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2023 New Year’s Resolutions for Baby Boomers

Happy New Year 2023!

Each new year offers a great opportunity for a fresh start and new beginnings. Setting resolutions is a long-standing tradition. However, only about 10% of people achieve their New Year’s resolutions each year. And many people stop working towards their resolutions after just the first two weeks.

When it comes to finances, 2022 was a challenging year. With high inflation, rising prices on everything, and volatile stock markets ‘2022 was the sixth-most volatile year since the Great Depression’.

Almost 81% of Americans are concerned about their financial New Year’s resolutions and believe that inflation makes it harder to meet their goals.

But making New Year’s resolutions is a great way to change your life for the better. The new year can be a great time to think about what is possible in your near future. Also, the new year is a great time to set some good financial goals. But make sure to set some small realistic goals that will help you work towards larger goals.

Even though we all like to set up new goals and resolutions, different generations have different goals for the new year.

If you are a baby boomer, here are my tips and advice to help you make your 2023 New Year’s resolutions.

1. Eliminate any debts.

Why is it so important to reduce or eliminate debt?

Debt is always a slippery slope because the interest will eat massive chunks of your spending money. The faster you can get rid of it, the faster you can get ahead.

That is why the beginning of the year is a great time to sit down and create a debt payment plan.

There are two strategic and popular methods to get out of debt faster. The Avalanche method helps to reduce the debt that carries the highest interest rate. The Snowball method helps to get rid of debt with the lowest balance first, and then move on to the next lowest one.

The way the snowball approach works is you arrange all of your debts from largest to small ones. Pay off your smallest debt first. Then once the smallest debt is paid off, the money you were paying toward it will be applied to your next smallest debt.

With the avalanche approach, you will start paying off the debt with the highest interest rate and then move to the next highest.

How to Pay Off Debt Before You Retire

Goals to get out of debt:

Identify what debt to pay first.
Set up a debt payment plan.
Consider reducing other expenses to pay debt faster.

2. Increase retirement savings.

Sometimes we do not realize how expensive it will be to retire.

Building a nest egg that allows for retirement income to be close to 100% of pre-retirement income is a hard financial task. Unfortunately, very few people are confident in their retirement savings goals. Most people do not have the proper number in mind, and they forget the impact of inflation on their savings.

In terms of total retirement savings, retirees need to be able to live on no more than a 4% annual withdrawal from their retirement assets. You are not ready to retire if you have minimal savings. Social Security is generally not enough for a comfortable retirement. You will need to keep working and saving more money.

When you are a few years away from retirement, being short on retirement savings can be problematic. The best option is to start reducing your expenses, so you can put more money into your retirement savings.

Goals to help you save:

Set a monthly savings goal.
Analyze your budget to see how much you can save.
Reduce your spending in a specific category each month.
Save a portion of your paycheck each month.
Increase your contributions to retirement plans – 401(k), IRA, Roth IRA.

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3. Save more for emergencies.

One of the biggest worries about money among baby boomers is that you do not know what will happen in the future.

You do not know if it would be enough to maintain your lifestyle in retirement and if you would not run out of money later when you are in your 80s or 90s.

When you retire, you do not have the security of your job to rely on and have to live on a fixed income. While you cannot exactly plan for the unknown, you can create a backup plan for emergencies.

In general, every household needs an emergency fund to cover unexpected expenses and it should be between 3 to 6 months of household income. But for retirees (in an ideal world) 1 to 3 years of living expenses should be set aside in cash.

Even though your emergency fund cannot cover everything, it can still reduce the money you have to borrow from your family or use credit cards and increase your debt.

The beginning of the year is a great time to put aside extra money into your emergency fund.

Goals for an emergency fund:

Figure out how much you need in your emergency fund.
Create a separate account (money market account, bank savings account, certificate of deposit.
Set up automatic transfers to your emergency fund each month.

4. Create a retirement budget.

Creating a retirement budget, along with a strategy of how you will draw money from your retirement funds is an excellent New Year’s resolution for many baby boomers.

Start by setting up a budget using the amount of money you will have when you retire plus a Social Security paycheck. Do not forget the emergency expenses like home maintenance, car repairs, and medical bills. See if you can live on that budget.

If you cannot, you need to come up with another plan. Think about downsizing if you are a homeowner or relocating to a more affordable area so you can put that extra money into retirement savings.

Think about how much you want to save and how much to spend in 2023. Sticking to your budget can help to know where your money is going. If you want to save more money for your upcoming retirement, begin eliminating some expenses that may not be important to you anymore.

When you retire, you do not need a lot of things that you did when you were working. The costs of commute, take-out lunches and business clothes will go down. On the other hand, you will start spending more money on travel, hobbies, and activities.

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Goals for retirement budget:

Identify your potential retirement income.
Calculate your future retirement expenses by looking at your current costs of living.
Budget with your spouse or partner.
Calculate your net worth.

