Do you know that people like What do Bill Gates, Warren Buffet and Mark Zuckerberg, to name a few, have two things in common?
First, they are not only rich but the super-rich.
Second, they live on a budget.
As incredulous it may seem, they do budget their expenses – the size of which, however, is something we can only gawk in awe. As the saying goes, “Large buttons need large buttonholes.”
Which underscores the importance of having a budget – regardless of button size. In fact, the smaller the button, the more imperative a budget is.
Here’s why…
Why is a budget necessary in old age
Yes, elderly people like you and me have fewer needs. But no matter how minimalist you want yourself to be, there are certain items that you cannot let go or avoid without affecting your comfort and well-being.
Here are a few of them:
- Nutritious food
- Health care
- Home repairs
- Water and power bills or mortgage payments (if you are still having some)
- Travel and entertainment
- Day-to-day sundry expenses
These cost items stare at us every waking day of our retirement lives. They are very real and they need monthly allocations if you want to enjoy your retirement years. At it a time when you are supposed to enjoy life, it would be tragic if you can’t because of your failure to budget for them.
Without a sensible and working budget, you may deny yourself of nutritious food, or unable to buy your necessary prescription drugs. Without budgeting for home repairs, you may end up living in a home that can fall apart at any time due to disrepair, or suffer long wintry months from cold because you cannot pay your utility bills.
Making a budget is admittedly difficult. Many people scorn at the thought of making one. “It’s too difficult,” they say. Or “my income is too small to make a budget for.”
No income is too small to make a budget out of. In fact, the smaller your income, the more imperative a budget is.
Too difficult to make, Well, Payoff.com can help you.
But the real problem where budgets or budgeting is concerned is not in its difficulty to make or size of income, but on making it work, or sticking to it.
This article is intended to help you get over these hurdles. So stay with me…
How to prevent budget problems
Preventing budget problems require the discipline of an ascetic. In our current world of e-commerce, it is often difficult to resist TV ads, on FB, or unsolicited offers that land in your Inbox.
Not only must you make it work to rid your retirement days with financial problems, but you must also exercise creativity to pare it off to have some cash for unexpected expenses.
Here are a few tips to do that…
1. Food and grocery expenses:
About 13% of a live-alone senior’s retirement expenses are for food and groceries, according to the NPD (National Purchase Diary), 13% of a live-alone retiree’s monthly expenses are spent on food and groceries.
You can shave this off by 10% by using your senior citizens’ discount privileges or buy food items from discount grocery stores. And when dining out, patronize restaurants that offer discounts to senior citizens.
2. Household expenses:
Another huge expense item in your budget is “household expenses,” which could eat up 43% of your monthly retirement income.
These expenses can range from extra water bills due to leaks, or unwanted power bills due to excessive lighting.
Do regular checks for leaks on your faucets and piping, the water closet, lawn taps, or your bathroom shower. Lower the wattage of bulbs you are using or switch to LED lamps. Turn off your TV set when you feel drowsy or go to bed, and other appliances you are not using.
If you are strong enough to do some DIY stuff around the house, do it rather than paying a handyman to do it The Family Handyman has a list of things you can do yourself with ease.
3. Transportation expenses:
Of course, you have to move about or risk being isolated. But be careful, studies show that roughly 14% of an elderly’s monthly expenses go to transportation.
But you can trim them down by doing these simple things:
- Avail of carpools if one is available, or take a bus if you live along a bus route. If a subway line is within the immediate vicinity, take it rather than drive.
- If you still drive and are using one of those gas-guzzlers, swap it for one with a little engine. It still serves the same purpose but with the added bonus of saving on gas expenses.
- When buying foodstuffs, ride-on a friend or a neighbor who is going out to be his goodies;
- If you are up to the task, bike rather than drive. It is good exercise and saves fuel, too.
4. Avail of government benefits or utility discounts for seniors:
The government provides certain benefits and discounts for seniors. Check your local chapter of the AARP (American Association of Retired Persons) so you won’t miss them out.
For example:
– Energy bill discounts are granted through the LIEHAP (Low Energy Home Assistance Program);
– The Link UP or LifeLine programs give basic telephone services;
– Affordable medical costs are provided by the MediCal and Affordable Act (Obamacare). Health expenses account for roughly 11% of a retiree’s monthly expenses.
They may not cover much, but any reduction in your monthly budget can help a lot in letting you ride out any financial needs you may have in the future.
5. Other money-saving areas to consider:
A friend once remarked that a lack of money can make an elderly age rapidly.
He may be right, but it should not stop a senior from having fun.
So if you find reading fun but can’t afford to buy books. download free books from the Internet, or go to the nearest library and enjoy as much as you can for free.
For outdoor entertainment, check your local chamber of commerce if concerts or movies at the park.
Join the mailing list of local colleges and universities in your area to get updates on free displays, lectures, and symposiums. Take free courses for seniors. The mental enrichment they provide is invaluable.
I know a lot of people who don’t make a budget because they think it’s pointless. Their resources are not enough to make a budget.
Maybe they are right. But without one, it is impossible to cover all the necessary day-to-day expenses. They will either spend it needlessly or miss those that are really needed.
Without a budget, you will never know where limited cash went.
I know it is difficult to make a budget if you can’t even make both ends meet. I know how it feels I was once there. Somehow we made it. I was able to put both my children through college – something I could never have done if I and my wife did not exercise care in managing our scant resources.
Benjamin Franklin said, “Beware of small expenses; a small leak will sink a ship.”
Yes, your financial ship will sink if you can’t help buying things you don’t need. If you want to prevent problems, live simply and buy only those you need, not what you want.
And while you are at it, you can help a lot of seniors if you share this post. After all, sharing is one of the hallmarks of a loving heart.
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~oOo~
