Each week, Dr. Mauk shares thoughts relevant to Baby Boomers that are aimed to educate and amuse.
Most seniors have a fixed, limited income. Even though it may not seem like a whole lot, there are ways to budget and make the fixed income work to your advantage. After all, you know exactly how much money you are going to get each month. You don’t have to worry about losing a job, or not getting a paycheck. Most of the time the money comes in on a predictable date and this is very advantageous because you know exactly when the money is going to get replenished.
Now to the budgeting. Most seniors have essentials such as paying for medications, food, rent and mortgage, transportation and of course incidentals. Figure out how much you have available after your rent/mortgage expense, medication expense, transportation expense and this is the amount you have for food and incidentals. Going out to eat can be a major expense so staying in might be a good idea for some.
Additionally, if you have money left over at the end of the month, you can save up for a vacation, or a one off purchase.
If you have debt, negotiating the interest rate with the bank or credit card company can save a lot of money. Monitoring utility usage and minimizing utility usage can also lead to a big savings. Leaving on the air conditioning or heat during the day when you aren’t home tends to add up over time. Even though this may amount to 50-100.00 per month, over the course of the year this equates to thousands of dollars.
It’s also worth mentioning that not all insurance premiums are created equal. Some people are unknowingly paying for services outside of Medicare that they may not need. Likewise, for those on an extremely reduced fixed income, it could be worth looking into Medicaid in your state. Each state has different rules, but here is a nationwide guide to Medicaid, which can help pay for regular medical expenses and long term care.
The last piece of advice is to track your not-so-necessary purchases. Write down each time you purchase something that is not essential and you will most likely be surprised. If you are not careful, a large amount of your budget could be going to non-essentials. Whether you use a pen and paper, or are using budgeting software, it is a good idea to keep track of all expenses. Click the lick to see a handy budget sheet created by AARP. This minimizes surprises and will lead to a much easier time getting to the next month’s income check.
Jacob Edward is the manager of Senior Planning in Phoenix Arizona. Jacob founded Senior Planning in 2007 and has helped many Arizona seniors and their families navigate the process of long-term care planning.