5. Reduce your expenses.

One of the simplest parts of your financial life to control is spending.

The beginning of the year is a great time to look at your personal spending and set up new goals. 2022 has been full of change and adjustment with many people preferred to work remote. There is a good chance that your spending habits have changed as well.

How did you do last year? Did you get a full picture of your finances and know how much money you have saved (or not) in 2022?

If you struggled last year, decide how to improve your financial situation in 2023.

Look at your credit card and bank statements and see what expenses could be avoided last year, and plan to cut them this year.

Keep in mind, that balancing your income with your spending is the key to saving more money for retirement.

Goals for reducing your expenses before retirement:

Find ways to reduce transportation costs.
Pay off your mortgage or reduce housing costs by downsizing.
Eliminate high-interest debt – credit cards, personal loans, student loans.
Evaluate your insurance coverage.
Figure out where you will live in retirement.

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6. Manage your overall stress and focus on happiness.

We all know that financial stress is not good for our health. Financial anxiety negatively impacts not only our health, but our mood, home and social life, marriage, and ability to pursue our dreams and passions.

Unfortunately, in the current economic climate, it is unlikely that our financial difficulties will disappear overnight. However, it does not mean we have to give up. Perhaps, we need to take small steps to ease our stress levels and focus on happiness and not money.

Everyone’s dream is to have a happy family and be financially secure. So, if you want to be happy and have a secure retirement, try to:

Stop accumulating stuff – Spending money on accumulating stuff does not bring happiness and might put you in debt. Downsize and de-clutter your home, so you can spend more time enjoying your life rather than maintaining it.

Think about experiences – It is a proven fact that you are happier when you spend your money on experiences than on stuff. Accumulating more stuff does not make you happy but doing interesting things do.

Focus on your priorities – Know what is important to you and stop worrying about the rest.

Express gratitude – Be grateful for the good things in your life. It is easy to focus all your attention on the negatives when you are overwhelmed by financial uncertainty and money worries. While you do not have to ignore reality, you can be grateful for many small things in your life. Take a moment to appreciate the beauty of the sunset, flowers in your garden, a gorgeous sunny day, or just a good book.

Find ways to be kind and to help others. These efforts help you see beyond your own financial problems to give something back to the world.

Have you thought about your 2023 resolutions yet? Do you have any financial goals?

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2022 Year-End Retirement Planning Checklist

by Maggie Leave a Comment

three women at the table-year-end retirement plan checklist

It is hard to believe that the new year 2023 is around the corner!

I do not know about you but I cannot wait! Financially, 2022 was a challenging year. According to Goldman Sachs, ‘2022 is likely to end up as the sixth-most volatile year since the Great Depression’. The volatile stock market and the daily reminders of high inflation and rising prices on everything will likely make you worried about the cost of your future retirement.

But the most important lesson I learned over the past years, including the global pandemic, is that there are rewards to being prepared. I truly believe that the year-end retirement planning checklist is a great way to look back at 2022 and make sure you are on the right path to achieve your retirement goals in 2023.

Below is a helpful list of 10 tasks to complete before 2022 comes to a close.

1. Create financial goals for the next year.

Do you know how much money you need to retire? What are you going to do about rising inflation? How is it going to affect your retirement income?

How much will it cost to help your parent’s long-term care needs, pay for your healthcare in retirement, or pay for the vacation you really want?

Maybe none of that applies to you today but you want to know how to project into the future. It is important that you know how much you will need to live the life you want in retirement.

What other financial goals do you have?

2. Set a target retirement age.

Retirement is the one common financial goal we all share. We all need to plan for the day when we can no longer work or are just ready to retire.

The target date is the year closest to the year you plan to retire. Age 65 used to be the magic number, the age at which most people retire. Yet that golden age has changed. Many people are working longer. Even though they may want to retire, it is not always possible because they do not have enough money to retire.

Take some time to set a realistic target retirement date. Based on your estimated retirement income and expenses, you can plan your own retirement strategy.

Looking at your target retirement date and retirement income, you can determine if you have enough money saved for the next 20 to 30 years. If it is not enough for a comfortable retirement, move the date and save more in your retirement funds.

Just remember that where you live and how much you can afford to spend in retirement will impact your retirement lifestyle.

How Do I Decide When Best to Retire?

3. Look at your spending.

The end of the year is a great time to look at your personal spending and see where your money is going. This year has been full of change and adjustment. With many people working remotely, there is a good chance your spending habits have changed as well.

How did you do this year? Have you tracked your spending against your budget? Did you get a full picture of your finances and know how much money you have saved (or not) in 2022?

If you have struggled this year, decide how to improve your financial situation for the next year. Are there debts you should be making a priority to pay off? Look at your budget and decide if there were parts that were difficult to stick to.

