Age Your Way: 5 Tips to Manage Today’s Financial Challenges
While each retiree’s dream might be different, today’s senior citizen typically looks forward to making time for family, hobbies, and travel.
Today’s rapidly rising prices might cause seniors to put those dreams on hold.
It’s understandable why seniors might feel anxious. A recent NFCC and Wells Fargo poll showed that 26% of Americans are more worried about meeting basic household expenses than 12 months ago.
Check out tips that can help seniors even amid rising prices and financial uncertainties:
Create or revisit the household budget.
Is there a realistic plan for the income that comes in each month? Be sure there is a line item in the monthly budget for essential living expenses like housing, groceries, healthcare and medications, car maintenance, gas, and savings.
If seniors haven’t been following a budget, take time to create one, no matter how simple, to track expenses to review and adjust as needed.
Download our Spending Plan Worksheet
Take a critical look at spending.
Most people are spending more on the essentials -- housing, healthcare, food, insurance, utilities, and transportation.
Consider temporarily reducing spending on traveling, gifts, restaurants, or other discretionary expenses.
Are any significant purchases on the horizon? Is It possible to postpone major purchases like an appliance or other large item? If a washing machine or other appliance needs to be replaced in the coming months, try to set aside cash now so that when the time comes to replace it, using credit isn’t the only option.
Shop smart at the grocery store. Plan meals and stick to your shopping list. Stock up on staples. Use coupons and discounts. Take advantage of discount gas prices, bulk grocery prices, and other low prices available from membership stores.
Consider supplementing monthly income.
Is monthly cash outflow greater than monthly income? Consider supplementing income with part-time work or a side hustle. Use career skills for freelancing, consulting, or contract work.
Turn a hobby into an income stream – writing, crafting, photography, art, or cooking and baking. Become a Lyft, Uber, or DoorDash delivery driver. Consider temporary work as a customer service representative, childcare worker, house or pet sitter, or an online tutor.
Look at housing options.
Many seniors are looking to sell their homes at today’s high home values, buy a smaller home (with lower utility costs, property taxes, and insurance), or relocate to a less expensive area.
A reverse mortgage is an option available to homeowners aged 62 and older to borrow against their home’s equity without making monthly mortgage payments. Seniors can choose to take funds in a lump sum, line of credit, or through structured monthly payments.
A reverse mortgage can be a sensible option for seniors with sufficient income to cover basic expenses, including property taxes and insurance, who want to stay in their homes.
Get a handle on debt.
Many seniors find it hard to manage rising prices when struggling with high credit card debt or other debt.
The longer a borrower carries a high-interest credit card balance, the bigger bite it takes out of available monthly income.
Consider a debt payoff strategy, such as a Debt Management Plan, which helps pay off unsecured debt, in total, in 3 to 5 years. A trusted national nonprofit agency like GreenPath Financial Wellness works with creditors to bring accounts current, lower interest rates, and waive fees. The monthly payment reduces your account balance and saves money on interest.
Connect with a Financial Counselor
If seniors, or anyone, feels anxious about their finances in the face of rising prices or overwhelmed with debt and unsure how to manage, our partners at GreenPath are ready to help!
As a national nonprofit, GreenPath provides free one-on-one financial guidance with certified counselors. You’ll improve your financial literacy and GreenPath will look at your entire financial picture and suggest options tailored for each situation.