(Guest post from Karen Weeks)
Many of us dream of a relaxing retirement, focused on pastimes, friends, and family. However, a fixed income typically means you need to be pretty good at managing your money, or instead of relaxing, you might feel a lot of stress. Here are a few ideas to help make every penny you have go as far as possible so that you can savor every relaxing retirement.
Know Where It Goes
It’s impossible to stretch your money if you don’t have a concrete idea where it all goes. With that in mind, creating a budget is an ideal starting point. Thankfully, it’s not hard (contrary to popular belief), and once it’s complete, there are apps you can use to help you track spending throughout the month to ensure you stick to it.
To create a simple budget, note your monthly income, then make a list of all your expenses. Don’t forget to calculate your non-monthly expenses, as those costs can sneak up on you! That will include things like annual registrations and birthdays. Then, deduct your expenses from your income, and adjust your expenses until you end up with a zero result. That’s it!
Many people don’t reach zero at first. Extra money indicates you need to push some funds toward paying off a bill, or toward savings. Too little money means that some cuts are necessary. Since it’s easier to figure out what to do with extra money than it is to make cuts, here are some suggestions for the tough stuff.
Save on the Big Stuff
Health care isn’t cheap, and chances are it eats up a good chunk of your budget, but it’s a must-have. Thankfully, you have options. For example, many seniors don’t realize that by switching to Medicare Advantage, they might have a little higher initial cost, but they can save money overall. Medicare Advantage plans are required to include everything Original Medicare includes; however, they cover additional health-related expenses as well, such as prescription drugs, hearing exams, dental care, and vision exams. Ultimately, it can reduce your out-of-pocket by giving you much-needed, broader coverage.
If you’re planning on staying in your home long term, see if you can reduce your monthly mortgage. One option is to rent out part of your home and then use those funds to supplement your mortgage. Or you can opt to refinance your home. In this case, you can relinquish some equity in your home and reduce your monthly payments, but there will be some fees associated with a refinance.
Eat on the Cheap
When it comes to basic necessities, food ranks right up there with health care, and it’s another tough area for cutting corners. However, there are some smart strategies to make your food budget go further. Living on the Cheap notes there are several grocery chains that offer discounts to seniors. You might need a loyalty card or have to shop on particular days for the discount, but the minor inconvenience can save a lot in the long run. When you go shopping, plan meals in advance and make a list of the food you need, as impulse buys can put you over your budget pretty quickly. You can also use an app to track your groceries specifically, which can be especially handy if that’s a weak area in your budget.
Another idea is to take advantage of free meal programs, such as Meals on Wheels and various food banks, and oftentimes municipalities and faith organizations help with food as well.
The Goods on Gadgetry
Many seniors are uncomfortable with smartphones, but Age in Place Technology explains there are free classes through many organizations to help them get oriented. Even if you need a little help getting started, a mobile phone can help you stay in touch with loved ones when you’re out and about, or call for help in the event of an emergency. If a phone itself is beyond your budget, there are places that offer free cell phones to seniors who meet certain financial qualifications.
Retirement can be financially challenging, but with a few smart strategies, you’ll be set up for success. Keep track of your spending and find ways to lighten expenses here and there. Stretching your pennies might be tough at first, but once things are sorted out, you can focus on relaxing and enjoying yourself like you always dreamed about.
Author Karen Weeks can be reached by email or at her website.