Budgeting has never been a fun and easy task. Whether you’re a stay-at-home mom or a working young adult, you’ll find that your money doesn’t seem to be enough to support your daily bills and expenses. So, what more for older adults relying on a fixed income?
Many seniors face financial problems during their retirement period. Even those who successfully saved quite a fortune can experience financial difficulties because of senior care’s rising cost. As of now, an older adult’s average monthly senior living payment ranges from $1,625 to $8,517.
Fortunately, you can help your senior loved one experience the retirement lifestyle they have been dreaming of. They can live in the perfect senior living community and have a comfortable life without outliving their savings.
So, plan and prepare early to make your or your loved one’s retirement savings last a lifetime. Here are some budgeting tips you can do with your beloved senior.
1. Broach the Subject of Budgeting
Not all senior parents are happy to have someone managing their financial activities. They may see it as controlling or losing their independence. So, make sure to bring it up with kindness and compassion no matter their initial reaction.
Explain that this is not because of them not working hard during their younger years. Or that they can’t do it on their own. It’s just that the cost of living gets higher every day, and you want them to have the best life possible.
2. Create a Realistic Budget
First, determine what your senior loved one’s goal is in budgeting. Do they have a specific senior living community in mind that they want to save up for? Or do they want to save enough to live a comfortable life?
Having a specific goal will keep them motivated to budget their finances. It also makes things easier to put into perspective.
After that, create a worksheet highlighting their monthly expenses and income. You can do this by:
- Listing all their financial sources including pension, investments, and small business.
- List all their fixed expenses, such as rent and insurance.
- List their variable expenses (expenses that change every month) like groceries and medications.
- List their credit card expenses.
- You can also separate their expenses from essential ones to discretionary.
- Real estate or property taxes
Then, you can simplify it by using simple worksheets to indicate their monthly budget. Explain it to them so they can understand their financial situation.
With a simplified spreadsheet, they can now see their financial status, where they need to make cutbacks, and how much to save.
3. Look for Additional Sources of Income
Social security and other pensions can be a great source of income. But if your senior loved one wants to increase their finances, then looking for part-time work won’t hurt. Their benefits won’t be affected if they work part-time after they reach their retirement age.
Family members can also contribute to your loved one’s finances. There are plenty of ways to help them like creating an online shop selling your senior mom’s baked pastries, or featuring your dad’s handiwork at the local market.
4. Save Money Whenever You Can
Creating a budget worksheet allows your senior loved one to see where they might be overspending on. If that’s the case, then you need to let them know that a comfortable life in the future can be achieved once they cut out unnecessary expenses.
Some simple ways your loved one can do this include:
- Using senior discounts whenever possible.
- Reduce utility costs by opting for the monthly billing budget plan.
- Cut credit card usage and have a debit card instead.
- Avail bundle deals for telecommunication expenses.
- Control shopping urges. Try buying stuff during sales.
- Cancel subscriptions that you no longer use.
- Check your card subscriptions. You might have forgotten to unsubscribe to a service you no longer use.
- Choosing healthcare and life insurance payment plans wisely. Sometimes, paying the annual contribution at one go is less expensive than the monthly payment.
Also, help your loved one look through their bank statements. Check for suspicious purchases that might be there.
5. Apply for Government Programs
The state offers a lot of government programs for seniors. You can check your loved one’s eligibility and help them accomplish the requirements.
For example, some states offer tax exemptions for qualified senior homeowners. This reduces the property tax that they need to pay monthly or yearly.
Local communities also offer discount programs and assistance for seniors. This can include housing assistance, energy assistance for low-income seniors, and food stamps.
As taxpayers, your senior loved ones are entitled to these senior programs. So make sure to check your area for available assistance that you can get.
6. Make a Budget for Senior Living
Budgeting for a senior living community will be much easier if your loved ones already have a prospective facility in mind. This way, they can prepare and plan accordingly, depending on the community’s senior care costs.
You can help narrow down their budget by inquiring in the community about specific costs. You can schedule a visit with your loved ones, and ask about prices including the following:
- Ask about the coverage of their basic monthly payment. Does it include laundry services and home upkeep?
- Get a list of the specific fees they charge for extra services.
- Ask about their security deposit and refund policy.
Your loved one can also opt to go for a more budget-friendly senior living community. A comfortable life does not always mean a luxurious one. It’s still better to worry about how to spend your overflowing savings than worrying about how to fund your retirement.
7. Seek Help and Support
If you’re having a hard time budgeting your senior loved one’s finances, then you can seek professional help. You can look for a financial advisor or a senior living advisor to help your loved ones achieve their financial goal.
For other obstacles, like an overspender or a shopaholic loved one, you can talk to them about it and suggest going to support meetings. You can also introduce a healthy hobby that your loved one can put their time into and replace the need to spend.