As we get older, managing our finances effectively can become challenging for a variety of reasons. Mismanagement of funds can become a major problem for seniors on a fixed income.
People can no longer rely on a pension they way they used to, with a large portion of seniors not having the security of a pension plan as a source of income after retirement.
Implementing smart financial planning, as far in advance as possible, can really help stretch those dollars and offer some peace of mind.
Money Management Suggestions for Seniors Ottawa
There are several recommendations and practices that can be followed to help seniors manage their finances.
Some financial tips for older adults, include:
- Create a budget
- Stay practical
- Fraud protection
- Research your options
- Low impact income
- Make a future financial plan
Create a Budget
One of the first steps towards successful financial management for seniors is to create a feasible budget. Try to be realistic, to make sticking to the budget you have constructed as attainable as possible.
For most people after they retire, income tends to drop off considerably. This means adjustments are necessary to make ends meet.
Lowering expenses is a good way to make this happen. Try to cut out any unnecessary costs to make your money go further.
Once your budget has been established, it will likely take some practical thinking to adhere to it.
For instance, many seniors have adult children that are struggling financially. The first notion is to assist them by giving them money. This is not a practical decision for seniors on a budget.
Even though it can difficult not give money to a son or daughter in need, your own needs also should be taken into account.
Seniors are often heavily targeted in online scams and fraud. Older adults are generally targeted because of poor security and trusting nature.
Fraud protection can be implemented through education, and account alerts for any unusual activity.
Debit and credit cards can also be limited to only be operational within a certain radius.
Education about fraud and identity theft can be a very helpful method of prevention. Some government tips for protecting your digital information can be found on the Government of Canada website.
It is also recommended to be extremely wary of any door-to-door salespeople or telemarketers.
Research your Options
The more you know about your financial situation and the options within it, the better.
Smart investments can help provide financial security, while unresearched investments have the capacity to cause stress and financial ruin.
Low Impact Income
There are many ways for seniors to earn income after retirement. The internet opens up a huge array of possibilities for earning a little extra income.
You may offer your knowledge and experience as a consultant in your field.
Many older adults go the entrepreneurial route after retirement, starting their own businesses for some additional income and professional satisfaction.
Future Financial Planning
Making a solid financial plan can help take out some of the guesswork and worry about your financial future.
Some of the areas to address might include:
- Insurance & Taxes
- Investments & Assets
To make a workable financial plan for the future, you should be taking into consideration the income you are earing now, and how/if that income will change in the future.
Take stock of all current and potential sources of income, including government benefits.
You can then get a better idea of how much income you will be bringing in and if it is enough to live on. If not, you can then explore options for earning additional income.
Your total expenses can then be weighed against your total income to see if they are covered now, and will continue to be covered in the future.
If it looks like your monthly expenses will become greater than your monthly income, then adjustments will be needed. This can be done by cutting out superfluous costs, or by finding new sources of income.
Insurance & Taxes
With age, insurance coverage becomes fundamental. It is a good idea to talk with a professional to find out exactly what kind of coverage will benefit you and your loved ones most.
Seniors may eligible for special tax breaks and should be fully informed about all tax options.
Investments & Assets
All investments and assets should also be included in total financial worth. For an accurate future assessment, assets and investments should be appraised for their current value, as well as predicted future worth.
Further information about financial programs and services for seniors can be found here.