There are a lot of reasons people live on a fixed income. Maybe you’re disabled, retired, or simply saving for a large purchase. No matter what you’re reasons are for having a fixed income, there is always the downside of controlled spending and that often means going without.
In order to make every dollar count, employ some of these helpful tips. They’ll help you stretch a buck, which in turn leads to more savings. Having an emergency savings fund is the only thing that can save you when something unexpected occurs. It may not seem like you can have savings on a fixed income, but if you employ some of these useful tips, you may find you’re able to save more than you initially thought.
Create a Budget
No matter how much money is made each month, a financially successful person should keep a budget. This record allows you to look objectively at your expenses and see where you’re overspending. For senior citizens living on a fixed income, it’s important to separate expenses into variable and fixed expenses.
Fixed expenses are your monthly payments that have to be made, in order to stay out of debt and avoid higher interest feeds. These include:
- Mortgage payments
- Car Payments
- Cell Phone
Variable expenses are the expenses you have, but don’t result in a bill collector calling if you’re late on a payment. These expenses include:
- Clothing items
Avoid the Impulse
It’s easy to be at the grocery store and see a new and exciting brand. You want to try those new chips, even though they cost two dollars more than your current brand. You buy them and they’re delicious, but at the end of the month, you’re two dollars short. This is a small example of impulse buying and it needs to stop.
Impulse buying can ruin a fixed income. Saving and budgeting for large purchases is the best way to shop. If there’s something you want, give yourself some time to mull it over. If it happens at the grocery store, make a list and stick to it. If you really need that item, add it to next month’s list and budget it in. This applies to new furniture, clothing, and anything else you’re shopping for.
If you’re on a fixed income due to a disability, it’s important that you begin planning for the future. It’s unfortunate, but your checks don’t come with investment opportunities. You’re not receiving a company’s 401(k) matching and you don’t have an IRA. You’ll need to set these things up for yourself.
If your disability was caused by an accident, you may be able to garner additional funds for medical and other expenses. Personal injury law information is available to you if you need it. Or, quite possibly, you’re on a fixed income due to a lawsuit. Either way, you need to begin planning for your future.
You’ll want to save money every month. Pay your savings account before paying any bills or other debts. This is your emergency fund and it’s absolutely necessary. You’ll also want to consider some investment opportunities for retirement. Life insurance is another component to future-planning, because it protects your family should something happen to you, whether death or an unforeseen financial burden.
Be Frugal and You’ll Be Fine
So long as you remain frugal and stick to your budget, your savings will grow. You can afford to pay yourself each and every month, even if it’s just $25.00. Living on a fixed income isn’t easy, but budgeting can help ensure that you’re not sinking yourself further into debt. Instead, you’ll be saving the money you need for when you need it.