Look at your credit card and bank statements and see what expenses could be avoided this year. Then set up a budget for the next year and decide on how much money you need to save in 2023 to meet your retirement goals.

4. Get a clear picture of your spending in retirement.

Do you know how are you going to pay for your retirement years?

First, think about your current overall cost of living. Then, think about if you have enough income to sustain your current lifestyle in retirement?

Calculate how much is your nest egg.

When you are near retirement, it is important to know how much money you will need to live comfortably for the rest of your life.

If you still have no idea how much money you will need, look at your current expenses and then evaluate how they might change in the future.

When you retire, you do not need a lot of things that you did when you were working. Generally, the costs of commuting, take-out lunches, and business clothes will go down. However, you might start spending more money on travel, hobbies, and activities.

Calculating your nest egg is easy if you already have a budget and know how much you spend now. The next step is to get a clear picture of how it might change in the future based on your retirement lifestyle.

Retirement Budget in 5 Simple Steps

Another option to figure out how much money you need to retire is to replace 70 to 80 percent of your annual pre-retirement income. For example, if you earn $70,000 per year before retirement, you should expect to live off $49,000 to $56,000 per year.

5. Review the source of your retirement income.

In my year-end review, I always find time to look at our future retirement income.

I usually look at our current Social Security, retirement, and investment funds statements to get a clear picture of our potential retirement income. I wanted to make sure that we are on track to our retirement goals and have enough money to cover our living expenses when we stop working.

When you are working, you typically have a single employer and a single source of income – your salary. In retirement, everyone has different sources of income – Social Security, pension, part-time job, investments, and retirement savings (401k, IRA, Roth IRA, Roth 401k).

To make your assets last through the next 20 or 30 years, use the rule of thumb to withdraw 4 percent of your retirement money annually. For example, if you have $500,000 in retirement funds, you can spend roughly $20,000 ($500,000 x 0.04) per year when you retire. Add this number to your Social Security, pension, and other savings, and calculate if it is enough to support the retirement of your dreams.

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6. Check your progress on paying down debt.

The end of the year is a great time to sit down and check your progress on paying down debt.

Ideally, you should be entering the retirement debt-free, but in the real world that is not always achievable. So, it may be okay for you to retire before you pay off your big debt like a mortgage, cars, and student loans.

Just make sure you understand the implications of retiring with debt because big withdrawals from retirement funds could push you into a higher tax bracket.

Yet, if you have several years before retirement, try to reduce your debt so you will have more money available for your lifestyle in retirement.

Pay off all credit cards and personal loan debt.

When it comes to debt, plan to pay off high-interest rates debt first. Credit card APRs have increased this year with the average rate around 19 percent. A credit card debt has become the most expensive debt for many people.

By reducing the existing debt and limiting new debt you can minimize the amount of retirement income that you will spend on interest payments. For example, if your monthly retirement budget includes a $350 car payment and a $700 credit card payment, you will obviously be able to spend $1,050 a month less than someone without those bills.

If you pay off a credit card that charges 19 percent interest, it’s like earning 19 percent on a risk-free investment.

Your mortgage.

Once, you paid off your credit card debt, start planning on paying off your mortgage. If you have a low-interest rate, you can plan to pay off the mortgage early by making “extra” mortgage payments each month.

With a mortgage paid off before retirement, you will have the extra money you need to travel in style or spoil your grandkids for years to come. Just remember that taking large withdrawals from your retirement accounts to pay off your mortgage could throw you into a higher tax bracket.

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7. Review your savings progress.

typewriter - year-end retirement planning goals

Did you spend less money this year due to the fear of covid? Did you spend less money on eating out, vacations, or concerts? Did you buy less gas because you worked remotely?

If yes, stash those funds into retirement savings. If you are still working, try to boost your savings rate. It is never too late to increase the size of your nest egg. If you are in your early 50s, you still have close to 15 years of working to save for your retirement.

You should save at least 15 percent of your gross income in retirement accounts such as 401(k), IRA, Roth IRA, or Roth 401(k).

A key factor in any retirement plan is having enough savings to last for the next 20 to 30 years.

8. Check your readiness for unexpected expenses.

Another important key factor in any solid financial plan is having enough savings to fall back on during emergency. To be prepared, put it on your checklist to have two funds – a rainy-day fund and an emergency fund.

Typically, a rainy-day fund is smaller, up to $2,500 for smaller expenses. An emergency fund can be as much as 9 or 12 months of living expenses – $10,000 to $50,000 or more depending on your expenses.

Whichever way you build your financial cushion, be sure you do it. There is no better way to have peace of mind than knowing you have funds to cover expenses when you need them.

9. Review your asset allocation and simplify your portfolio.

As you are getting closer to retirement, it is important to have a clear and accurate picture of your complete investment portfolio.

