Seniors on fixed incomes are struggling while inflation soars, but there are still many ways to stretch a dollar.
Rent, gas, groceries: they’ve all skyrocketed in price. Those of us on fixed incomes are hurt the most. It does not help that the stock market is in bear territory and bonds pay next to nothing. In fact, a quarter of older adults are putting off retirement for just those reasons, according to the BMO Real Financial Progress Index.
This, too, shall pass. In the meantime, we can do what Americans have always done, which is to tighten our belts and pull ourselves up by our bootstraps. How? Senior Spirit decided to list some very doable adjustments we all can make to get us through these tougher times. Whether you are soon to retire, newly retired, or well into retirement, these tips can make all the difference.
- Make a budget. Old-school types can take out a pen and paper to write down a budget and keep track of spending monthly. Computer users can take advantage of Mint or You Need A Budget (YNAB) apps that input spending for you. Go here for specific app recommendations. Sometimes, all you need to reduce your spending is to see, in black and white, how much it really is.
- Delay Social Security. If there is any way possible, delay taking Social Security as late as possible up to age 70. To see how much it can help you, create a My Social Security account. It will tell you exactly how much more you’ll be paid for waiting. Divorced women, who typically get low payments, can research the site and potentially increase the size of their checks by filing on the record of their previous spouse.
- Reduce your debt. Wipe out credit card and other high-interest debt by either earning more or spending less and using the windfall to pay it down. Credit card interest is increasing, and what you owe will snowball. To understand how important this is, read this article. Check here for tips on reducing your debt.
- Get a housemate. If you own a home, you can bring in some extra income by getting a renter. You can go for a Golden Girls scenario by searching for a retiree, or if you’d like the place to yourself more often, find someone who is working. Be discerning and make sure you do a background check and get a signed lease, as well as a month’s deposit. See this article for tips on getting started.
- Consider a reverse mortgage. If you have substantial equity in your home, a reverse mortgage may allow you to stay put and fund your cost of living at the same time. They are sold by many companies at different prices, so it is imperative that you do your homework, understand the framework, and shop around. For more on reverse mortgages, see this article.
- Check your insurance coverage and rates. Car and home insurers often hike rates on their loyal customers since it is easy to keep your policies with the same company year after year. But you may save hundreds of dollars by shopping around. Pour a glass of your favorite beverage and get online or on the phone with the goal of comparing coverage from five or ten companies. To get a look at some of the best potential rates, check here.
- Use a rewards credit card. If your credit score is good enough AND you pay off your balance every month like clockwork, you should be using a rewards credit card for every possible purchase. It will literally give you a discount on everything you buy. While savvy consumers can research various cards with rotating high-refund categories, a great basic choice is Citi’s Double Cash card. It offers two percent on every purchase with an annual fee of $0. If your current card offers less, consider upgrading. Wells Fargo has a similar product, and the bank will give you $200 if you spend $1,000 in the first three months.
- Find part-time work. Look for work you’ll enjoy; the good news about inflation is that salaries have gone up too. You may be able to find employment in a field where you have expertise, or perhaps you would prefer to have a job in retail that is near your home and has flexible hours. Get some social interaction by driving for Uber or Lyft, or keep your own hours by shopping and delivering goods for Instacart.
- Sell your excess stuff. Make a little extra money by putting items on eBay, Facebook Marketplace, Poshmark, or other online sellers. You can even make a little business by thrifting and reselling. Just be sure to thoroughly research your market and know what will sell before you buy up your local Goodwill or Savers. Most reselling apps allow you to look up items to see what they’ve sold for so you know their approximate worth and how much you want to pay.
- Cut vacation costs. It is a lot cheaper to travel in America than to go abroad. Remember there are plenty of people all over the world coming here to see the Grand Canyon, Niagra Falls, and hundreds of other scenic and memorable places unique to the US. Remarkable cities close to you offer distinct experiences. Consider taking a road trip in a rented RV or choosing an Airbnb instead of a fancy hotel for your stay.
- Downsize your home. Nothing saves money like reducing or eliminating your mortgage payment, or even getting a pile of cash from the sale of a larger home. Uncle Sam gives you a tax break when you sell your primary residence, and a smaller abode can reduce utility bills, time spent cleaning, and more. Consider the pros and cons and then move if it makes sense in your situation.
- Get healthy. There is nothing you can do to improve your financial situation more than to take care of your body. Preventive care can help you avoid a host of medical expenses down the road. A side benefit is the way you will feel as you get stronger and closer to a healthy weight. Your Medicare plan may well offer free gym membership, but almost anyone can start healthier habits by walking out their front door. Try these easy ways to get healthier.
Sources:
Blog posting provided by Society of Certified Senior Advisors
