What You Really Need in 2025

There is no good time to carry expensive credit card debt. But to be paying interest of more than 20% on unpaid credit card balances in retirement seems especially hard. When your goal is to live comfortably off of fixed-income sources—savings, Social Security, and perhaps a pension—having such expensive debt can be a heavy burden.

That’s why I was so frustrated to see the news that among retirees with debt, more than two-thirds said they had credit card debt, a big increase from prior years.

If you are nearing or in retirement, and find yourself carrying credit card debt, I hope you will revisit one of my keys to financial security: focusing on needs vs. wants. This is just as true if you are 65 as when you are 25 and trying to figure out how to live within your means for the first time.

And I have an added twist: for every spending item that is a need, I am going to ask you to consider if you actually need to spend as much as you are currently spending.

Let’s start with the basic need vs. want exercise. I want you to label every line item on your credit card bill and every debit from your checking account as a need or a want.

Add up the weekly or monthly costs of your wants. You are plenty experienced at this, so you know the assignment: Ask yourself if you could eliminate those wants, if only temporarily. Or maybe cut the amount spent on those wants by 50%. The goal, of course, is to reduce your spending so you have more money to put toward paying down your expensive credit card balance.

And going forward whenever you are about to spend money, do a quick mental run-through of whether it is a need or a want. My preference, given that it is credit card debt, is that you don’t spend more on wants. But at a minimum, I hope it will encourage you to spend as little as possible on the wants.

I think as you age, it can also be helpful to push yourself to explore what you consider a need. Just because you needed two cars when you both were working and raising kids, might you be able to manage just fine with one car for the house? Just because you needed to keep your wardrobe fresh when you were working, do you really need to spend as much as you do now on new clothes?

I appreciate this may take some effort. But it should be an effort that makes you feel better. You deserve to feel financially secure in retirement. Carrying expensive credit card debt makes that hard to achieve. Revisiting my “need vs. want” approach to spending is a great way to make progress on getting out of credit card debt.