Learn to Live on a Fixed Income

Difficult financial times have forced many people young and old to alter their lifestyles in order to stay afloat financially.  Though unemployment has garnered most of the headlines as the economy has struggled the last several years, it's not just men and women of working age who have felt the pinch.

In a 2010 study from the University of Michigan Law School, researchers found that people age 65 and older are the fastest-growing segment of the U.S. population seeking bankruptcy protection.  While there's no single culprit for the rise in bankruptcy filings among seniors, the state of Florida could offer valuable insight as to why the nation's older citizens are increasing filing for bankruptcy.  

Many retirees call Florida home, and in the past such retirees could tap into their home equity whenever they began to struggle financially.  However, like most of the country, Florida's housing market is depressed, making it less viable for seniors to tap into their home equity to solve their financial problems.

For many seniors fearful of financial struggles, living on a fixed income can be a helpful way of ensuring their future does not involve filing for bankruptcy.  Though living on a fixed income is a definite challenge and certainly offers no guarantee that bankruptcy can be avoided, it does provide a framework seniors can rely on to keep their heads above water during difficult economic times.

Make an honest assessment.   Living on a fixed income involves being honest  with yourself and admitting what your resources truly are.  Write down any sources of income, including Social Security payments, pension payouts, investments, etc.  Then write down how much money you have savings or print out a statement of all saving accounts.

Once you have an accurate figure of both income and savings, write down all your monthly expenses, including all expenses.  From here you can determine just how much you can spend each month.

Prioritize spending habits.  Some expenses, including medications and monthly utility bills, will always remain a top priority.  However, men and women who must begin living on a fixed income need to prioritize how they spend their discretionary funds.  For instance, a membership at the local country club can cost several thousands of dollars per year, whereas the local public golf course only charges players each time they play.  While the country club might have a better course, it could be more prudent to choose the public course and save the cost of a private membership instead

Find it for free. Men and  women pay for many services each month that they could very well find for free.  For example, in addition to books, many local libraries now allow members to check out CDs and DVDs at no cost.  The same also goes for magazines.  Instead of paying a monthly subscription cost,visit the local library and read the magazines there for free.  If the local library does not have your favorite periodical, the content could very well be available for free online.

Expect the unexpected.  One of the worst things that can happen to a person on a fixed income is to encounter an unexpected cost.  This can include an unforeseen hospital visit, a costly auto repair or even inflation that wasn't  factored into your initial fixed income budget.  Men and women on fixed incomes should expect such emergencies and save accordingly each month.  Saving money should never go out of style, and those on fixed incomes should still attempt to save money each month.   Coming in under budget and making the most of it can make the difference between capable handling an emergency or being forced to consider unattractive alternatives such as filing for bankruptcy.

If you want to get more information on how to live on a fixed income by visit the AAPR at http://www.aarp.org.

 

Tips to Get Out of Debt

Getting into debt with credit cards is easy, but getting out of debt is diferent story.  For anyone who has been making minimum monthly payments and taking on more and more debt just to pay the bills, you need to follow these 3 steps:

• Determine how bad it is.  You need to add up the total balances to find out how much debt that is still outstanding.  Take into account the interest rate and how much it cost paying it back over various time periods.
• Put away the plastic.  Leave your credit cards at home and assign a percentage of the monthly income to pay down the balance over the period of time.
• Choose advisers wisely.  Consumers can check credentials at The Association of Independent Consumer Credit Counseling Agencies and The National Foundation for Credit Counseling.

If you need for more information, you can visit Consumer Report Money Adviser for more information.

Valentine's Day Gift-Buying Tips

This is the time of the year when lovers is gearing up for another expensive Valentine's Day gift. Valentine's Day often produce money arguments the rest of the year."  Here are three smart and practical ways of expressing your love this year:

• Build a future together.  Save money off the top by funding your 401(k)s and investment accounts through monthly payroll or bank account automatic withdrawals.
• Pay off credit card debt.  Surprise her with a zero balance every month from now on
• Build a cash reserve.  Maintain at least three months living expenses in cash so that when an unexpected expense hits you, it can be an opportunity for overcoming the situation as a loving team, and not fighting about where you will get the money to deal with the issue.

How to Increase Income Without a Raise

Finance Expert Carmen Wong Ulrich shows you how to increase your income from your current job without asking your boss for a raise or a promotion.

Filling Hidden Money Leaks that Drain Your Cash

Jaimee Zanzinger of Woman's Day Magazine show you surprising money leaks you may be making and how to plug them up and save some cash.

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