Q: How can I help manage my money better when inflation has prices rising and my income is fixed?
A: The rising prices of everything from groceries to gas are squeezing budgets tighter. Yet, for most older adults their income is staying the same. According to the National Council on Aging, over 15 million Americans aged 65+ are economically insecure. That means their income is at or below 200% of the federal poverty level (FPL). For a single person that income is $25,760 per year or less.
Many more older adults who have higher incomes are still struggling to make ends meet. Especially in California, where the rents and cost of living is higher, older adults are struggling financially.
The annual acceleration rate in the US rose in May to 8.6%, the highest level since 1981. No doubt you have felt that when you see your bill at the grocery store. Most all areas of business are increasing their prices to keep up with their higher cost of goods. This hits the consumer directly and is felt most severally by those who have tight budgets with little room for extra costs.
When bringing in more income is not an option, then budgeting and spending carefully is necessary to manage your household. The first step is to create a monthly budget if you do not already have one. Make sure to include all expenses for the month, even small amounts like a trip for coffee or small drug store purchases should be included.
Only when everything is written down in front of you can you really get a picture of your expenses and start to decide how much you can afford in different categories. Sometimes this process alone helps highlight areas where you can cut costs. Perhaps you are spending more on TV for channels you do not use, or are paying for subscriptions you are not using.
The largest expense is usually housing. Consider renting a room if that is an option or sharing an apartment with a friend to reduce your expenses. This will also help you by splitting utility costs.
However, if shared housing is not an option, then look for areas where you can save money. Buying some food items in bulk will reduce the cost per item. If you cannot afford to buy that much all in one month then consider asking a friend to shop with you and split the bulk items up between both of you.
Freeze items you can’t use right away and then make meal plans so you do not forget to use them in a timely manner. Compare brands and consider generic brands that have lower costs. Clip coupons and go to the store with a list to keep you on track with your budget.
Call and ask if any discounts or lower prices are available on reoccurring bills and subscriptions, such as phone and cable. Even your car insurance may have discounts available if you ask, depending on your mileage and your driving record.
You can also call the Benefits Enrollment Center at the Ventura County Area Agency on Aging and to see if you qualify for any programs such as CalFresh (formerly known as food stamps) to help reduce your costs. They can evaluate your health insurance costs as well and look to see if there is a lower cost Medicare plan. You can reach them at 805-477-7300.
The increasing costs will no doubt cause anxiety about your finances. The best thing you can do is to evaluate your spending and be proactive to make changes as needed. While you cannot control inflation, you can control how you react and adjust to it. It may not be easy, but there are probably some things you can do to help manage the current costs.
Martha Shapiro can be reached at Senior Concerns at 805-497-0189 or by email at email@example.com.