Whether you are a college student at university or a 30-year old with an office job, saving money has always been a challenging feat to do. Bills always seem to pile up, mortgages are getting higher, and emergencies sometimes arise just in time to empty your pockets. It is hard to budget your finances, especially if you are already struggling to make ends meet. However, it is much more challenging to do so when you live on a fixed income or pension-like your senior loved one. Older adults living off their savings and social security benefits can face money problems if they do not manage it wisely. Even if they had acquired quite a hefty amount of money, they could still run into some money issues due to several factors, such as:
- The increasing cost of senior living communities.
- Overspending on luxurious things.
- Existing debts.
- Poor money management and decision making skills due to old age.
Ensure your senior loved one's savings can support their long-term senior care costs by teaching them how to save money. Here are some great ideas you can impart to your loved ones so they can afford the best senior living facility they want without going broke.
1. Create a Budget
The first course of action is to talk to your senior loved ones about creating a budget. Broach the subject with diplomacy and include them in every step of the way. This way, they won't feel like they are being robbed of their own independence to manage their money. Establish a budget by listing down all of the incoming and outgoing money and its sources. This includes:
- Net income - list down all your loved one's income sources (minus the taxes) like pension and investments.
- List all of their fixed and variable expenses.
- Note their actual spending.
Having a budget plan allows your loved ones to track their current and future income and expenses. Thus, letting them know how close they are to reaching their savings goal. Make the budget plan accessible and easy-to-understand. Explain how it works, so your adult loved one won't feel left behind.
2. Reduce Utility Expenses
There are many ways to reduce your loved one's utility cost, like unplugging devices after using them, turning off the electrical appliance when not in use, or programming their thermostats to automatically turn off when there's no one around. You can also call their utility company and ask if they offer monthly billing plans, so their utility bills would be the same every month.
3. Make Cutbacks on Unnecessary Expenses
Review every single billing account still connected to your loved one's credit card. Sometimes, seniors forget to unsubscribe to specific applications and services, causing these companies to deduct money from their accounts without them realizing it. For instance, if they already have a Netflix Premium subscription, then maybe it is time to let go of their HBO Max and Hulu. Help them look for better service deals and alternatives. Other ways to cut back on expenses include:
- Sticking to one vehicle instead of maintaining two.
- Commuting instead of buying a car. (Seniors won't need one since most senior homes have a free transportation amenity.)
- Maximize discounts on bundle groceries and memberships.
- Look for an affordable life insurance policy.
- Limit traveling. But if you can't, then make sure to use your senior citizen discounts on accommodations.
- Indulge in healthy, home-cooked meals instead of eating out or having food delivered.
- Take advantage of senior property tax benefits.
- Save up by applying senior discounts to utility companies that offer it, like cable services.
4. Shop Wisely
Young adults are not the only victims of shopaholism. Older adults can sometimes get carried away by the pleasant feeling and high that comes with buying a new item. It's okay to treat yourself or splurge now and then. However, you should make sure that these items are necessary to purchase and, most of all won't ruin your budget plans. If you notice that your loved one's shopping expenses are always exorbitantly high every month, then maybe it is time to talk. Understand where this need to shop comes from. Are they trying to fill a need Do they do it when they are in pain or sad Help them address these root causes to remove their wasteful spending habits altogether. Explain it to them with compassion and understanding so they won't feel ashamed of it. You can also offer to accompany them during grocery or essential shopping, so they will have someone remind them how to save money for their retirement.
5. Control Debt
If your loved one has a habit of overspending, then maybe it would be a good idea to have a debit card instead of a credit card. Debit or actual cash allows seniors to spend wisely and stick to a specific budget. It would also help them save money by controlling their debts. Seniors can still have their credit cards but make sure to tell them to keep their receipts so they can track their expenses and see if it lines up with their budget plan.
6. Research Good Senior Savings Programs
Another step to include in your how to save money list is the available senior savings programs offered by the government. Individual states in the US offer property tax or homeowner benefits when a senior reaches a certain age. Research on these programs and see if your loved one is eligible to enroll in them. There are also housing assistance, food, and energy assistance offered by specific local or state organizations.
7. Make a Financial Goal
Budget plans would become useless if you do not have an end goal. For instance, your senior loved one wants to save enough money to afford a senior living community. Write it down, then estimate the cost of senior living facilities. After that, estimate how much money needs to be saved every month to achieve your loved one's financial goal. Explain to them that it would be much better to save more than what's written in the financial plan since senior living and caregiving costs are unpredictable.