Managing Your Budget on Fixed Income

June 30th, 2008  |  Published in Retirement  |  Comments Off on Managing Your Budget on Fixed Income

If you are retired and living on a fixed income, it’s very important for you to manage your expenses so that they don’t exceed your income. This underscores the importance of budgeting because you have a smaller room for error. A classic budgeting strategy is to establish a baseline by recording everything you spend (using a paper notebook is a cheap and effective way to accomplish this) for a few months. In a few months, you should be able to establish the fixed portion of your budget – how much you spend on food, rent/mortgage, car expenses, etc. After a few months, you don’t have to track everything down to the penny but it still helps to keep some sort of budget.

If you find that your budget is close to your income, you can try reducing how much you spend or taking on a part time job for supplemental income (or just for something to do). It’s becoming very popular for retirees to be paid for volunteering. Paid volunteerism, even if it’s a token salary, puts value on the work the retiree performs – it makes organizations take the volunteer more seriously even if they are only paid a small amount.