When you’re living on a fixed income, it’s important to budget carefully and keep unnecessary expenses to a minimum. If you’re a senior with a fixed retirement income, it’s essential to approach paying bills, buying necessities, and making additional purchases in a way that allows you to cover your needs without living beyond your means.

Tips for Living on a Fixed Income

Budget Carefully
When you know exactly how much money you have coming in on a monthly basis it’s important to develop a budget that allows you to make sure that the mandatory expenses are covered first. Once you have budgeted for necessities, you’ll be able to allocate any additional funds for the other items or services that you need or want. Once your budget is developed, follow it carefully.

Pay for Necessities First
Before making any nonessential purchases in any given month, take care of paying your mandatory expenses. The first bills you should pay each month include your mortgage or rent, prescription refills, utilities, food, and health insurance. Until those expenses are taken care of, you shouldn’t spend part of your monthly income on anything else.

Shop Wisely
If you’re income is fixed, it’s more important than ever to take steps to make sure that you are getting the most for your money at all times. Instead of running to the store every time you run out of a particular item, it’s better to take a systematic approach to shopping. Steps you can take to get the best value for your dollars include:

• Invest in energy efficient light bulbs to save money on power bills.
• Improve home insulation to reduce heating and cooling bills.
• Plan meals around seasonal and “on sale” groceries.
• Submit available rebate offers for products you use regularly.
• Use coupons when they truly represent a saving opportunity.
• Watch for the items you use to go on sale and stock up when prices are at their lowest.

Take Advantage of Senior Discounts
While special offers for seniors vary from one company to another, there are many savings opportunities for mature individuals. Some companies offer senior discounts to individuals 50 and over, while others reserve discounts for older adults. It’s well worth asking about senior discounts when shopping, dining out, traveling, visiting museums, and more. Be prepared to show proof of age to receive this type of price reduction.

Trade Services
Consider working out barter arrangements that are mutually beneficial for you and other people that you know. Chances are that you have talents or access to goods that other people will be happy to trade for items or assistance that you need. For example, if you enjoy vegetable gardening but dislike yard work, see if one of your neighbors or other acquaintances would be interested in trading lawn maintenance for fresh veggies. This will allow you to make sure that extra bounty from your garden is put to good use while enabling you to enjoy a well maintained yard without having to purchase a mower and fuel or hire someone to do the work.

Establish an Emergency Fund
It’s important for everyone to set aside funds in a fund to be used only in case of emergencies. When you rely on a fixed income, it’s important to have a place to turn when unexpected medical bills, car problems, home repairs, or other expenses strike. Setting aside a few dollars in each month’s budget for an emergency fund can be the best way to make sure that funds are available to take care of unplanned expenses in a timely manner.

This money should not be kept in the bank account that you use to pay regular expenses, as the temptation to spend it in non-emergency situations might become too great. Instead, keep a separate emergency savings or checking account that you can access fairly easily, but that you don’t use all the time.

Stay Within Your Means
The ultimate rule for successful living on a fixed income is to stay within your means. With careful planning and responsible spending, you’ll find that it’s not impossible to live comfortably on a fixed income during your senior years.

By Mary Gormandy White, M.A., SHRM-SCP, SPHR

What Every Senior Should Know