As one retires, one finally gets the free time one had always wanted, to enjoy the golden years of one’s life. However, living a retired life comes with its own set of challenges, the biggest one probably being the lack of sufficient income. Many people may get a pension during their old age but that is not true for everyone, and even then, managing to live on a fixed pension is also something that needs some effort. When it comes to the best financial tips, one size does not fit all, as every individual has varying needs as well as the capital that they have saved. Seeking professional advice when it comes to money management tips is always the better idea. But to help you out, here are some basic tips for money management that can go a long way in helping senior citizens sort out their finances.
1. Track Your Expenses and Plan a Budget
The foremost tip for money management is to make a retirement budget and a plan for spending, factoring in all the contingencies. It is very important to expect the unexpected and plan for everything possible.
One of the best budgeting tips is to be realistic with the budget. Unless you have planned very carefully in the early years, your retirement income will most probably not be equal to your income during your peak earning years. That is why limiting your present expenses is the best financial advice for the elderly, as a tight comprehensive budget will allow you to maximise your retirement corpus.
Another important tip for money management is to monitor the budget and stay on track.
2. Financial Literacy
Another one of the important personal financial management tips that can help you a lot is to keep learning about finance. Financial literacy can help you make more sound investments, enhance your money management skills, and result in greater wealth preservation.
However, this does not mean that you need to suddenly turn into an economics mastermind. Keeping an eye out for the best budgeting tips and staying updated about the most ideal ways to invest your money should suffice. Along with this, understanding the risks involved in different types of investments can also help you get better returns on your investment.
3. Automate Financial Tasks
One of the top financial tips that can make your life easier as you enjoy retirement is to automate your finances to streamline them. Automate all your income from your pension funds and other sources and direct them towards any payments or investments you need to make.
Arrange for all your regular bills and payments to be directly debited from your account on a day that suits you best. Make sure you build in a buffer zone into this plan, so that even if an expected income is delayed due to any reason, you don’t have to worry about pending payments.
4. Reconsider Your Generosity
This is one of the harsher tips for money management, but you need to rein in your generosity. Providing financial help to your children and grandchildren is a delicate matter even at the best of times. You, of course, want to be able to help your next generation get the best start they can, but you also don’t need to feel guilty about placing your interests first.
So, protect your financial well-being first, and then consider if and how you can help your family members. This doesn’t mean that you need to completely stop helping anyone; just make sure you do it keeping your own best interests in mind.
5. Consider Setting up a Power of Attorney
A good tip for money management is to establish a power of attorney. It can be quite important. A power of attorney allows one of your family members to manage your financial affairs in a situation where you are unable to do so. It can be for a temporary situation like when you are incapacitated after a minor accident or for a longer time in case you start suffering from cognitive issues. A power of attorney helps make certain that your wishes are respected while you are alive, but not in the right condition to communicate them.
Another important money management tip is to consider appointing more than one power of attorney to mitigate the risk of fraud.
6. Secure Your Health Expenses
One more thing that you need to realise is that healthcare and general medical costs are the biggest expenses that you will have to contend with. Unexpected medical issues can tip your budgeting in a heartbeat.
Having proper health insurance in place is the best personal money management tip you can keep in mind. And when you are planning your budget, take all your existing medical expenses into account but also consider inevitable costs that may crop up in later years.
A basic thing that you can remember here is to hope for the best and stay prepared for the worst.
7. Avoid Keeping a Lot of Cash at Home
A very important financial tip is to ensure that you do not keep a large amount of money at home in the form of cash. Similarly, carrying cash can also be quite hazardous, as a debit or credit card minimises the liability you face in case of wrongdoing. Also, when you switch to using online payments and cards for making your purchases or paying bills, your expenses are also easy to track. On the other hand, a large wad of cash is not exactly traceable. If you misplace it or if it is stolen, there is not much that you would be able to do.
8. Be Vigilant
Targeting the elderly is a very common tactic used by scammers and con artists. They may try to get you to donate money, try to sell you fake prescription medicines, ask for personal information under some guise, or pretend to be family members in trouble, asking for money. There are many ways in which a dishonest person might try to scam you, so it is very important to be vigilant. Avoid making purchases from unknown people and do not give strangers any information, unless you can verify their credentials beyond doubt. In fact, as an important personal finance tip, always be wary and sceptical about any offer you receive where you have not initiated contact.
9. Make a Will
This is not a pleasant financial planning tip but still quite important. Facing your own mortality is never easy but making a will offers you peace of mind in knowing that your funds will be used and disbursed exactly as you intended.
10. Get Help
There is nothing wrong with accepting that you need assistance at times. You can opt for elder support services that can assist you with your day-to-day life, from daily tasks to emergency situations.
Emoha Elder Care is committed to helping the elderly live comfortably during their golden years, providing them complete assistance and elder caregiver support along with community-driven engagement. For us, it is always #EldersFirst