In many ways, creating a budget for a senior citizen is the same as creating a budget for a younger person. Successful budgeting means living within your means and saving money where you can, no matter what your age. But senior citizens can face some additional challenges not shared by their younger peers. Those challenges can make smart budgeting practices even more essential.
Make a list of all your sources of income, including your monthly Social Security check, pension payments, money from an annuity and wages from a part-time or full-time job. Total these figures to get your monthly available income.
Factor in the property taxes you pay if you own your own home. If you pay your taxes annually or semiannually, break them down into a monthly figure and subtract that from the total monthly income. Property taxes can be a real hardship for senior citizens. By factoring them in upfront, you can more easily see their impact.
Create a list of all your essential household expenses, including the cost of your rent or mortgage payment if applicable, electricity costs, water and sewer service and heating costs.
Make a list of your other monthly costs, including things like cable TV, telephone service and Internet service. List each expense separately, then look at the details of each service to see if you can save some money. For instance, if you use your cellphone infrequently, you might be able to save money by changing to a pay-as-you-go plan. You may also be able to save money by switching to a less costly cable plan.
Subtract your total expenses, including the monthly cost of property taxes, essential things like utilities and the important extras in your life, from your total monthly income from pensions, Social Security and wages. This is the total you have to work with each month after your expenses are met.
Strive to put at least a small amount of money aside each month in savings. Building up an emergency fund will help you deal with unexpected situations that may arise, like the breakdown of your car or an urgent home repair.
Assess your medical and prescription drug costs and look for programs that help seniors pay for their medications and other health-care expenses. A number of states have programs to help low-income seniors deal with the high cost of health care.
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