Surviving with Stagnant Funds: Insights into Life on a Consistent Budget
Living Well on a Fixed Income: A Savvy Guide
Grinding away at that fixed income can feel like a never-ending battle, but who needs that stressed-out life? Crack the code to a solid financial plan, and learn to bask in the glow of comfort and security, right here!
Know Your Income
First things first: Figure out where your greenbacks are coming from. List your sources of income like a champ: part-time gigs, Social Security, SNAP benefits, pensions, alimony, you name it. With monthly income like Social Security, it's a cinch to track – just jot down the amounts you collect each month, and don’t forget to factor in occasional lump-sums like annual interests or annuities[1].
Needs & Wants: Make Barracuda-like Decisions
Understanding the difference between primary needs and mere wants is essential in forming a solid budget. Simply put, your needs are the basics you can't live without, like your rent, groceries, utilities, meds, and transportation. Wants, on the other hand, are the luxuries or wants you… well, want, but can live without. Swap out that fancy steak for a cheaper burger if you gotta, and you'll be squared away!
Budgeting: The Key to Financial Freedom
### Step 1: Focus on Needs (Primary Avoid Beans)Slip your needs into your budget first, because… you know, beans and rotten eggs aren't a dream meal, mate. Prioritize essentials like rent, groceries, meds, and utilities[1].
Step 2: Estimate Variable Expenses
Unpredictable expenses, like electricity bills, can take you by surprise. To account for these, use an average from the past 12 months and divide by 12. That'll give you a budget for your variable expenses, and a nice chunk of change leftover for Steve's 87th birthday bash[1].
Step 3: Cover Wants with What's Left
Now that you've got your needs covered, use your leftover income for those wants you've been dreaming about. Eyes on the prize, mate, but remember to be frugal since you can't out-budget forever!
Emergency Fund: Your Financial Birth-control Pill
You never know when you'll wake up one morning with a flat tire or find out you need an emergency root canal. With an emergency fund, you can have the peace of mind knowing you're financially covered and can keep on trucking down life's highway[1]. Stash away enough to cover between 3-6 months of basic living expenses, and you'll be in tip-top financial shape[1].
Put Your Plan into Action
Wrote it down? Done deal! Following through on your written plan will keep you focused, and you'll feel like you're in control of your finances instead of being a slave to them. Be willing to tweak your budget as necessary. It may take a few iterations to find what works best for your situation[1].
But remember, flexibility is key. You may have to cut corners on your wants (sorry, dreams of that tropical Hawaiian vacation may have to wait) to ensure you can afford those crucial needs[1].
Set Goals: Chasing Rainbows AND Gold
Think long-term when it comes to your budget. Setting achievable financial goals will make your budget more meaningful and help you see the big picture[1][3]. It's time to nail that budget like a pro and watch your financial stability soar!
Additional Resources
Looking for more info? Fear not, mate! Check out these resources to shake up your fixed income game[1][3][5]:
Ohio Department of Aging
*aging.ohio.gov*
Type "fixed income" in the search bar and prepare to be enlightened on all things fixed income.
Area Agencies on Aging by Region
*aging.ohio.gov/FindServices*
Ohio State University Extension
*extension.osu.edu*
Use the “Ask an Expert” link to fire off any questions about living on a fixed income you might have.
Ohio State University, Family and Consumer Sciences
*fcs.osu.edu*
Click on "Programs" then select "Healthy Finances" for tons of helpful classes and tools.
National Council on Aging
ncoa.org/article/savvy-seniors-financial-education-toolkit
ncoa.org/economic-security/money-management
References
FTC (Federal Trade Commission). n.d. "Making a Budget." Consumer.gov. Accessed April 29, 2022. consumer.gov/articles/1002-making-budget
Green, Rita. 2016. "Steps to Successful Money Management." Mississippi State University Extension. PDF. extension.msstate.edu/sites/default/files/publications/publications/p1738.pdf
Green, Rita. 2018. "When Your Income Drops." Mississippi State University Extension. PDF. extension.msstate.edu/sites/default/files/publications%20//P1618_web.pdf
Hart, Melanie, Candace Heer, Lauren Jones, Cäezilia Loibl, and Kathy Michelich. 2019. "Manage Your Money, Lessons 1-5." Ohio State University Extension.
Wofford, Richard. 2022. "Counting Your Money Calendar." Extension Publishing.
The Money Coach. (n.d.). 9 Steps to Creating a Retirement Budget. moneycoachisrael.com/9-steps-to-creating-a-retirement-budget
The Penny Hoarder. (2017). How to Budget: A Step-by-Step Guide. thepennyhoarder.com/finance/budget-guide
[1] https://www.ncoa.org/article/savvy-seniors-financial-education-toolkit
[2] https://www.ncoa.org/economic-security/money-management
[3] https://ask.extension.org/questions/643227
[4] https://extension.msstate.edu/sites/default/files/publications/publications/p1738.pdf
[5] https://thepennyhoarder.com/finance/budget-guide
- By understanding your sources of income such as pensions, Social Security, and part-time gigs, you can create a personal-finance plan that accounts for your monthly income.
- When budgeting, it's important to prioritize needs like rent, groceries, meds, and utilities, then cover wants with what's left. This strategy can help you maintain financial stability and achieve your personal-finance goals.
