Essential Financial Advice for Seniors

While getting older can seem scary and stressful, it doesn’t even need to be a bad thing. It can be a fantastic time of life. But, paying attention to financial advice for seniors is important too, as financial stress always makes life more difficult.

Doing well financially can lighten any pressure and allow you to simply enjoy your golden years. You’ve earned it, after all.

However, it must be said, that aging does come with financial challenges. After all, you’re no longer earning and you still have expenses that need to be paid, including clothing, medical costs, food, travel expenses, and more.

Why We’re Talking About Finances

Focusing on finances for seniors might seem slightly odd. After all, the same principles apply at every stage of life, right?

Well, that’s not entirely the case. Seniors face some additional complexities.

For example, their reliance on a fixed income means that seniors must be more cautious than normal about their spending. While some seniors might be able to work part-time or earn some money in another way, this won’t be an option for many others.

Aging often comes with health challenges too.

Because of this, medical costs tend to grow as people get older. Insurance will cover some of these costs, but perhaps not all of them.

Plus, seniors often have the next generation to think about. You’ll need to plan carefully if you hope to live well in your golden years and have something to pass on to the next generation.

Essential Financial Advice for Seniors

So then, let’s get started with the finacial advice.

While many of these approaches apply to all age groups, some pieces are particularly important for seniors.

It’s important to take them seriously too. Sure, it’s easy to think that you already know it all because you’ve lived a full life. But honestly, it’s easy to miss important pieces of information.

Learn About Finances

First things first, financial literacy is important. It helps you be aware of the decisions that you’re making and their impact.

Knowing more about finances can help you to be wiser. For example, you might start to save and invest money, which then leads to more money in the long-term.

Don’t shy away from learning just because you think you already have a good handle on your finances. Most of us weren’t ever formally taught financial literacy. We figured it out as we went along instead – and missed some knowledge along the way.

You never know what you’ll learn until you start this process. But most people will learn at least a few pieces of valuable information when they improve their financial literacy.

Look Closely At Healthcare Costs

Healthcare often gets more expensive as you age. Even if you don’t have any serious health problems, you’ll find that doctors tend to be more cautious. This can mean that you’re taking more medication or need to go through more tests.

Your insurance should cover a portion of your medical costs, but you’ll normally need to pay some of the expenses yourself too. Even fairly small healthcare costs can quickly add up, especially if you need to pay them every month.

Thankfully, there are ways to reduce your costs too.

Start by being proactive about your health. Eating well, getting enough exercise, doing any exercises that the doctor requests, and taking your medication are all important approaches. These help reduce the risk of serious problems down the road.

Talk to your doctor too. Ask for advice about how to prevent health problems. They’ll be able to give you personalized advice, as they will have a sense of your biggest risk areas.

Look around for ways to reduce your health costs as well.

For example, there are often medication discounts from local stores or through groups like AARP. The Senior List offers one of the most comprehensive summaries of medication discounts out there. This list is regularly updated and is a great starting point for finding medication discounts.

Don’t be afraid to ask either. Ask around about local programs that may help with medical costs. Your local senior center may know of some.

Be Sure to Budget

Budgeting is important at any age. It becomes even more essential once you’re on a fixed income.

Besides, many seniors have less money each week than when they were younger. Without a budget it’s far too easy to spend more than you intend to. If this happens, you might find that you don’t have enough money left for some of the essentials.

Budgeting means you need to work out the amount of money you have coming in, along with your expenses. This will give you a sense of how much money you have left.

You’ll also need to think about your priorities and where you can save money.

But, budgeting doesn’t mean that you should cut out pleasures. Spending money on entertainment is still important for your mental health and for promoting social connections.

Seniors also have more time on their hands than most other age groups, which can mean more need for entertainment. This isn’t a bad thing, but do keep an eye out for ways to cut costs. For example, a streaming service like Netflix is cheaper than renting DVDs or going to the movies regularly.

Be Wary of Credit

Credit cards and other sources of credit make it much easier to buy things. They can be important too, like if you need a new appliance that you can’t afford up-front.

The problem is that you’re often faced with high levels of interest. It can be difficult to wipe out the debt once the interest starts to accumulate. Some seniors on fixed incomes find themselves in the position where they’re largely paying the interest on their credit, while making little dent in the amount that they owe.

It’s best to only use credit cards when they are essential. Even then, you should try to pay off the balance before any interest-free term expires.

Be particularly careful with mail order catalogs.

Many of these offer credit arrangements so you can easily afford their products. And, the companies often target seniors with their marketing. Their terms might sound reasonable, but you often end up paying far more than the products you’re buying are worth.

Hire a Financial Advisor

A financial advisor can help you to get on track with your finances, giving you a better sense of your options and how to make your money work for you.

An advisor can be important even if you’re already financially savvy. After all, you’re probably not a financial expert. There will always be people who know the field better than you do.

Finding a good financial advisor or financial planner isn’t difficult. But, you do need to do your research first.

Make sure that whoever you higher has a good record, is reliable, and has the apporpiate credentials.

Watch Out for Scams

Scam artists area always trying to make money from others. Many of them target seniors, especially as seniors may have more free time and can be more vulnerable.

There are many different scams out there now, including coronavirus scams. Thankfully, while scams can be frustrating, there are red flags that make them easy to identify.

Here are some key things to watch out for. You can find more details about avoiding scams in our post on the topic.

• Unsolicited calls that try to pressure you into paying money, providing your credit card information, or giving personal information. Be especially wary of callers that use scare tactics or suggest that you must do something immediately to avoid consequences.
• Callers that ask for confidential information, such as passwords or your Social Security number, even if they claim to be from an official source. The only time you should provide confidential information is when you’re certain of who you’re talking to. Most of the time, this means you should call them.
• Companies that want you to pay through wire transfer, gift cards, or some other unusual means. Such payment methods are difficult to trace or refund, which gives scammers an advantage.
• Anyone who asks you to pay in order to receive something, like paying money to get a COVID-19 stimulus check or paying money to receive your competition winnings.
• Anything that sounds too good to be true – especially if it is promoted through an unsolicited phone call.
• People in your life who show an unusually high level of interest in your finances or attempt to change how you spend money. Scammers can sometimes be the people who are closest to us. And, even when loved ones aren’t intentionally scamming, they may take advantage of your financial situation.

Prepare for Cognitive Decline

Cognitive decline doesn’t happen to everyone and there are some ways that you can protect your mind. Even so, it’s important to prepare just in case you do face cognitive problems in the future.

This may mean giving someone else partial control over your finances in the event that you’re not able to, setting up automated systems for many of your financial tasks, and making sure you rarely have access to all of your funds.

Automatic payments, for example, can be particularly powerful. These mean that you don’t need to remember which bills are going out when. The money automatically leaves your account. You could even keep spending money and bills money in seperate accounts, so there’s no risk that you’ll accidently spend more than you intend to.

Talk to a lawyer and a financial planner about the best options for your situation. Friends of a similar age might be able to give you some ideas too.

Final Thoughts

Staying on top of your finances doesn’t need to be difficult. One of the most important steps is simply taking the time to plan. Talking to a financial advisor or financial planner can be powerful too, as they’ll have information that you didn’t know about previously.