Make your fixed income go further as a senior: 20 tips

When you’re living on a fixed retirement income, it’s important to budget carefully and keep unnecessary expenses to a minimum. Living within your means is an absolute priority for seniors wanting a stress-free retirement, and that takes careful planning when it comes to bills and luxury purchases.

According to the Global AgeWatch Index 2015,1 compiled by HelpAge International, there is an alarmingly high rate of poverty among older Australians. Australia ranks 94th, ahead of only South Korea and Venezuela, for the worst rate of old-age poverty and 94th again for relative welfare.

Older Australians may be wealthy in terms of health, employment and education, but in terms of income security and financial safety, many older Australians are worried.

The key to alleviating this worry is to educate yourself early on with measures for when you retire. Whether you are buying or selling a home, choosing a superfund, or deciding when to retire, a little knowledge can mean the difference between financial security and financially struggling later in life. Early education helps you to make more informed decisions about various financial products and the levels of risk you might face as a retiree.

But what if it’s too late to educate yourself? What if the time is now and you’re all set to retire? What can you do to better yourself financially now and reduce the risk of money-related stress later on?

Budgeting and saving tips for seniors

1. Know what you have coming in

Knowing exactly how much money you have coming in each month will let you set an accurate budget to make sure that your mandatory expenses are met. Never base a budget on a rough estimate, because even a few dollars here and there can make a big difference in the long run.

2. Pay for necessities first

Before making any nonessential purchases, be sure that your mandatory bills up are up-to-date. The first bills you should pay each month include your rent/mortgage repayments, prescription refills, utilities, food and insurance.

3. Be realistic

Only listing the things you know you HAVE to pay will make you feel good about your finances on paper, but it’s important to be realistic. When working out your budget, always count in a few mandatory extras such as a car service, tire change or roof repair. Hopefully nothing will go wrong, but if it does, at least you’ll be prepared.

4. Take advantage of senior discounts

Senior discounts are there for a reason, so don’t forget to use them! Carry with you a proof of age card and you’ll find you can save on a huge number of things, from public transport and dining out to museum entries and cinema tickets. If you don’t see a discount listed, it can’t hurt to ask.

Find the Seniors Card for your state here – Seniors Card discount.

5. Utilise your skills

Instead of paying for a cab to get to the shops, ask your neighbour or a friend to give you a lift in exchange for some sewing or mending.

6. Shop smartly

Buying according to what’s in season can save you money, as can buying according to what’s on special. Before you hit the grocery store, check the weekly specials and base your meal plans around items that are half price or heavily discounted. Not only will you save a lot of money, it keeps your meals interesting. Not sure what to cook? Conduct a search in Google for the discounted product and see what recipes come up.

7. Take out the little things

Life is about simple pleasures, but those simple pleasures add up pretty fast when they become a daily occurrence. Ask yourself – do I really need that latte from the cafe or can I have an instant coffee at home? Do I really need to buy a newspaper every day or can I read it online?

8. List your splurges

Stop those feelings of deprivation by making note of your little splurges. Alternatively, you could make a list at the beginning of the month of splurges you wouldn’t mind making, and then choose just one or two. If you keep denying yourself you’ll become worn down, so treat yourself while still staying within your limitations.

9. Make sure you’re getting everything you’re entitled to

In addition to the Age Pension, you may be able to qualify for other payments such as a carer’s allowance. If you’re unsure about what you should be receiving, be sure to visit the Human Services’ Older Australians webpage or call 13 23 00.

Even if you don’t receive the Age Pension, you may still be eligible for other benefits such as travel concessions, cheaper medicines and reduced council and water rates.

10. If you need access to additional money, consider alternatives to traditional loans

While it can be difficult for seniors to get a loan from the bank, the Department of Human Services offers some alternatives such as the Pension Loans Scheme or an Advance Payment. If you are not on the full pension due to your income or assets (but not both), you can use your real estate as security for a loan. You can also receive your pension payment in advance if you really need help to cover immediate expenses.

11. Choose smaller trips instead of one large one

As tempting as it is to spend a big chunk of your money on a six month holiday to mark the end of your working life, consider budgeting for 20 × one week holidays instead. This ensures you get a holiday every six months for the next ten years.

12. Consider downsizing

If the kids have flown the coop and are settled with their own families now, consider downsizing to a smaller home. Not only will a smaller home take less management, it will likely give you a good wad of cash too.

13. Declutter

If you can’t quite bring yourself to sell the family home, you can at least get rid of the things you no longer need. Sites like Gumtree are fantastic for selling old and unwanted goods or you could consider a big garage sale.

14. Downscale your loves

If you’re a season pass ticket holder for the Australian Ballet, consider choosing just two shows a year instead or switching your season’s pass for a more local, less exclusive company. If it’s rugby league that’s more your style, instead of paying big to watch the State of Origin live, watch the game at your local pub or invite a few friends over.

15. Avoid major shopping centres

If you need to get a few things from the supermarket, don’t go to the supermarkets located in the heart of the big shopping centre. You’ll be tempted to browse which leads to impulse buys, which then leads to poorer finances. Better yet, shop online and avoid the bricks and mortar store altogether!

16. Quit your vices

There’s never a better time to quit expensive and bad habits than now. Prices of cigarettes are only going to go up, so by quitting smoking, you’ll be doing yourself a favour not only on the health front, but also in terms of the money you’ll save.

17. Realise the importance of the little things

Many simple changes in the home and to your lifestyle can add up to big savings over time. While some things may be an initial investment, they’re well worth it over time. Little changes include:

  • switching branded products for generic brands
  • taking a bottle of tap water with you when you go out instead of buying bottled
  • moving your account to one with higher interest or less fees
  • turning off appliances when they’re not in use
  • turning off lights when leaving the room
  • making big batches of food to freeze
  • going to the library instead of buying books
  • installing CFLs or LEDs instead of incandescent bulbs
  • regulating the temperature in your home with a timed thermostat

18. Make your own gifts

Birthdays and Christmas can be costly times, so instead of hitting the shops, tap into your creative side and make use of your free time.

19. Rent out your unused space

If you have a spare room in the house, why not rent it out for a little extra cash? Alternatively you could try renting out your garage space if you no longer use your car and you live in a central location or near a train station.

20. Babysit the neighbour’s kids

Many parents are just crying out for someone they can trust to watch their kids for a few hours, so why not grab a few extra bucks and offer to take the baby for a walk to the park or put the kids to bed while they go out for dinner. Even an extra $20 a week can help in tough times.