Living on a Fixed Income

As prices of food, gasoline, clothing, medical services and prescription medications rapidly go up, it can be challenging for persons living on a fixed income to adjust making it increasingly difficult to keep up. Here are some things to consider if you are struggling to live on a fixed income:

• Track Your Spending. While this seems straightforward, it is the best tool for keeping within a budget and lowering your expenses. It is impossible to make changes in your daily spending if you don't know where your money is going.
• Start a journal and make a note on all the spending that takes place every month. Pay special attention to non-food spending and see where there might be places to cut back.
• Make Every Dollar Count. Living on a fixed income can be a challenge, save money in every area you can. You should keep your car well maintained and consolidate trips to save on gas money. Use coupons and take advantage of bulking buying when it makes sense. Plan your meals and make your home more energy efficient in order to keep grocery and utility bills to a minimum. You should plan your purchases and rather than walking into the mall for your shopping, do your research. You'll find discounts of 30% or more for the same item by shopping the classifieds or bartering whenever possible.
• Build An Emergency Fund. Having an emergency fund built up is essential when living on a fixed income. If you end up having an unplanned expense such as car repairs or medical bills, credit card expenses can quickly escalate out of control without an emergency fund.

The easiest way to save money is to make it a priority. When your paycheck comes in at the first of the month, your first payment should be to your savings account. Don't wait until the end of the month and try to save what is left.

Some retired persons are stretching their dollars by moving to areas of the country (and outside the country) where it's cheaper to live. The U.S. Embassy estimated in 2001 there were over 600,000 Americans living in Mexico and that number is estimated to have exceeded one million today. There are also large numbers of retirees living in Panama, Costa Rica and Argentina.