Living on a fixed income
Living on a fixed income can be a tough thing to do, especially in the current economy. Here are a few tips to help a person or family live on a fixed income.
Have a budget
One of the most important things for a person to do when they have to live on a fixed income is to have a budget. A budget can help a person control and keep track of their spending each week, month, and year. This is always an important thing to do in personal finance, but it is especially important when a person, or family, has to live on a fixed income.
To make a budget a person will first need to write down how much money they have to spend each month. Then they will want to write down all of their expenses. Expenses include any bills and other payments, food, living expenses, gifts, entertainment, etc.
After listing all of the things they spend money on each month, a person will want to make a column of how much they actually spend on each of those items. When the list is complete it is time for a little addition. If the person adds up the amount they spend each month and it ends up totaling more money than they have coming in they need to see what they can cut from their spending.
Keep track of spending
Sometimes it can be difficult for a person to stay on budget each month. A lot of people spend money here and there and forget that they spend it. This money can really add up and that can be dangerous for a person living on a fixed income.
One way to help remedy this is for the person to keep track of their spending. They can have a small notebook with them at all times and when they spend money they can write it down. At the end of the week and/or month they can look through their notebook and add up how much they spent. They can compare that to their budget and see if they have spent extra money.
Where can you save?
If a person sticks to their budget each month they should be able to live pretty well on their fixed income. But when the prices of things increase it can really upset a fixed income budget. And no matter how hard the person or family tries to stay within their budget they will not be able to. However, there is still a way for a person to live on a fixed income; they may just need to be a little more creative.
Looking for ways to save on the things they need to buy each month is one great way for a person to continue living on a fixed income even though prices are increasing. For example, planning meals using the local grocery store's weekly advertisement is a great way for a person to save on food. And clipping coupons is another good way to save money on food and other household items. It can also be a good idea to stock up on pantry items when they are on sale.
Another option for a person living on a fixed budget is to see what things they can cut out from their spending. When prices increase and they save where they can save this can be another option to help a person cut their spending. Many people have extra things that can go. For example, perhaps they can wait a week or so to get their haircut instead of getting it cut more often. This can end up saving them the cost of one or two haircuts a year.