Budgeting on a fixed income can be a challenge for many older adults, particularly given the higher cost for groceries, gas and other necessary living expenses. It may seem like there’s no other way to tighten the purse springs to ensure you have the money you need each month. However, there still may be a few tricks to help you make ends meet.
Reevaluate your budget often
It’s important to create a budget to track where your money is going to ensure you meet your obligations, but it’s important to review that budget periodically so you can adjust it as needed.
“I recommend looking at and reevaluating your spending on a monthly basis,” said John Inhouse, managing director and senior market executive at Merrill Lynch Wealth Management, in Atlanta. “A clear understanding of your monthly cash flow allows you to assess where you may need to make adjustments so you’re not draining your savings.”
Use your debit card instead of credit whenever possible
By using your debit card, you are more likely to live within your means rather that accumulating debt that can be difficult to repay.
“There are all kinds of studies that show by using cash or debit instead of credit, you end up being far more in tune with how much you spend on day-to-day items,” said Kurt Mattson, CFP®, a private wealth advisor and founder of Yari Capital, Northwestern Mutual Private Client Group, in Atlanta. “People try to justify using their credit cards to get the points (or other rewards), but they end up spending far more money than they would have if they had just written a check or swiped their debit card.”
Maximize your savings with a high-yield savings account
If you have a savings account at your local brick-and-mortar bank, shop around for a high-yield savings account that will help you earn more at no cost to you. Sample interest rates for savings accounts at brick-and-mortar banks are around 0.10% to 0.20% for a regular savings account and 0.50% to 1.00% on a money market account, depending on your account balance. However, many online banks have high-yield savings accounts earning between 4.0% and 5.0% in interest. Depending on your balance, that could be quite a nice addition. For instance, if you have $10,000 in your savings account with a 4.0% interest rate, that could net you approximately $33 per month.
Seek out free entertainment
Limiting expenses doesn’t mean sitting at home all the time. There are many ways to get out and enjoy yourself without costing you a lot of money.
“Explore opportunities to enjoy your hobbies and passions without adding to your expenses,” Mattson said. “Many museums, zoos and gardens offer free admission days for seniors, allowing you to experience culture and nature at no cost. Additionally, engaging in activities like volunteering can provide a fulfilling way to spend your time, all while enriching your life and giving back to the community.”
Check into assistance programs for utilities
Many states and utility providers offer assistance programs for seniors with low incomes. Check with your local provider to see what may be available to help reduce your utility bills. The extra savings could go a long way in helping you stretch your dollars on a fixed income.
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