Living within your budget

Xmas is only a few months away and you may be faced with mounting pressure to get your financial house in order before the festivities overwhelm you. How do you keep or get your finances under control when you don’t have a big enough income?

While first review your net income and your monthly expenses because this is the only way to understand your situation and take steps to fix it.

In our workshop on Financial Literacy for Seniors, we talk about budgeting. Making a budget is creating a plan for your money. The reason many of us get into trouble is that we don’t know where our money is being spent and how much we earn. By creating a budget, you will quickly see if you have all your bases covered.

What happens if you cannot pay all your bills with the income you are getting? This happens to many seniors who are used to a regular income and find when they retire, the income they have has dropped, but they have not changed their lifestyle.  There are some options available but knowing what how much money you need should be your priority. Doing nothing will only set you back further.

Unfortunately, life has cycles, some good some bad, you may find yourself in a bad situation, but it will not last.  We prosper, we fall behind, we prosper, life happens and we lose, then we win again. You are in control and what you do for yourself for financial stability is what allows you to win again. Here are some ideas to help you move back to the winning circle.

Communicate with Creditors

Do not ignore a bill until you have enough money to pay even the minimum amount on it. Contact your creditors and explain your situation. If you explain to them that you’re falling on hard times and not earning enough money but working to the budget and prioritize your bills and have an action plan (even if it is minimum payments) they most likely will be happy and you may not be subjected to nasty phone calls or emails demanding payment.

Lower Your Expenses

You don’t have enough money so you must sacrifice. For many of us, we spend most of our income on mortgage or rent. You may have to consider selling your house if you are renting you may consider getting a roommate or moving to a cheaper rental accommodation.  We should not be afraid of what will happen, we should be afraid of not taking action while we are able.

Make More Money

Earning more money may mean taking a second job. This income may make the difference between paying your debt off on time and making sure that you keep your roof over your head. You can go to the food bank if needed. No one is above struggling financially and you will do what you need to do to make sure you end up ahead.

Long-Term Plans

Your short-term plan is to make ends meet and balance your budget. As a senior, you are on fixed-income.  There are people who have disabilities and for health reasons can’t get that second job however they find ways to earn a bit more on the side when they can. This is not easy, you may not like what you can and can’t do on a limited income, but once you figure out your situation you are taking the first step to improve.