If your portfolio is spread out among several investment companies, it will become difficult to keep track of all that information. Think about consolidating all your accounts in one place like Vanguard. So, you will get simplified reporting, low costs, and low fees.

The financial markets have fallen sharply this year. Take the opportunity to review your asset allocation and make sure your portfolio is diversified and invested for growth. You should have a mix of stocks, bonds, mutual funds, and other assets that fits your retirement goals.

It can be tempting to stay away from stocks to reduce the risk of losing money in your retirement funds. But stocks provide growth and investing for growth is important. If you retire at 65 and spend 20 years in retirement, you need to have enough growth in your portfolio to make money last that long.

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10. Keep will and trusts up to date.

Another important part of your year-end retirement checklist is the status of your will and/ or revocable living trust.

Keep them up to date and make sure you have suitable executors, trustees, and guardians in place. Additionally, you will want to make sure your list of beneficiaries is up to date as well. If you have welcomed a grandchild to the family do not forget to add his/her name to the list. Also, if there has been a change in the family such as a marriage, divorce, or death, make sure to update your beneficiary list.

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8 Ways to Get Your Finances Under Control

by Maggie Leave a Comment

hands holding us dollars-get finances under control

Life can be difficult, and our finances do not always work out the way we want. The cost of living is rising due to the current high inflation. As a result, your expenses are getting maybe too high compared to what you are making monthly.

Living paycheck to paycheck can be a challenge in today’s world. That is why I am bringing you 8 ways to get your finances under control so you can do a better job managing your money.

1. Start by understanding your current financial situation.

The first step for taking your finances under control is to understand your current financial situation.

Gather all your bills together. Log into your bank accounts and mortgage company. Look at your credit card and car payment statements to figure out how much you owe.

Once, you have gathered all your financial information, sit down, and take a look at it. Get a sense of your financial baseline:

How much is your debt – credit cards, student loans, personal loans
How much is your mortgage balance
What assets do you have – real estate, pensions, stocks, bonds, bank account savings, retirement accounts, cars, boats, etc.

Then, bring all your information to one place by writing it down on a piece of paper, or in the spreadsheet document.

2. Make a budget.

Many people avoid dealing with budgeting, but the easiest way to get control of your finances is to make a detailed and realistic budget that you can stick to.

Do not set up unrealistic goals about how much you are going to save or how much extra money you are going to earn. Use your budget to follow your actual finances.

You can budget manually using a spreadsheet on a piece of paper, a mobile app, or PC software like Microsoft Excel or Google Sheets. Another great way to use budgeting tools is to download and print different types of digital products.

If you have not created any budget before, start by using Microsoft Excel or Google Sheets and put together a spreadsheet document. Write out your monthly expenses on the left side of the spreadsheet.

These could include fixed expenses:

Mortgage/ Rent
Utilities
Car payment/ Car insurance
Phone/ Internet

and variable expenses:

Groceries/ Food
Clothes/ Personal care
Dining out/ Entertainment
Activities/ Gym
Travel/ Vacation

After that, divide your spreadsheet document and on the right-side type in the amount you are planning to spend each month and the actual spending on each category. At the bottom add up the total to make sure that you are not spending more than your income.

Spreadsheet software like Microsoft Excel or Google Sheets is designed for budgeting expense tracking. When you enter amounts in each category, the program automatically performs calculations and adds to the total. It’s easy to use and you do not have to have math skills.

Once you have created your budget, make sure you stick to it. Your budget is your financial road map. It shows the real picture of what you can live on and what you can afford to spend each month. If you are constantly going over budget, you need to cut your spending.

You should try to live on the popular 50/30/20 budget rule. The goal is to spend around 50 percent of your after-tax dollars on necessities, no more than 30 percent on what you want, and a minimum of 20 percent on savings and debt payments.

The important thing to remember is that budgeting helps to build wealth over time by freeing up extra money for savings.

To help you get started, here are a few useful articles you may want to read:

3. Track your spending and know where your money goes.

I still think that “going on a budget” feels like “going on a diet” because you have to cut back on many things. That is why many people resist the idea. However, you can feel more in control of your finances know where your money is going and become a smarter spender.

The best way to track everyday spending is really simple. You just need to keep all your receipts for the day, then add up each type of spending by category. Add in the total for that specific day using your spreadsheet document or mobile app.

laptop, notepad - get finances under control

Ask everyone in your family who spends money track their spending for a few months. At the end of each month, look at your spreadsheet and see where your money is going. If your spending is going off the rails, you need to cut back your expenses.

4. Cut expenses and live within your means.

We all love to use credit cards for convenience but sometimes they make it too easy to spend more than we have.

If you leave your credit cards at home and go shopping only with cash in your wallet you will spend less money. If you try shopping with cash for a while, you will be aware of how much you spend regularly. People who do this typically spend 20 percent less.

