When seniors sit down with our credit counsellor they are often looking for that second set of eyes, an unbiased opinion or advice without emotions attached. “Are my living expenses too high?”, “Should I be spending less on entertainment?”, “Am I spending too much of my savings?” The answers to these questions are not black and white, and require us to closely look at the person’s budget and ask, “How do you want to live your life?”
By creating a monthly budget, you are able to determine if you are overspending or under spending, allowing you to make necessary changes to help you live within your means and prevent a financial crisis. It is important to remember that budgeting is not about penny pinching, it is about being in control of your finances and having vision.
Sit down and think about how you want to live your life. What makes you happy and brings you joy? What do you want to accomplish in the next five years? What legacy do you wish to leave behind? Now take a look at your budget and consider how you can change your spending habits to accommodate this vision.
There are many ways to cut back on expenses whilst continuing to live well. Let’s begin by looking at essential expenses: those things you require to survive. Housing is usually one of the larger expenses; you may want to think about a roommate, not only could they help you save money, but also offer companionship. You can also lower costs by trading in the high maintenance house/yard for an apartment or mini home, possibly even in an area where you can walk to shopping and entertainment.
Groceries and medications can add up. Be sure to do your grocery shopping on days when senior discounts are available, look for sales, and consider buying in bulk and splitting with a friend. When you require a medical prescription let your doctor know if you do not have a medical plan, and always ask your pharmacist if a less expensive generic brand is available.
Cutting back on non-essential expenses may appear easier, as these are things you do not require to survive. You do however require good mental health, and it is important to have fun and be social so consider low cost alternatives. Instead of going to the movies borrow one from the library, look for free community based classes and activities, shop at second hand stores or during sale seasons and eat out at restaurants that offer discounts to seniors.
Small changes can have a large impact on your budgets bottom line, allowing you to take that vacation you always wanted, leave something behind for the grandchildren, have an emergency fund and be healthy and happy!