [in Prince George] while Consumer Proposals have increased,” Prentice told the Free Press on Tuesday. The statistics that support this statement, can be found in statistics from  2013 which show 156 consumer bankruptcies and 87 Consumer Proposals. In 2014, there were 149 consumer bankruptcies and 100 Consumer Proposals. 

Anyone, no matter what age, can find themselves overwhelmed by debt, but there are several ways to avoid overspending and common pitfalls such as high interest rate credit card debt that can land people in hot water, he said.

“It’s best to have a rainy-day fund, so when unexpected expenses arise, there are funds  set aside to cover it and therefore  no need 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 forth, and a third account for irregular expenses such as medical, dental or optometrist bills.”

It’s also important to try to save for things like Christmas — not just for gifts, but travel and other related costs for the holiday to reduce the likelihood of overspending.

With the just lowered bank interest rate, Prentice said people may feel the urge to borrow more and spend more. 

 “Especially with 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 proud and may not want to talk about their financial problems — but there are lots of places that offer credit counselling and will try to work out tailored solutions that allow them to manage their debt while enjoying retirement.”