Thriving On A Fixed Income

Posted by Jennifer Walker on Tuesday, July 21, 2020 at 3:44 PM By Jennifer Walker / July 21, 2020 Comment

Yes, You Can Thrive on a Fixed Income. Here’s How:

A lot of people have a misconception of living on a fixed income. They imagine seniors barely scraping by month to month, obsessively clipping coupons, and having no funds to buy themselves even the smallest of indulgences. But the truth is you can live on a fixed income while still making the most of your golden years, and many retirees do it. It all comes down to how you plan and manage your finances, including making a budget and sticking to it.

If you’re a senior who is looking for ways to modify your finances so that you can live happily on a fixed income, the information below can help you get off to a great start.

Create a budget.

As Morning Chores explains, the first part of getting a handle on your finances is creating a budget because it will serve as the foundation for every decision and move you make. Start by writing down the amount of your monthly income. This should be quite easy if you live on a fixed income. Be sure to include the income from your retirement savings and benefits, pension, Social Security disability, part-time job, and any other sources.

Then, factor in all of your monthly expenses. Start with your fixed expenses, which will include things like mortgage/rent, insurances, groceries, car payments, and utilities. Once you have these totals, subtract your fixed expenses from your income. That will tell you how much money you have left over for discretionary spending.

Downsize your home.

One great way to save money is to downsize your home. If you’ve got more space than you need and a mortgage you’ve paid off, why not opt for a smaller space that fits your lifestyle? 207 Prime Properties can help you find the perfect smaller seacoast home, and they can help you sell your current home. Who knows? You just might make a profit off the sale and have more money to add to your nest egg.

If you’re not quite ready to sell, and if you have a mortgage you’re still paying off, consider refinancing so you can get a lower rate on your monthly payments. You may even find more favorable terms! This can be especially helpful for veterans if you opt for a VA streamline refinance. These loans have few out-of-pocket costs, ensure a lower monthly payment and you can close quickly.

Add income.

If you’ve developed an accurate budget of your income and expenses, and you need more discretionary money than the budget can provide, consider ways that you could increase your income. For instance, maybe there is a local job you could work part-time; not only would this give you some extra funds, but it could also give you the chance to get out of the house and socialize a couple or a few times a week.

You could also become a freelancer for pretty much any industry you can think of. Whether you have experience or a knack for writing, engineering, web development, accounting, or any number of other fields, you can probably find work as a freelancer.

Tackle debt.

Nothing can stop you from living well on a fixed income quite like being burdened by debt, especially credit card debt. Start taking action as soon as possible to eliminate debt. Seniors Matter explains that the more you owe, the more you may have to devote to tackling it. But it will all be worth it when you’re free from debt and exorbitant interest rates.

Lower your monthly expenses.

Lastly, if you’re not able to work a side gig, or part-time work still won’t give you the discretionary funds you need or want, assess your budget and see where you can cut costs. Are you eating out regularly? If so, it’s time to put yourself on a schedule. Are you leasing a car every few years? Buying a reliable used car to use for the foreseeable future could also help you save significantly. Furthermore, consider any other expenses—big and small—that you could reduce or eliminate to create a more comfortable lifestyle overall.

Living well on a fixed income is a practical goal for any retiree; it just might require a little financial tweaking. Remember to make a budget, look into downsizing or refinancing, consider ways to add income, and work toward eliminating debt. Lastly, think of any ways you could lower your monthly expenses. By taking more control over your money, you will be freer to enjoy your golden years like you’re supposed to.