The average retiree spends around $49,000 each year, according to the US Bureau of Labor Statistics. With the cost of living continuing to rise, a single retirement pension might not be enough to survive. Budgeting is an essential part of managing your finances, and the nature of it can differ at various points of your life. All too often, however, very little advice is given to you on how to plan your finances in your retirement years.
Thankfully, there are many financial blogs geared towards seniors to guide you on that endeavor. But before getting into the more advanced info offered on those sites, here’s a simple guide to budgeting for senior living.
Assess Income and Spending
The first phase of formulating any budget is to account for the money coming in and money going out. Income streams, savings accounts, investments, and other assets will be assessed and held up against all of your expenses. Keep every document related to these details close at hand. This makes it more convenient for you and anyone helping you manage your finances when a document needs to be pulled up for reference.
Organize Your Senior Living Budget
After taking stock of your income and spending, it’s time to organize your financial affairs. Since budgets are constantly shifting because of variations in cash flow, it’s important that you anchor it by setting goals. For example, set boundaries on your spending, only exceeding them unless deemed necessary.
Start setting a specific savings goal to hit every month. Consult your family members and financial planners for more advice on organizing your budget. It is also at this phase that you have to start accounting for future spending. For example, getting guaranteed life insurance for seniors eliminates the risk of a failed claim.
This ultimately ensures that you’re prepared for health expenses once health problems arise. Similarly, you will find that you’ll need more amenities and tools as time passes. A well-organized budget accounts for every expense that will come along, as well as any pensions and allowances you can claim as you age.
Stay Updated On Your Finances
Now that you have a solid foundation for your senior living budget, all that’s left for you to do is to stay up to date and adjust according to shifts in your financial situation. It’s also the time to increase your financial literacy, to better navigate the fiscal world and keep yourself safe from scams. Since incomes and spending are subject to change at the drop of a hat, make use of reliable calculator apps to update your finances with little fuss.
For example, Mint lets you update your financial plan in real-time, as well as pay bills, and keep tabs on your investments. Honeydue also lets you manage budgets, but with a greater focus on developing better financial literacy. There’s also a wealth of information websites, webinars, and even online courses you can take to complete your knowledge of how finances work. Sites like Khan Academy have courses that fully accommodate every level of understanding.
Senior living presents financial challenges that many people might have not yet faced up to that point. Follow these guidelines as they should help keep your budget solid even in the face of such challenges.