Let’s say you spent the last few decades putting “enough” away for retirement but felt like you had a lot of freedom and flexibility with your spending. The cold, hard reality of a fixed income, then, can be sobering to say the least. But fear not: we’re going over six timeless budgeting tips that seniors on a fixed income can use to make the most of what they have while living their best lives.
Have a Clear Budget
Just because you’re on a fixed income doesn’t mean budgeting isn’t important. It’s actually the opposite: budget is even more useful with a more predictable income because you’re less likely to need to make surprise changes. If budgets feel too overwhelming or you’re struggling to spend within the lines, you might want to invest in a financial advisor to help.
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Record Everything
It doesn’t matter if it costs one dollar or a hundred dollars: you should be writing it down in your budget. However you decide to record your spending, you should be taking the time to mark everything down. Ignoring even just one or two purchases can cause a lot of confusion when it comes time to balance the books, so just include everything to be safe.
Be Extra Careful With Debt
Being smart about debt is a timeless budgeting tip for everyone. But we caution seniors even more so because it can snowball out of control if you aren’t careful.
We’d recommend limiting your use of credit cards, paying off any existing debt, and always making enough room in your budget for paying off your cards every month. Seniors struggling with outstanding debt may want to consider a debt consolidation loan at a lower interest rate to help them avoid taking on further debt.
Reevaluate Your Transportation Needs
Transportation costs make up a large portion of your expenses. However, they don’t necessarily need to, especially if you aren’t driving as often. Many seniors reconsider owning their cars altogether and opt for using public transportation instead. It’s not a viable budgeting strategy for everyone, but it’s still a good idea to look into this expense and see where you can make cuts.
Do Your Research Before Buying
Every dollar counts when you’re on a fixed income. We don’t recommend buying virtually anything without first comparing prices.
It’s never been easier to find the lowest prices for everything from groceries to the latest tech gadget. Spend a few more minutes looking for coupons and deals. You’ve probably always done this to some extent. Still, if we’re talking about dealing with fixed incomes, it’s essential to keep your costs within the right margins.
Have an Emergency Fund
Even with your best intentions with budgeting, emergencies happen, and they can be even more devastating for those on a fixed income.
That’s what makes emergency funds enormously valuable for retirees and seniors. It gives you a lifeline when you need it most, so don’t forget to build one. Most experts recommend one with enough to cover two to three months’ worth of living expenses.
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