When it comes to thinking about personal finances, most people simply don’t want to think about it at all. A 2015 Consumer Financial Literacy Survey found that only 40 percent of American adults “have a budget and keep close track of their spending.” That means that the vast majority of grown ups in this country (60%) do not actively participate in their financial and retirement planning processes.
But just because you’ve spent a good portion of your adult life without taking an active role in your finances, doesn’t mean you can’t start participating now. There are plenty of retirement planning services that provide financial help for seniors, but we’ve compiled some free advice for seniors who need to get their finances back on track.
1. Track Your Spending. You can’t figure out what you may be able to save if you have no idea what you are spending. Start by creating a spreadsheet that tracks your spending. You can start by entering in your fixed costs--all of your monthly bills, mortgage payments, insurance payments, etc. Then commit to only using cash for one week. Track every dollar that you spend and save the receipts in order to enter it into your spreadsheet. From groceries, gas, meals, coffee, snacks, social events and personal spending, be sure to keep track of all of it so that you can accurately gauge how much you are spending on a monthly basis.
2. Create A Budget. Once you know what you are spending your money on, you can break all the expenses into two categories: wants and needs. Sure, you want that fancy coffee from Starbucks, but do you need it? If you’re not saving much on a monthly basis, then you are probably not contributing to your retirement fund, which could be argued is more of a necessity than fancy coffee. If you are already retired, the same logic applies, as you are now living on a fixed income and retirement planning doesn’t always cover unintended medical emergencies.
3. Keep An Eye on Your Credit. When it comes to seniors and finances, the unfortunate reality is that many scam artists target seniors through a variety of schemes in order to get money from them. A great way to monitor the health of your bank accounts and keep an eye out for identity theft is through monitoring your credit.
4. Build An Emergency Fund. While the bulk of your retirement planning was hopefully done earlier in your life and career, it’s never too late to build a nest egg for emergencies. A 2016 Bankrate.com survey on American finances found that only 37 percent of people would be able to cover a $500 or $1000 emergency expense by dipping into their savings and 23 percent would be able to divert spending from somewhere else in order to pay that expense. That still means that nearly 40 percent of the population are gravely financially unprepared when it comes to an emergency. So while you may be able to get by on a daily basis with the money you’ve put away for retirement, you might be shocked to find that a hospital bill could bankrupt you down the line.
5. Get educated about money. Most people mentally check out when they hear the words “financial planning” or “retirement planning,” but a major component of achieving proper financial help for seniors includes understanding exactly what kind of financial help you need. Becoming financially literate entails educating yourself about all of your options and understanding exactly what is happening to your money. Forbes recommends the following books to help seniors and finances get back on the same page:
- The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions According to Forbes, the author (and Schwab daughter) Carrie Schwab Pomerantz, “does an excellent job addressing the financial issues many face in this time of life from putting kids through college to realistic ways you can still save for retirement if you really haven’t started yet.”
- The Truth About Money Forbes credits author Ric Edelman with providing a “a roadmap to help you understand your money and finances.”
- The Richest Man In Babylon This was a Forbes pick for people who prefer reading fiction, as author George S. Clason helps to teach you “wisdom for financial success through parable-like short stories set in ancient Babylon.”
It’s Never Too Late To Get Active About Money
Money can be a great source of anxiety or provide you with incredible freedom. It’s really up to you. Financial help for seniors is widely available, you just have to be brave enough to ask for it.