Handling finances can be quite daunting from budgeting and savings right down to investments and preserving the assets. There are a lot of areas to cover and moreover, as a senior getting a grip on various financial aspects may seem like an uphill climb.
The costs of long-term care can deplete a life savings account in the blink of an eye. Therefore, it is important to know how to manage money effectively.
According to the U.S. National Retirement Risk Index (NRRI), more than half of today’s households won’t have enough retirement income to maintain their pre-retirement standard of living, even if they work till the age of 65. The Employee Benefit Research Institute indicates that among workers of age 55 and older, about 60% have saved less than $100,000 for retirement, and 24% have saved less than $1,000.
This makes it even more important for one to know the nuts and bolts of financial management.
Here are the top four financial tips that will help you manage your money effectively.
According to Tracy Ann Miller of Red River Advisors, 65% Americans don’t have a budget. Budgeting is essential for getting your finances in order and to do so, you’ll need to track your income, the expenses you make, and the amount you have left over for each month.
Follow these simple steps to manage your money better:
- Organize your monthly income by creating a list of the sources from which you earn your pay.
- Save all the cash receipts.
- Organize your cash expenses, monthly bills, and credit card charges by making a list of them and categorize each item that you have bought under ‘need’ and ‘want’. This will help you understand the importance of needs and also have a better control over your money.
- Organize all your medical expenses by making a list of them.
- Add them all together in order to build your monthly income and spending statements
2.Learn About Benefit Entitlements
Make sure to learn all about the below-mentioned programs:
- Social Security Retirement Benefits
- Supplemental Security Income
- Social Security Disability Insurance
- Elderly Pharmaceutical Insurance Coverage (EPIC) Program
Educate yourself regarding the benefits you are entitled and take time out to understand bond funds. Additionally, consider opting for long-term care insurance. This will help protect your assets after your health insurance runs out. All of these programs will help you manage your finances more conveniently.
3.Protect Yourself from Fraudsters
Not being vigilant can make you a target of financial fraud. Therefore, it is important for you to educate yourself regarding scams, frauds, identity thefts, and financial abuse. By making yourself aware you avoid falling into a trap and becoming a victim.
For more information try the Certified Financial Planner Board of Standards Financial Self-Defense Guide for Seniors.
4.Get Information from Right Sources
- Hiring a good financial advisor is helpful in making effective financial decisions. By having someone trustworthy by your side gives you the ability to stay updated on all the information regarding financial matters.
- The AARP (American Association of Retired People) offers free financial advice to its members.
- Contact your local area agency on aging to find out about free financial seminars. Libraries, senior centers, universities, and other community buildings host free financial planning events from time-to-time.
- The federal government provides free tax advice for the elderly on a year-round basis.
By keeping the aforementioned tips in mind, you will be better able to manage money. Moreover, developing these skills will save you from financial distress and enable you to be prepared for the unexpected. Implementing these tips are essential to living a fulfilling life.