Facing inflation while on a fixed income is daunting, but there are steps you can take to help your … [+]
For many retirees, inflation has hit them at the hardest point in their lives. Since they are no longer working, they don’t have the income to make up for the increased cost of living that inflation has caused. While the Fed is hoping to calm inflation by raising rates, retirees and those living on a fixed income still need to adjust and deal with inflation in the meantime. Although the current circumstances may feel that they’re beyond your control, there are steps you can take with your finances to be proactive.
You can’t know what prices have gone up in your life if you don’t have a good understanding of what you’re currently spending. Take a good look at your budget, including your expenses, and see what has increased over the past few months to a year. You’ll likely see an increase in the price of food and gas due to inflation, but there may be a creep up in other area including your utilities and household expenses.
When you’ve got a good understanding of what you’re spending, take stock in what you may be able to cut down on. Perhaps you’re currently paying for multiple streaming services, when you may only be using one. Or, you might be paying for a music streaming service when a free app could do the trick. If you’re frequently buying books, try switching to borrowing books from the library instead.
To cut down on your food costs, see where you’re spending the most and where you could potentially make changes. If you’re spending a lot on meals out, try switching to precooked meals from a store, which are still convenient but less costly than takeout. Or, try cooking simple meals if you’re able to. Making a simple meal plan for your week can help you plan out your meals, stick to a shopping list and budget for your groceries at the same time.
When food shopping, you may be able to compare the cost of what you typically buy at different grocery stores by looking at their prices online or on an app. You can also use coupons or couponing apps to save money on products that you use, or even make cash back on the items that you generally buy.
Senior couple payings bills inside home
If you’re struggling with your fixed income, there’s no shame in asking for help. If you need help with budgeting or if your retirement strategy isn’t working for you, get help from a financial advisor. When you find that you’re not drawing out enough from your investment accounts to keep you afloat during inflationary times, you may need to change your investment strategy. A financial advisor can help you with determining the best path forward for this process.
If you can’t make your bills there are programs that can help assist you with your mortgage or rent, your energy bills, and more. There are additional programs that can help you with income assistance and food, so use the programs that are there for you.
While Social Security does adjust for cost of living, which includes inflation, there is generally a lag between when inflation hits and when you’d see the adjustment, so hang in there.
Disclosure: Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
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