Here’s what I call ugly math.
With consumer prices now rising at a 7.9% rate, your dollar doesn’t go nearly as far as it used to. That’s why inflation has been called a “silent robber.”
Among those hurt the most by this than seniors on fixed incomes. Some 62 million Americans got Social Security in February, getting an average $1,658 a month, thanks to a 5.9% cost of living increase that began in January. Of this group, a huge subset, nearly eight million people, rely solely on this modest amount. No pension, no personal savings, nothing. Just $1,658 a month.
So when inflation soars, as it is now, something’s got to give. Even in the not-too-recent days of low inflation, many seniors were making difficult, even dangerous choices: choosing between three meals a day and medications, for example. Turning down the thermostat in winter, or using the oven for heat, which can cause fires or carbon-monoxide poisoning.
Now, the cash-crunch is even worse.
If this is you, what are you doing to make ends meet? Share your ideas in the comments or email me and I’ll pass them along in a future column. Meantime, here are a few ideas of my own:
Consider getting a roommate. If you own your own home, or if you’re in a rental, you might have a room that can be converted into a bedroom. Ask friends, someone at church, perhaps, if they know of anyone who is also interested in saving some money. This would be a good way to reduce not just the cost of housing, but also utility bills, perhaps even food bills and chores. With the pandemic easing and most seniors now fully vaccinated, it’s probably safe to be around someone new, as well.
Downsize. Real-estate prices have soared. If you’re a homeowner, consider cashing out and renting something smaller. If you’re a renter now and in a one-bedroom unit, could you move into a studio apartment?
Credit card debt. A Congressional study in 2019 said nearly 62% of seniors carried debt of some sort—mortgages, college loans (yes even seniors owe this) and more. But credit card debt is the worst, because it typically comes with double-digit interest rates. If this is you, get out of this hole as fast as you can. Focus on paying off the one card with the highest rate first while making minimum payments on the others. Better yet, simplify things by consolidating cards into one card with the lowest rate you can find.
Save food. An estimated 30-40% of the entire U.S. food supply is wasted each year. SeniorLiving.org estimates that works out to some $1,600 per household—a huge waste. The grocery chain Kroger offers some really good tips on how to save here. And since I’m pretty frugal myself, I’ll throw in a tip of my own. Everyone drinks coffee, but it’s really getting expensive. I never throw out cold coffee at the end of the day. So wasteful! I pour it into a jar and microwave it the next day. What do I care?
Insurance. Whether it’s for healthcare, homeowner or renter’s insurance or your car, you might be able to cut your premiums in return for agreeing to pay higher deductibles. The site LowerMyBills.com is a good place to compare rates. With a car, ask for discounts based on things like good driving records, having an antitheft system, anti-lock brakes, etc. Also: How old is your car? Some underwriters think that if the answer is seven years or more, you could drop collision coverage, which pays for losses or damage that is your fault. But don’t ever drop liability coverage.
As for health insurance, be careful about tweaking your policy. If you have ongoing health issues, a higher deductible might not be a wise idea. Run the numbers and see what’s best for you.
Go back to work? You might balk at this, but the Labor Department said recently that there are more than 11 million job openings in the country. And with more work being done remotely, perhaps there’s something you could do from home, on your computer.Indeed.com, a job hunting site, offers these tips.