Money-saving Tips for Seniors Living on a Fixed Income

For seniors living on a fixed monthly income, practicing sound financial habits is important to maintain a desired standard of living. In this article, we explore various cost-cutting strategies and lifestyle changes to can consider to continue living comfortably well into your golden years.

Retirement Money Saving Tips!

1. Become Budget Minded

   Given that your monthly income is limited, creating a budget helps to be judicial in spending and highlights areas you can cut back on. The simple rule to follow when making a budget is to prioritize paying off necessary expenses. These could include rent/mortgage payments, utility bills, health insurance premiums, prescription refills, transportation passes, groceries, etc.

   Additionally, the budget should specify how you'll spend the excess, which can be put towards an emergency fund, home repairs, leisure activities, etc.

2. Cut Back Non-essential Expenses

   Americans, on average, spend $1,497 a month on non-essential expenses, totaling around $18,000 a year. For seniors with fixed incomes, spending such a high amount on non-essentials is unsustainable.

   One should spend no more than 30% of their income on non-essentials. Typical non-essential spending includes:

   • Online shopping

   • Subscriptions to OTT platforms, music streaming services, magazines, online publications, mobile applications, etc.

   • Going out to eat or ordering food frequently

   If the budget shows that you're falling short on affording monthly necessities, cutting back on non-essential spending is the way to go.

3. Consider Downsizing

   Moving into a smaller home will help you save money and live a better lifestyle. For instance, moving from a family home into an apartment complex will provide the following benefits:

   • Accessibility: In an apartment, all rooms are located on the same floor, overcoming the inconvenience of having to climb stairs as is the case in family homes. Additionally, most apartment complexes include features such as wheelchair ramps and elevators.

   • Maintenance: Apartment complexes are often governed by HOAs (Homeowner Association), which are responsible for maintaining common spaces and building amenities. Moreover, you'll have access to on-call maintenance services for all home repair needs.

4. Refinance Your Home

   Many homeowners choose to refinance their mortgage to save money. By refinancing, you are essentially taking out a new loan to pay off your existing mortgage. This allows you to take advantage of lower interest rates and potentially shorten the length of your loan. In addition, a home refinance can also allow you to tap into the equity you have built up in your home. When done wisely, refinancing can help you save thousands of dollars over the life of your loan. However, it is important to remember that refinancing is not right for everyone. Be sure to understand the terms of your new loan before making any decisions.

5. Utilize Senior Discounts

   From local small businesses to major corporations, there are various saving opportunities that you, as a senior, should take advantage of. While some organizations provide senior discounts for individuals 50 years and above, others may reserve offers for those aged 65+. If you're unsure whether the grocery store or restaurant you regularly visit has a senior discount program, don't be nervous to ask.

   Additionally, one can consider becoming a member of the AARP. For the low cost of $12/year, members enjoy discounts on:

   • Groceries

   • Medicines and health insurance plans

   • Car rentals

   • Hotels

   • Pet insurance and much more!

6. Start a Part-Time Gig

   Whether you need extra cash or want to continue working post-retirement, a part-time gig is a great option. With the rise in online freelancing marketplaces, finding a gig is the easiest it's ever been. Depending on your skills and expertise, here are a few prominent options to consider:

   • Technical writer in healthcare, finances, entrepreneurship, education, etc.

   • Business consultant

   • Web programmer

   • Virtual Assistant

   • Tutor

Being a freelancer will provide you the flexibility to set your hours and pay rate. Hence, you can choose to work as much or less depending on need and preference.

Living on a fixed income shouldn't translate into sacrificing things that you cherish in life. Sound financial planning, downsizing or refinancing, and a few tweaks in spending habits will ensure you remain on top of finances and maintain a good living standard.