One of the best ways to cut your expenses is to save on luxuries like dining, entertainment, and international travel.

Today we live in the world of high inflation and rising prices on food, housing, and energy. Many families may need to reduce their expenses in other areas to make ends meet.

If your budget is still out of balance, it might mean more sacrifices. To keep your budget on track, you may want to cut back on frequent expenses:

Delivery memberships
Streaming services like Netflix, Spotify, and HBO max
Your cable bills
Gym membership and exercise classes
Data storage subscriptions like iCloud and Google Drive
Unneeded insurance
Costly gifts and seasonal expenses
Pricey cellphone plan
Takeout meals
Full-priced items
Playing lottery

However, do not try to remove all luxuries or things that make you happy.

Being too strict with yourself can cause depression which leads to budget frustration. If your budget leaves no wiggle room, it is impossible to follow it for a long period of time. Do not set up yourself for an overly restrictive or unrealistic plan.

5. Build an emergency fund to keep finances under control.

Everyone needs an emergency fund. Your emergency fund should give you peace of mind because it helps you cover large or unexpected expenses.

Once you have your spending under control you can start building your rainy-day fund.

Many experts recommend aiming for an emergency fund with 3 to 6 months of living expenses. Sometimes you need to increase the fund up to 12 months of living expenses. Even though your emergency fund cannot cover everything, it can still reduce the money you have to borrow from your family or use credit cards and increase your debt.

You should never tap your emergency savings for expenses like leisure travels, holidays, or wedding gifts. These expenses are non-emergency expenses.

A true emergency is a situation that demands immediate action:

Major car repairs
Health emergency co-pay or large deductible
Unexpected home repairs
Emergency travel

As I said before, having enough money to fall back on means that you do not need to rely on family or credit card debt to cover emergency expenses.

Most people hold their emergency funds in bank savings accounts for easy access.

To start your emergency fund, you can use automatic savings plan to stash some money. If you do not already have a savings account, open one at the same bank where you have your checking account. Then link your savings and checking accounts, so you can transfer money between the two.

The checking account is for your everyday spending to cover the bills and any extras.

The savings account is where your savings will grow over time. Set up automatic withdrawals to pull the amount you need each week from your checking account into your savings.

However, if you want to use online banks like Capital One 360 or Ally Bank you can get a better interest rate than your local retail bank.

Also, you can open high-yield savings account that you cannot dip into it often.

Best High-Yield Savings Accounts

6. Reduce or pay off your debt.

If you look at your budget and do not know how to make headway, it’s time to be honest with yourself.

The hard truth you have to face is that you cannot take your money under control because you are probably in debt. That means that you are spending more than you are earning.

Why is it so important to reduce debt?

Debt is always a slippery slope -the interest will eat massive chunks of your spending money, making budgeting difficult. When possible, avoid debt by paying it off fast and not creating new debt.

When you carry high-interest credit card debt it affects your credit score and your financial progress. Once your debt is paid, you can focus fully on saving, investing, retirement planning, and other financial goals.

There are two strategic and popular methods to get out of debt faster:

The Avalanche method helps to reduce the debt that carries the highest interest rate.
The Snowball method helps to get rid of debt with the lowest balance first, and then move on to the next lowest one.

The way the snowball approach works is you arrange all of your debts from largest to small ones. Pay off your smallest debt first. Then once the smallest debt is paid off, the money you were paying toward it will be applied to your next smallest debt.

With the avalanche approach, you will start paying off the debt with the highest interest rate and then move to the next highest.

Debt is always a big weight on your budget. The faster you can get rid of it, the faster you can get ahead.

Here are other strategies to help you reduce or pay off debt faster:

Refinance a home loan, student loan, or a personal loan
Negotiate for a lower interest rate on credit card debt
Transfer credit card debt to a 0% balance-transfer credit card
Negotiate for a lower interest rate on a home equity line of credit (HELOC)
Make bi-weekly mortgage payments

The process of paying down your debts can be satisfying. It will work as a big boost to see progress on your payments.

7. Invest your money and save for retirement.

We all know that it is important to save money in your bank account for emergencies. Having enough money to cover unexpected issues is critical. However, we do not want to keep all our extra money in bank accounts because interest rates are not high enough even to keep up with inflation.

Investing allows us to set aside money that grows steadily and can increase over time. While we might not see great gains in the short term, this is a great way to prepare and save for retirement.

If you have a workplace retirement plan like a 401(k), use that for your retirement savings with automatic withholding. If you do not have a workplace account, consider alternatives like IRA, Solo 401(k), and after-tax money accounts like Roth IRA.

8. Stick to your financial goals.

When you are trying to get your finances under control you need to stick to your goals and give them time.

Keep a close eye on the progress you are making. Keep in mind that paying off debt, tracking spending, or reducing expenses is not going to happen overnight. Take small steps toward the final outcome.

