As a senior citizen, living on a fixed income can be stressful, especially when unexpected expenses come up that can derail your best financial plans for the month or year. This happens to far too many of our senior population. The National Council on Aging estimates that 1 in every 3 Americans, 65 and over, experiences financial difficulties that make them unable to pay for essential expenses of life, including food, housing and healthcare. As our population becomes increasingly older, this number will only climb. Whether you believe you have the skills to weather a financial hardship, or that you are nearly at financial hardship, taking time to learn fundamental money management strategies can help.
Understanding Your Expenditures
While it may seem rudimentary, the most important part of any financial plan is having a solid understanding of your expenditures , in relation to your income. Developing a simple budget that identifies where your money must go each month, will help you to determine what kind of a buffer you can build against financial difficulties.
If you are approaching retirement, the best thing you can do for yourself is to pay off debts . Also avoid taking on any new obligations, particularly if it means tapping into your home’s equity. Once you are retired, avoid taking on new debt, unless it is an absolute emergency. Before debt becomes overwhelming, consider talking with a professional credit counselor about how to manage your debt. To reduce the potential for scams, choose a counselor from the National Foundation for Credit Counseling.
Avoid Snap Decision Making
Financial decisions can often become so overwhelming that you may be inclined to simply have the decision made. This is a dangerous tactic that can get you into more financial trouble eventually. Taking the time to sit down and think logically and deliberately about the problems and potential solutions is the strongest course of action. This strategy can also help you avoid unscrupulous characters who may try to take advantage of your situation.
Maintaining a healthy lifestyle can reduce healthcare costs . Heart disease, diabetes and other chronic health issues increase healthcare costs dramatically. Ensuring that you get proper exercise and a healthy diet can reduce the number of medical visits and prescription costs.
Living on a fixed income need not mean living in a state of perpetual stress. Taking the time to learn about financial management and ways to reduce expenses, can reduce anxiety in your golden years.
References: National Council on Aging Statistics (6/2017) https://www.ncoa.org/economic-security/money-management/budgeting/you-gave-now-save-benefits-for-seniors/
6 Money Management Tips for Seniors (1/3/2017) https://www.newsmax.com/FastFeatures/money-management-tips-seniors/2017/01/03/id/766563/
Centers for Disease Control Legislator Policy Brief (8/2007) https://www.giaging.org/documents/CDC_Healthy_States_Initiative.pdf