However, even if you are not prepared for retirement, or you lost your savings while struggling to survive during the recent pandemic or a recession, the time may still come when you will not be able to work. What will you do then? This week's guest post by Dan Hall is about how to make sure you are able to survive during those final years of your life, even if you are approaching those years with very little savings.
You may also find it helpful to also read a book such as "How to Make Your Money Last." It could be a good way to help you formulate your own plan for the future.
Money Matters: Tips For Cash-Strapped Seniors
by Dan Hall
Money can get tight quickly when you’re retired. When you are past your career years, financial woes may be much more concerning than when you could easily earn a paycheck. Thankfully, there are ways to get past the unpleasantries of dealing with a limited income. To do so, you must evaluate your situation, understand what resources are available to you, and act on ideas which can reduce your spending. Here are a few tips.
If you are falling short at the end of each month, especially if you are still working, it is time to take a hard look at your budget. This is essentially a spreadsheet or piece of paper that lists out your income and expenses. Knowing how much money you have coming in and going out can help you better define your financial goals. If you have already retired, your choices may be more limited, but you still have choices you can make.
Look through your bills to determine if you have anything which does not get paid on time each month. If so, this is a good indication that you do not have enough income to support your spending habits. Part of your budgetary evaluation should also be to determine if it is possible for you to save any extra money for an emergency.
If tracking your money and saving a portion of it is not your strong point, you may benefit from working with a financial consultant. This is a person who offers a service to help you better understand your debt, income, and budget. You may also want to contact your credit card company to see if they can refer you to a free financial service to help you with budgeting. They would rather help you get back on track financially than see you default on your credit cards and other bills or, worse for them, have you file bankruptcy. The financial consultant can help you determine where you can cut your expenses.
Cutting expenses may not be enough, however, to help you balance your budget. You may also need to find additional sources of income. Depending on your income and where you live, you may be eligible for additional government financial support, such as Supplemental Security Income. Your local welfare agency, Social Security office, or senior center can help you apply for and access this financial assistance. You may also be eligible for other government programs such as lower cost medical coverage through the Affordable Care Act, SNAP (food stamps), housing vouchers, disability income, and other types of assistance. If you are a veteran, talk to the Veteran's Administration to see what assistance they may be able to provide.
Once you have a handle on your incoming and outgoing money, and done what you can to lower your expenses and increase your income, you can then make better financial decisions in the future. If you find that you still need to cut costs, there are several ways to do so without sacrificing the joys of retirement.
If you own a home, start by paying off your mortgage or refinancing it, if possible. If you have been making payments on your home for a long time, you may no longer have a large mortgage, and paying off the remaining balance could be possible. If you have enough cash in the bank to pay your home off, you will not only save on mortgage interest, but that will be one less major monthly bill to pay. If you cannot afford to pay off the mortgage, you may be able to refinance it at a lower interest rate and/or for a longer term. This could make your payments more affordabl.
Another option which involves your home is moving to a smaller home in a less expensive location. If you move from a large family home to a smaller home in a less expensive area, you could save hundreds of dollars per month.
If you rent, rather than own a home, the same idea applies. See if you can find a smaller, less expensive place to live.
When you are ready to make a move, you may want to look into getting help from professional movers in your area. Ultimately, hiring movers may be worth the cost, because it is safer, especially for senior citizens, and they will save you time. Even if you have limited money, you may may be able to hire a local mover. This could prevent you from injuring yourself which, in the long run, could end up costing you more than the cost of the move.
Another option, if you do not wish to relocate, is to bring in a roommate or create an intergenerational living situation. Do you have a relative or friend who would like to help share in your living expenses? Such an arrangement could save you a significant amount of money each month, and help you get your expenses in line with your income. Another possibility is to rent out your garage, basement, or part of your home for storage. Then, you do not have to deal with another person, but you can earn a little extra income.
Aside from your living situation, you can also reduce your monthly spending by cutting back on the number of times you dine out each month. If you do decide to go for a meal, ask for a senior discount or go during the lunch hour for lighter portions and a cheaper tab. Instead of dining out with friends, plan to have dinner at home once each month with the people you are closest to. This pulls double duty by saving you money while allowing for socialization.
Look for other ways to save money. Do you have the least expensive plans to cover your cell phone, internet, cable TV and similar services? Anyone receiving government assistance may also qualify for discounts on some of these services. Do you really need a telephone land line, if you also have a cell phone? Are there streaming services which you rarely use?
In addition, look closely to see if there are ways you can reduce your monthly expenditures for electricity and other utilities. Are there less expensive ways to enjoy your favorite hobbies ... public golf courses, and free art classes at local community colleges, for example? Look for all the ways you can cut your expenses. Challenge yourself to see how much money you can save each month.
If cutting corners is not enough, and you are not eligible for government assistance, it may be time to supplement your income with a part-time job. A few great part-time jobs for seniors include bookkeeper, school bus driver, nanny, tutor, store clerk, and cashier.
Living on a fixed income does not mean you have to sacrifice your quality of life. While you may have to juggle a few things here and there, move to a less expensive housing situation, and cut costs, you may be able to make the most of the money you have. But do take the time to budget and learn all you can about money and your financial situation. Knowledge is power, and having a grasp on your finances means you can change and adapt when needed.
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