Each person’s financial goals are different. Start your process by identifying your top priorities. Then figure out how much money you need for each goal and how much time you need for reaching it.

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Enjoying Your Golden Years on a Fixed Income

by Maggie 4 Comments

a couple at table with coffee cups - enjoy golden years of a fixed income

Today, I have a great guest post to share from Joyce Wilson. Joyce is retired and wanted to offer her mini-guide of several tried-tested strategies on living life to the fullest during your golden years on a fixed income.

Seniors who manage to save enough for retirement are as rare as hen’s teeth. With the median retirement savings for workers pegged at just $97,000, an increasing number of seniors are working post-retirement age.

You need to save $1.04 million in 2021 to retire comfortably if you are wondering, according to Annuity.

If you have not saved enough, do not fret. There are countless seniors in the same boat as you.

Furthermore, many of them have managed to set up fulfilling, enjoyable lives for themselves, despite drawing a limited income every month.

As a matter of fact, studies suggest seniors are happier than expected.

And you can be the same way!

If you want to learn how to enjoy your golden years on a fixed income, here is a mini-guide of several tried-tested strategies from Joyce Wilson.

Know where your money is going.

It is basic but essential – you need to have a clear, big-picture view of your finances. Knowing exactly how much money you have coming in and going out prepares you mentally and emotionally for cutbacks. You will know what your necessary expenses are and what you cannot afford.

Moreover, the clarity makes it easier to plan for the future. If you do not enjoy tracking your money (who does?), you can automate the activity through a budgeting app.

The Best 8 Budget Apps for 2022

Reading bank statements will also work in a pinch.

Create a budget.

You need to limit your access to spending money. Otherwise, you are going to spend too much, too quickly. Essentially, budgeting – and self-discipline – is non-optional.

Give yourself a fixed paycheck to live from each month, maybe by setting up a bi-monthly deposit to your checking account. Set aside money for necessary expenses and emergencies. Of course, do not go overboard with limits – give yourself some “flex” money for other expenses. As with all things in life, aim for a sustainable balance.

Be savvy about debt.

Debt is always a slippery slope – but especially so when you are a retiree. The interest will eat massive chunks of your spending money, making budgeting impossible and draining your retirement fund dry.

When possible, avoid debt – throw your credit cards away and save until you can afford two of whatever you are buying. If you are forced to borrow, prioritize paying the amount back quickly. Also, ask for assistance from a local agency for seniors, and consolidate the debt (for a lower interest).

Invest in your health.

Your health can be your biggest asset or greatest weakness. If you take care of your health, you won’t have to spend your money on doctor visits and hospital bills. Furthermore, good health will make you happy and make it easier for you to enjoy your life or work.

10 Healthy Habits for Seniors to Keep

It is never too late to work on your health. Go for long walks, take up an exercise routine, eat more greens, and do away with stress through activities like meditation.

Get creative with your meals.

Your meals do not have to be a large, ongoing expense. Get creative and plan them out to save money.

a bowl with veggies - eat healthy food in retirement

First, shop for generic brands instead of premium ones – there is little to no difference, as Foodtown can confirm.

Second, shop at the right time, in the right place. Go to a discount store at the end of the day, before the food is to be thrown out, for the best deals.

Third, make a list of your needs and stick to it when you go shopping.

Fourth, have filling meals using “stretcher” ingredients like pasta and potatoes. Also, try Asian recipes – they can be delicious and affordable at the same time.

Last, but not least, when eating out, go to places offering deals and discounts.

Find part-time, low-stress work.

You may have to work to support yourself – but it does not have to be a difficult, stressful endeavor. Freelancing, for instance, is a wonderful, stress-free option. It gives you freedom and flexibility, not to mention can bring in some good money.

If you are starting up your own gig-based business, forming an LLC is a good idea.

It protects your personal assets from lawsuits and offers other advantages like tax benefits, less paperwork, and added flexibility. To save big lawyer fees, you could file the paperwork yourself or use a formation service. States have regulations around forming an LLC. Check the local rules before you continue.

Consider alternative living options like downsizing.

Depending on where you live, your living expenses will account for as much as a third (or more) of your monthly expenses. With some adjustments, you can take away from those costs. You could downsize, moving to a smaller place that requires less upkeep (and money) to maintain.

Downsizing is possible with a smaller house, condo, or even active living arrangement.

If you want to stay where you are, you could rent a room out to someone, if it is an option. Likely the best way to save is to rent a room, instead of an entire home.

Choose free or low-cost entertainment.

You do not necessarily have to spend money to entertain yourself.

There are countless free activities that are just as enjoyable as paid ones.

Some examples are reading a book, visiting a library, museum visits, community events, concerts and festivals, hobby groups, and volunteering activities. Technology – the internet, apps, and games – can be your best friend when it comes to entertainment. You can ask your grandkids for advice.

