Older people usually find it stressful to deal with their finances. They often have to make do with a fixed income, which can be hard to keep up with the rising costs of living.
If you’re a senior citizen, or are soon to become one, here are eight financial tips that can help you manage your finances better.
1. Stay Active and Healthy
This may not seem like a financial tip at first, but staying healthy is crucial for seniors’ financial health.
Think about it. Where does the majority of your money go each month? Probably a good chunk of it goes towards healthcare costs, whether that’s insurance premiums, copays, or prescriptions. If you can stay healthy and avoid needing as much medical care, you’ll save a lot of money in the long run.
There are plenty of things you can do to stay physically active, like walking, swimming, or taking yoga classes. As for your mental health, try to socialise regularly with friends and loved ones, and stay engaged in activities you enjoy. A healthy mind will also help you make sound financial decisions.
And hey! If you find it difficult looking after yourself, here is how you can prepare for aged care.
2. Make Sure You’re Signed Up for a Health Insurance Plan
This is a must for all seniors, regardless of your health. You never know when you might need medical attention, and if you don’t have insurance, those costs can quickly add up. If you’re not already signed up for Medicare, do so as soon as possible.
If you have a retirement account through your former employer, you may also be able to continue receiving health insurance coverage through them. Check with your human resources department to see what options are available to you.
3. Review Your Expenses and Create a Budget
You can’t make informed financial decisions if you don’t know where your money is going each month. Review your expenses and create a budget so you have a better understanding of where your money is being spent. This will help you make adjustments to ensure your spending aligns with your goals and priorities.
If you find that your expenses are exceeding your income, there are many things you can do to cut costs. Take a close look at your budget and see where you can make cuts, such as eating out less often or downsizing your home.
4. Avail Tax Breaks and Credits
As a senior citizen, you may be eligible for certain tax breaks and credits that can save you money. For example, the Senior Citizens’ Tax Credit is available to taxpayers aged 65 and older. This credit can reduce the amount of taxes you owe each year.
Be sure to speak with a tax advisor to learn about all the tax breaks and credits you may be eligible for. You should also check if there is any money owed to you. For example, unclaimed dividends from investments or overpayment of your taxes.
5. Automate Your Finances
One of the best ways to stay on top of your finances is to automate your bill payments and savings. This way, you don’t have to worry about forgetting to make a payment or transfer money into your savings account.
You can set it up once and then let it run on autopilot. Many banks and financial institutions offer this service, so be sure to ask about it the next time you’re at your bank.
Doing this will also save you money in the long run by avoiding late fees and other penalties.
6. Know What Financial Scams Look Like
Unfortunately, seniors are often targeted by scammers who try to take advantage of them financially. It’s important to know what these scams look like so you can avoid them.
One common scam is when someone calls pretending to be from the IRS and tells you that you owe money. They may threaten to arrest you if you don’t pay up. But the IRS will never call you out of the blue like this, so if you get a call like this, hang up immediately.
Another common scam is when someone calls or emails pretending to be from your bank. They may say there’s been suspicious activity on your account and they need your personal information to verify it.
They may even say your account has been hacked and you need to transfer your money to a new account for safety. But banks will never call or email you asking for personal information like this, so if you get a call or email like this, don’t respond and report it to the authorities immediately.
You can find more information about common scams that target seniors on the FTC’s website.
7. Create a Will and Estate Plan
It’s important to have a will in place so your loved ones know what to do with your belongings and finances when you pass away. Without a will, the state will decide how to distribute your assets, which may not be in line with your wishes.
In addition to a will, you should also create an estate plan. This is a document that outlines your financial affairs and includes things like your bank account information, investment portfolio, and insurance policies.
Your estate plan should be updated regularly to ensure it stays current.
8. Keep Your Credit in Good Standing
As a senior citizen, you’ve probably built up a good amount of credit over the years. It’s important to keep your credit in good standing so you can continue to take advantage of the many benefits it offers.
Some of the things you can do to keep your credit in good shape include paying your bills on time (by automating it), maintaining a good credit history, and using a credit monitoring service.
9. Last Words
These are some of the financial tips that can help you (a senior citizen) with your finances. However, you should also keep in mind that there’s no shame in admitting that you need help when it comes to managing your finances.
If you find yourself struggling, reach out to a financial advisor or counsellor. They can help you get your finances back on track so you can enjoy a comfortable retirement.