Yahoo Finance This 60-year-old grandma has $30,000 in credit card debt and $700 in savings — her plan for financial recovery
Many Americans struggle to save for retirement. Some are even approaching retirement age with a large pile of debt instead of assets.
Marva, a 60-year-old grandmother, seems to be in that unfortunate position. On a January episode of finance YouTuber Anthony O’Neil’s “The Table” podcast, she expressed regrets about not saving money earlier and approaching her senior years with a mountain of credit card debt.
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Fortunately, O’Neil believes there’s a path to recovery.
“At 60 I want you to have freedom.” he told Marva. “I want you to have abundance, you know, I want you to enjoy life.”
Seniors in debt
The share of American seniors with credit card debt has risen over the past 30 years, according to the Federal Reserve’s latest Survey of Consumer Finances. As of 2022, around 34% of those aged 65-74 and 30% of those 75-plus had credit card debt, compared to 27% and 10%, respectively, in 1989.
The median credit card balance for those aged 65 to 74 in 2022 was around $3,500, while for those 75-plus it was $1,700.
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Marva, on the other hand, has a credit card balance of around $30,000, O’Neil estimates, and only works part-time, earning about $41,000 a year with approximately $2,000 in monthly expenses.
With only $700 in savings (plus a 401(k) through her employer), Marva’s financial safety net is worryingly thin. To salvage her situation, Marva says she has considered approaching a debt consolidation firm to help with all of her outstanding debts — which includes an auto loan — but O’Neil had a different idea.
Snowballing out of liabilities
“You’re not going to pay any company to help you eliminate your debt,” O’Neil told Marva. “I 110% disagree with consolidation companies. Because what you’re doing is you’re paying them to do what you can do.”
Instead of consolidating her debt, O’Neil recommends applying the snowball method to pay it off. This method involves paying off debt from smallest to largest, which can help build momentum and offers quick and easy wins.
Based on Marva’s annual earnings and expenses, O’Neil estimates it won’t take long for her to be debt-free, possibly within a year, especially if she boosts her income by working more hours or restricts her spending further.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
