For many retirees, inflation has hit them at the hardest point in their lives. Since they are no longer working, they do not have the income to offset the increased cost of living caused by inflation. Meanwhile, while the Fed hopes to calm inflation by raising rates, retirees and those on a fixed income have yet to adjust and deal with inflation. Even if current circumstances feel out of your control, there are steps you can take with your finances to be proactive.
Assess your budget
You can’t know what prices have gone up in your life if you don’t know exactly what you’re currently spending. Take a close look at your budget, including your expenses, and see what’s added up to a year over the past few months. You’ll likely see increases in food and gas prices due to inflation, but there may be increases in other areas, including your utility bills and household expenses.
If you know what you’re spending, think about what you could potentially save. Perhaps you’re currently paying for multiple streaming services, even though you might only use one. Or pay for a music streaming service when a free app might suffice. If you buy books frequently, try borrowing books from the library instead.
To lower your grocery bills, see where you’re spending the most and where you could potentially make changes. If you’re spending a lot on meals, try switching to pre-cooked meals from a store, which are still convenient but less expensive than takeout. Or try to cook simple meals if you are able. Creating a simple meal plan for your week can help you plan your meals and stick to a grocery list while budgeting for your groceries.
When shopping for groceries, you may be able to compare the cost of what you typically buy at different grocery stores by looking at prices online or in an app. You can also use coupons or couponing apps to save money on products you use or even get money back on the items you usually buy.
Ask for help when you need it
If you’re struggling with your steady income, there’s no shame in asking for help. If you need help with budgeting or your retirement planning strategy isn’t working for you, get help from a financial advisor. If you find that you’re not withdrawing enough from your investment accounts to stay afloat in times of inflation, you may need to change your investment strategy. A financial advisor can help you determine the best path for this process.
If you can’t pay your bills, there are programs that can help you with your mortgage or rent, utility bills, and more. There are additional programs that can help you with income support and food, so take advantage of the programs that are there for you.
Adjustment of the cost of living
While Social Security adjusts for the cost of living, which includes inflation, there’s generally a lag between when inflation hits and when you would see the adjustment, so stay tuned.