Buy second-hand.

Buying second-hand is good for your wallet (and the planet in general). If you look hard enough, you can find as-good-as-new items at rock-bottom prices. This includes clothes, furniture, appliances, gadgets, and more.

Websites like Poshmark, Geebo, Mercari, and Craigslist allow you to buy (and sell) second-hand.

You can also, of course, visit nearby flea markets, thrift stores, goodwill sites, and charity organizations.

Final Thoughts

Age offers many advantages – like hindsight, experience, and an appreciation of the smaller things. Take advantage of your age to create and recreate your life as necessary.

Money is not everything, and your imagination can be your best friend.

Last, but not least, do not hesitate to ask for help – whether it is financial advice from a planner or monetary assistance from friends and family. You deserve it!

What are your ways to live on a fixed income? Share your ideas with us in comments!

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20 Easy Ways to Save Money Every Day

by Maggie Leave a Comment

people-meeting at table-easy ways to save money

We all know it is easier to spend money than to save them. Spending money often gives us emotional comfort and became a habit. But changing your spending habits and finding new ways to save money can be a great thing for your financial life.

Learning how to save money can help you to reach your financial goals:

to buy a house
to pay off debt
to save for a vacation
put more money in your emergency fund
to save for retirement
to save for kid’s education

No matter what your financial goals are, this post has money-saving ideas for everyone. Start with a few of these suggestions and see if they work for you.

Here are 20 of my favorite ways to save money every day:

How to Save Money Through Money Management:

1). Pay your bills online.

There are many benefits of paying your bills online. I personally do not remember the last time I mailed off a check to pay our bills. By going online, you will not be using envelopes, stamps, and checks as much as it was popular in the past. Automation helps to save money and time and reduce the stress of money management.

We pay all our bills automatically. Our online payment is set up with a local bank and bills are paid out of our checking account. I just have to make sure I added money to that account before the bills are due. Even though I keep an eye on all our transactions, but I never have to worry about being late on bill payments.

2). Consolidate your credit cards debt.

Debt can be a very terrifying issue. When you face thousands of dollars in credit cards debt you do not have enough money to save for retirement or to pay off your mortgage more quickly.

You can save a lot of money and reduce your monthly payments by consolidating your credit cards debt. If you own several credit cards try to consolidate your debt into a single credit card with a lower percentage rate. It will help to reduce interest costs and make your monthly payments more manageable.

One of the best ways to consolidate your debt:

Refinance with a balance transfer credit card
Consolidate it with a personal loan

3). Get cash back when you shop online.

For many of us, it has become so convenient to shop online regularly. That is why we need to turn it to our advantage and learn how to get paid while shopping online. You can sign up for websites like Ebates, Ibotta, Rakuten, and Swagbucks to take advantage of cash-back rewards. All these websites are free to join and easy to use.

If you want to learn how to earn cash back, save money on groceries and travel, I recommend reading the article by Michelle from Making Sense of Cents:

Best Rewards Credit Cards for 2021 – What You Need to Know

4). Negotiate credit card rates.

If you are losing money by paying a lot of interest on your credit cards you should negotiate your current interest rate with your credit card company. It is important to remember that you have some power to negotiate your current interest rate as long as you have been making payments regularly. Call your credit card company and ask for an interest rate reduction.

5). Transfer your credit card balance.

If you cannot reduce your credit card interest rate, try to transfer your credit card balances to 0 percent APR card. Transferring your balances will help you save hundreds of dollars in interest over time.

The Best Zero Percent Interest Credit Cards

6). Move your money into a high-yield savings account.

Most people have their savings stashed in a local bank with a very low-interest rate. The primary reason for that is because it is convenient and close to their homes. Unfortunately, your money will not grow fast over time with low-interest rates.

You can do a lot better by moving your money into a high-yield savings account. Find online banks that are paying interest rates higher than your bank and keep your savings there.

Check out the Best High-Yield Savings Accounts and start earning higher interest right now.

7). Refinance your mortgage

You can save a lot of money by refinancing your mortgage to a lower interest rate. With a lower interest rate, you can get lower monthly payments. And once you reach 20 percent equity you can eliminate PMI – private mortgage insurance.

Refinance rates from Wells Fargo

How to Save Money Shopping:

The next time you are going shopping make sure to apply these money-saving ideas:

8). Stick to your shopping list.

One of the easiest ways to save money is to stick to your shopping list. Do not go shopping if you do not have a shopping list. Creating a list is a great way to make sure you will purchase only what you need. Otherwise, you might go on impulse shopping and spend more money than you have planned.

Stay away from email marketing and do not subscribe to emails from your favorite retail stores. Avoid the chances of spending more money on things you do not need.

9). Stop going to the Mall.

