If you are an older adult who is now a caregiver for your aging parent, taking care of them can be stressful. You want your elder mom or dad to retain independence, enjoy life, and find fun things to do that keep them physically invigorated and mentally stimulated. But budgeting for seniors is a real worry for retired adults who need to ensure their savings last for the next few decades.
Understanding money management for seniors can help you give good tips to your older parents so they never have to worry about their finances. After all, you want them to relax in their old age — not stress about living on a fixed income.
Money Management for Seniors: 7 Tips for Success
When your parents aren’t working and receiving a consistent income, money must be spent wisely. Understanding the financial ‘allowance’ for monthly spending can make it less worrying to spend money on what really matters, including fun activities, entertainment opportunities, meals out with friends, and necessary bills.
Estate Planning
Older individuals need to have plans regarding their assets, estate, and property for what to do when they pass. For older adults who may have valuable assets, it is imperative to have these details taken care of ahead of time to avoid issues with inheritors or beneficiaries later in the process.
Older adults can help their aging parents create a will, find a healthcare agent, and hire a reputable power of attorney to help with legal jargon. The attorney will be able to help establish rules and regulations that adhere to your parent’s wishes when it comes to their estate, property, assets, valuables, or personal items to be distributed after their death.
Phone Service
Phone service is another bill that many older people often forget about, and it can really rack up over time. Older adults may not know the price of their current plan, how long they have left on their current deal, or if they can get a cheaper deal for their data.
If you find that your older parents are paying more than they need to for phone service, you can help them find a monthly discount, lower price, or deal based on their current needs or government programs. Some government assistance programs, such as the Lifeline Program or Affordable Connectivity Program, offer lower prices for retired individuals.
Create a Budget
This may seem like common sense, but establishing a budget and sticking to it is key to avoiding running out of money, which is a real worry with a fixed income. You can help your senior parents create a budget that incorporates must-haves like food, bills, and insurance, along with ‘extras’ like activities, attractions, and exciting purchases.
The first part of creating a budget is to write down the current fixed income amount. Then, compare the fixed income to the current monthly spending amount. Identify the monthly expenses that are necessary, such as rent, mortgage, retirement home payments, car payments, phone service bills, and insurance.
Create a list of additional expenses that are not necessary for living but important to maintaining a fun quality of life. These expenses include going out to eat for breakfast, going to a nice dinner once per month, going to see a movie once every two weeks, or getting new clothes once per month.
After jotting down the list of expenses per month, you need to help your parents figure out their total expenses and how much they have left in their savings. Determine how much they will spend yearly on their monthly expenses budget — this number will give you the years left until their savings run out.
Consider Downsizing
Although it can be disappointing or depressing to give up a home they have been in for years, consider asking your parent(s) to downsize their home to something more livable. The larger family home might have made sense with kids in the house, but it is impractical and unsafe for an older individual.
An older individual is much more likely to fall or have issues getting around multiple floors, going up and down stairs, or navigating challenging floor plans than a smaller apartment, condominium, one-story house, or assisted living center.
Downsizing helps provide the caregiver with peace of mind AND makes it easier for the older parent to move around their house, access necessary areas (e.g., kitchen and bathroom), and save money in the long run.
Preventative Healthcare
Preventative healthcare services can extend seniors’ lifespans, helping them look and feel better as they age. Getting older can be physically and mentally tough, as older individuals might feel like they can’t do what they once could. If they are not as active, it is harder for them to build bone density, remain physically fit, and continue doing activities they once loved.
Preventative health care helps seniors lead longer, more exciting, fulfilling, and healthier lives. Joining wellness programs can help your parents stay healthy and fit, reducing costly healthcare needs later in life.
Debt Management
Paying off debts is a must for people of all ages, especially for aging individuals who must pay off high-interest debts to avoid ‘wasting’ hundreds of dollars per month. For example, the average annual percentage rate for credit cards is more than 20%. Therefore, a debt of $500 on a credit card will rise to $600, making it harder and harder to pay off in a reasonable time frame.
Eat Meals at Home
This might sound like common knowledge, but sometimes seniors need help grocery shopping, figuring out what to eat, or cooking for themselves. If your parents are still independent and active, encouraging them to go grocery shopping together to purchase healthy food, cook meals together, and eat at home is great budgeting for seniors.
Use a Professional to Help
Budgeting for seniors can be hard when you do it yourself — but you don’t have to go at it alone. Living in a senior residential community that provides personalized care and community for older adults can help caregivers with peace of mind.
Elder Care Alliance offers age-focused apartments for independent residents, skilled nursing teams, memory care programs, assisted living aid, care coordination, and life enrichment programs to help senior individuals flourish in their older age.
