Higher than normal inflation squeezes everyone's budgets, but it can hit older adults on a fixed income harder than most. Even the basics, such as food, gas and housing, spike during times of high inflation. Learning how to handle high inflation rates is important to make your retirement savings last.
When prices suddenly increase, you might need to adjust your current budget. If you haven't already created a written budget, start one now with all sources of income and your recurring expenses. Estimate how much you spend on variable expenses, such as groceries, clothes and gas.
If you already have a budget, look at recent spending and changes in fixed bills due to inflation. Shift the way you allocate money if needed to cover higher expenses in certain areas. For example, if you're spending more on groceries, you might need to move money from your clothing category to food. Check your budget regularly to see if you need to make more adjustments.
Look at your investment portfolio to ensure you're making the most of your savings. A financial advisor can help you check up on your investments and diversify them. They can look at how quickly you're drawing money from your various accounts and whether you need to make adjustments.
When you're retired, the last thing you want to do is go back to work. However, it might be necessary to make ends meet if inflation is stretching your budget too much. A part-time job can give you an extra boost to cover increasing costs. Working a part-time job can also help you socialize and keep your mind sharp. Another option is to offer your skills on a freelance basis. If you're a retired graphic designer, you might offer freelance graphic design services, for example.
You can also bring in extra money by selling items you no longer need. If you're downsizing or moving into an assisted living community, selling items is a good way to prepare for the move and earn extra cash. This option is typically a short-term solution since you'll eventually run out of things to sell, but it can help you build an emergency fund.
As prices increase, every spending decision becomes important. Even small purchases add up quickly and can throw off your budget. Look for easy ways to decrease your regular spending, such as canceling memberships or services you don't really need. Instead of making spontaneous purchases, wait at least 24 hours to see if the item still seems like a good idea. Tracking your spending can help you spot areas where you can cut back.
Traveling is a popular pastime in the retirement years, but during periods of high inflation, scaling back on how much you travel can save money. You might hold off on this year's vacation or choose a location that's closer to home and more affordable. Visiting spots near Monument, such as Garden of the Gods, Monument Rock and Pike National Forest, allows for fun close to home to save money.
Spending more time at home can help when gas prices skyrocket. Bethesda Gardens Monument offers lots of on-site amenities, so you can enjoy your free time without wasting gas. On-site pharmacy, therapy and salon services let you take care of tasks within the community. You can also participate in cultural outings, enriching activities, exercise programs and other activities to stay busy.
You might qualify for state or federal assistance programs to help with basic expenses, such as utilities and food. Local food banks can be a resource, as can programs designed specifically for seniors, such as Meals on Wheels. If your healthcare expenses are stretching your budget, programs, such as Medicare Extra Help, can provide financial assistance. Extra Help can help you cover your Medicare prescription drug costs. There are also Medicare Savings Programs that can help cover costs associated with your Medicare coverage.
If you have lots of debt, paying it down can help you in the long run with high inflation rates. This is especially true of debts that have variable interest rates, such as variable-rate mortgages or lines of credit. If the interest rate climbs, your monthly payments will also jump significantly, which puts a strain on your budget.
Housing and auto expenses often take up a large part of your budget. Making a few changes can help you afford your living expenses better. Downsizing to a smaller home is one option. Moving to an assisted living community can also be a smart move. Many expenses are covered, including utilities and internet, and you get access to all the amenities. This can eliminate some monthly expenses, such as paying for a gym membership to stay active or hiring a house-cleaning service.
If your vehicle gets poor gas mileage or has special maintenance requirements, consider trading it in for something more economical. You might be able to get rid of your car completely if you move to Bethesda Gardens in Monument, as scheduled transportation is provided for appointments and shopping.
Preparing for inflation can make it easier to weather the financial strain. Making adjustments when high inflation rates hit can also keep you financially stable.