A caring solution to help you plan for the future and settle affairs after a loss.
Taking Care of Finances In Older Adulthood
Money is a major player in life. For many people, it determines whether they will struggle to be happy and successfully care for those dependent on them, or live comfortably and free from stress. Though managing personal finances is a huge factor in all stages of a person’s life, it is of particular importance in older adulthood and post-retirement.
With the economic turbulence, high medical costs, inflation, and policy changes regarding 401K’s and pension benefits all-too-common lately, it is now more vital than ever for older adults and retirees to take care of their money and tend to their financial health. Life is unpredictable, and oftentimes the difference between survival and loss following an emergency depends on the monetary precautions taken beforehand.
To limit the likelihood of severe economic injury in the wake of unprecedented and devastating events, all older adults and retirees would benefit from taking steps to adopt better, more strategic spending habits
ESTABLISH A SET BUDGET
One of the most efficient first steps to taking care of money is measuring how much of it is brought in against how much of it is spent and saved, and then designing a plan where the amount of money saved is greater than the amount of money spent. Doing this takes a considerable degree of self-control at first, and while it may be hard in the beginning, setting up a modest budget where there is neither excessive spending nor saving can be indescribably beneficial in the long term.
What exactly constitutes a quality budget is debated among financial analysts and economists. For many, what makes an effective and fulfilling budget is relative to individuals and their needs. Some people’s needs are different from the needs of others, and their respective spending habits reflect as such. A common piece of advice from most financial advisers is to break money and finances down into three sections, with the majority of income going towards needs, the second most going towards wants and the least going towards savings/debt repayment. Experts frequently summarize the ideal budgeting plan as 50% going towards needs, 30% towards wants, and 20% towards savings/debt repayment. Again this structure is unique to the individual and how they measure their needs to their wants relative to their other responsibilities.
INVEST WISELY
The idea of ‘passive income’ boils down to the act of bringing in income without a high amount of work. One of the most common ways to bring in passive income is to invest in products or properties expected to yield profits soon. For older adults who wish to either retire or decrease their weekly amounts of labor, acquiring some kind of passive income through investments can be an excellent way of meeting such goals.
As is with budgeting, there is no exact science to investing and building a passive income. However, a common rule among professional and novice investors is to always be aware of the balance between risk and reward. There is some risk of failure with every investment (wasted money, debt, unused capital, etc), and every investor must ask themselves if the risk inherent to their investment is worth the potential reward. For example, if a person wants to build a cabin to rent out to campers, they must first consider if whether the cabin’s potential for success justifies investing the time, money, and resources needed to begin such an operation.
BE WARY AS A BUYER AND PROTECT YOUR MONEY
Whether someone is a budgeter or a free-spender, an investor or a non-investor, it is still important to constantly be on the lookout for con-artists, hackers, and scheme-runners who employ manipulation and deception to gain access to, and then steal people’s hard-earned money. While all people of all age groups can find themselves the victims of scammers and thieves, older adults are unfortunately at a higher risk of being targeted.
To avoid exploitation from those who wish to steal from them, numerous actions can be taken by older adults to both minimize their chances of being targeted and protect their money in the event of an attack. Such actions include:
Being immediately suspicious of random emails and calls which center on money and come from a seemingly non-legitimate source.
Double-checking with people reaching out either through phone or through the internet who claim that they are a relative and require assistance.
Protecting online banking and other online financial service profiles with intricate passwords that strangers would not be able to guess.
Investing in an online VPN. A VPN is a computer program that protects computers from hackers and data breaches and prevents information theft.
There are countless ways in which older adults can take care of their money and live a more financially fulfilled life. For more advice on how to manage finances as an older adult and decrease money-related anxieties, readers are encouraged to solicit local financial advisers for personal guidance and look to sources such as the National Association of Personal Finance Advisors (NAPFA) and Investor.Gov for further advice and financial management tools.