6 Budgeting Tips for Seniors on a Fixed Income Who Want to Live It Up in Their Golden Years
If you recently entered retirement, you may be taking a second look at your finances and wondering whether you’ll actually be able to afford the retirement you always dreamed of. Whether you’re a planner or whether you fly by the seat of your pants, unexpected financial constraints are a common issue among retirees. Fortunately, seniors on a fixed income can still enjoy their golden years by practicing careful budgeting. No matter where you’re planning to retire, these six tips could help.
1. Work With a Financial Advisor
As people age, their financial needs and responsibilities change. For many seniors, this can be a difficult adjustment to make. Fortunately, a financial advisor can provide the guidance and support that seniors need to navigate these new challenges. A wealth manager can help seniors assess their current financial situation, develop a retirement plan, and choose investment strategies that are appropriate for their goals.
2. Learn to Budget on a Fixed Income
The first step to healthy finances in retirement is learning to budget carefully. This is especially crucial when you’re on a fixed income from retirement accounts, pensions, or Social Security payouts.
To keep your finances as stable as possible, list out your typical monthly expenses and look for areas where you may want or need to cut back. Additionally, check that your current funds can cover expenses for your expected number of years in retirement.
3. Find Creative Ways to Save Money and Enjoy Yourself on the Cheap
According to one study, the typical retiree spends about $205 per month on entertainment. If that kind of spending just isn’t in your budget, rest assured there are creative ways you can enjoy yourself on the cheap. Save on entertainment by:
- Getting a library card
- Attending local community college classes or lectures
- Using a podcast or audiobook subscription service
- Spending more time outdoors
4. Supplement Your Retirement Income by Opening Your Own Business
If your fixed retirement income just isn’t enough or if you want a financial safety net, you may be interested in starting your own business. In addition to finding part-time work, this is one way to earn extra income and get out of the house. In fact, operating a company could provide opportunities to expand your social life and ensure you stay mentally and physically well.
You can open the business you’ve always dreamed of or take on a new adventure. Some potentially profitable ideas include starting a consulting agency, an arts-and-crafts business, a baking shop, or a tutoring operation.
5. Get Rid of Credit Card Debt and Other Financial Burdens Weighing You Down
If you retire while still carrying debt, such as car loans, credit card debt, or even home mortgages, paying that debt off soon could free up crucial budget space. Work towards eliminating those financial burdens. Break this up into baby steps by:
- Prioritizing higher-interest debt first
- Always making essential bill payments on time
- Negotiating better rates with your lenders
- Cutting back elsewhere to pay the debt off faster
6. Consider Downsizing Your House to Move Into Your Ideal Retirement Location
Finally, downsizing provides an opportunity to save money on home expenses and move to a dream location. For instance, you could trade your single-family home for a beach condo. Benefits of downsizing include:
- Less time and energy spent on cleaning
- Lower maintenance and utility bills
- Potentially less clutter in the house
For many seniors on a fixed income, living the good life in retirement may seem like a stretch. Fortunately, a little budgeting can make enjoying your golden years affordable. Use these tips to ensure you have your dream retirement without draining your bank accounts.
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