Retail marketing is all around us and it is hard to fight the temptation to shop for new clothes. That is why if you want to save money you should stop going clothes shopping so often. As I said before you should have a plan and shop only for what you need. And stick to your shopping list!

10). Do holiday shopping right after the holidays.

One of the best ways to save money on shopping is to do your holiday shopping after the holidays. After the holidays, the prices go down drastically, sometimes up to 75 percent lower. I often buy party supplies, decorations, wrapping paper, and even gifts a few days after the holiday passes.

11). Clean your closets.

If you have an urge to buy new clothes often, I recommend going through all your closets and see what you might find. Make an inventory of your clothes. Have a yard sale or use craigslist to sell clothes buried in your closet for years.

Another useful trick is to take the clothes from the back of your closet and bring them to the front. After cleaning your closets, you might find your wardrobe looks completely different and you do not need to spend money on clothes right now.

How to Save Money on Food:

Learning how to save money on food and groceries does not have to be complicated.

12). You can save money on food by:

Prepare some meals at home
Cook from scratch
Get a crockpot
Brown bag your lunch
Invite friends over instead of going out
Share meals when eating out

13). You can save more money on groceries if you choose to:

Skip the bottled water and soda
Buy in-season groceries
Plan your meals around your grocery store’s sale
Start a vegetable garden

How to Save Money on Entertainment and Vacations:

If you are planning a road trip or vacation, there are lots of money-saving ideas. Here are a few of my favorite ones:

14). Check out free events in town.

Our town has several wonderful parks, lakes, trails, free tennis courts, and more. Everyone can have fun playing outdoors, hiking on trails, walking around the lakes, or trying any sports activities. And it is all there for free.

Most towns schedule many free events. You can save a lot of money if you want to get free entertainment and free food. What you need to do is just look at your community calendar. Stop by the local town hall or library and ask how to get a list of upcoming community events. I always check out our town’s website to keep in touch with what is going on around us.

You also can save money by replacing cable TV bills with low-cost video streaming.

Absolute Best Cable Alternatives to Watch TV, Sports, Movies and More

15). Pack food for road trips.

If you want to get out of town, take some time to pack meals and snacks for your road trip. Thus, instead of stopping in the middle of the trip and driving around looking for a place to eat, you can just eat on a road. Even better if you can stop at a nice park and have a picnic there. This way you will have fun and save money. Travel service plazas and fast-food chains are conveniently located right off the highways and always expensive, so you better off avoiding them if possible.

16). Use Airbnb when traveling.

For the past decade, Airbnb became hugely popular among travelers as a cheaper alternative to hotels. Vacations are always expensive. The next time you plan on taking a trip, check out to see and compare prices for Airbnb vs hotels. You can save a lot of money by renting an entire house to yourself for a fraction of the hotel cost.

Stay at Airbnb

17). Use Booking.com for travel deals.

Booking.com is one of the best websites in the online booking world.

city of Rome - save money on travel expenses

We like to travel and use this website all the time for booking our hotels because you can find some incredible deals. If we stay at the hotel, we always try to find one with breakfast included in the price. I love hotel breakfast especially when they offer regional specialties. With breakfast included we do not need to start our day trying to find a place to eat and we can take a bagel or pastry and some fruit for our lunch later.

Use Booking.com for last-minute deals

18). Use your AAA discount.

If you are an AAA member you can save a lot of money by using your AAA discounts. AAA travel agency has money-saving offers from cruise vacation packages and hotel discounts to car rental deals. To save more money use your membership card to get a discount anywhere you can.

Use AAA for your travels

How to Save Money at Home and on Services:

There are many ways to save money at home and on services. These tips will help you minimize your household expenses significantly.

19). You can save money at home if you want to:

Try to fix things yourself. You can learn anything you want from YouTube.
Turn off the lights every time you leave the house or the room.
Install energy-efficient light bulbs. Swapping just your 4 or 5 most used light bulbs for LEDs can save you $50 or more a year.
Rent out unused space in your home.
Cut your lawn.
Look for a cheaper place to live.

20) You can save money on services if you choose to:

Get rid of some of your subscription services (meal deliveries, streaming services, etc.)
Cancel unused gym memberships.
Cancel the cable or satellite channels you do not watch. Switch to low-cost cable alternatives such as Netflix, Amazon Prime Video, or Hulu.
Get rid of your home phone and switch to cell phone plans.

Great Article by Internet Advisor: 14 Ways to Save Money When Working At Home

Final Words

We all know that trying to find easy ways to save money can be tough. We have been there before. There are times you feel that you are not making much progress even you have tried everything. However, if you are prepared to sacrifice now and learn about the best ways to save money every day you can reach your financial goals a lot faster.

What are your favorite ways to save money? Share your thoughts and ideas with us in the comments below.

Remember to share this post if it helped you!