Retirement Financial Advisors: Stretching Your Retirement Dollars
|Written by Ken Teegardin|
SeniorLiving.Org Expert on Chief Editor | Caregiver
As the entrepreneur and motivational speaker, Jim Rohn, once asked, "Do you have more month left at the end of the money?"
That rings true more than ever today. Everyone in the U.S. has been affected by the sinking economy in some way—high gas prices, shrinking 401Ks, inflation, underwater mortgages. And for those retired living on fixed income, these financial setbacks can cramp the style for some seniors and devastate others.
We know. This seems obvious. And for those that already write down their monthly expenses, good on ya. If you're not doing it, try it. There's a reason businesses create budgets well before the start of each month. In order to get from one place (your income) to the next (bills paid), you need a map.
Your bank may have a budget feature integrated with your checking and savings account. The internet has free software applications like mint.com. If you're running a Windows operating system, Excel has budget templates; Mac users have Mactopia. Then there's OpenOffice, a free version of Microsoft Office. The Quicken tax folks have a free budget program. Finally, the old paper and pen work well, too.
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Whatever budget route you go, first write down all income coming in every month. Then list all your bills individually with amounts. Start with your fixed expenses such as mortgage, car note, cable, insurance, and medicine.
Then list other expenses that are fixed but could vary every month such as utilities, credit card, and groceries.
Now list everything else like entertainment, travel, etc. These can often vary greatly depending on the time of year. Just try to pick an average.
Finally, subtract your expenses from your income. Is that number red or black? If it's not black and you have more month at the end of the money, let's get to the nitty gritty. Even if you have money left over, we'll show you ways to have even more.
Easy Money Saving Tips
Most of these tips you can start right away, saving you hundreds every month.
- Home. Turn down your thermostat in the winter and up in the summer. A one-degree difference can save you 3% on your bill. To counter the differences in temperature, wear layers and slippers in the winter; keep your blinds closed in the summer. You can also ask your local power company if they provide free home audits. Their recommendations could save you $100s a year.
- Shopping. Before you saunter up to the cashier to buy that $40 silk blouse (even if it is 50% off), walk around the store with it awhile. In 10-15 minutes, look at it again and ask yourself, "Do I really want it?" You may decide that initial liking impulse has faded to ambivalence, just with the passage of time. If the item is expensive, say $100 or more, go home and wait at least a day before swiping that card. At least research the item online to see if it's worth its cost. Make a list before you grocery shop and stick to it. And an oldie but goodie: avoid grocery shopping on an empty stomach.
- Bills. Look at each of your fixed bills like your phone. Do you have services you don't need like call waiting, inside wire maintenance, etc? Cut them out. Look at your cell phone bills for the last few months. Are you consistently using less minutes than your plan maximum? Look at the next lowest minutes package. Make all of your local calls on your landline to use less cell minutes.
Examine your credit card bill. Are you getting the lowest rate they offer? Call them and request the lowest rate.
Check your auto insurance bill. Make sure the mileage you originally claimed you drive is still the same. Lower mileage driven can mean lower premiums. If your car is older and paid off, do you still need that $100 deductible? Do you still need comprehensive collision coverage? Are you getting all the discounts they offer (senior, safe driver, multiple driver household, good credit, anti-lock brakes, anti-theft devices)?
Ask about similar discounts for your homeowner's insurance such as security systems, fire extinguishers, and smoke detectors.
Shop around for cheaper alternatives for all these service providers.
- Medical. Ask your doctor if they will make a prescription for a three-month supply, this will save you two co-pay visits. Buy generic drugs and save up to 52%. And buy them at Wal-Mart or Target to save even more.
For low-cost dental work, go to your local dental school.
With just the small effort of creating a budget, you can immediately have a picture of your monthly financial health. From there, you can decide where you can make obvious cuts. Other cuts may be less obvious and require more discipline. But with these few tips, you can start to save several hundred bucks right away.
Updated: Jul 01, 2011