Getting ready for retirement? Need all that space? Or can you save money by moving? There are our best downsizing tips for seniors.

When it comes to space, sometimes less is better. Less space means less to fill. Less stuff means less money spent, less clutter, and less moving expenses.

Moreover, it means more freedom. Freedom to travel, create and do whatever will make your retirement truly happy and enjoyable.

We spend the majority of our working lives accumulating and growing. Retirement gives you the opportunity to slow down and decide what is necessary for your happiness and what is just clutter.

Downsizing in America

By the year 2030, there be about 73 million people in the U.S. aged 65 and over, and many older Americans tend to move into smaller spaces as they age, according to an article in Press Connects. If your plan is to downsize, there’s a lot to accomplish before you can start enjoying your new lifestyle.

If you are looking to save money in retirement, downsizing will do wonders for your budget. This is especially true if you still have a mortgage to pay while retired. Depending on your home equity, downsizing could allow you to buy a paid off smaller living space, or significantly reduce your mortgage.

10 Best Downsizing Tips for Seniors

Downsizing your living space is one of the best ways to not just save money in retirement, but also to give you a fresh start. Here are the best downsizing tips for seniors as you enjoy retirement.

Here are a few tips to make the adjustment go smoothly:

Tip 1: Give yourself plenty of time

It’s best not to rush the downsizing process. Give yourself several months to go through your possessions and decide what you want to do with them. Usually that means deciding to keep them, sell them, donate them or throw them away. It’s best to start this process well before you move everything to a new place, so you don’t have to end up doing it twice. Consider how much you own, what your current schedule is like and how much you’ll need to downsize when you’re coming up with a timeline

Tip 2: Set small goals

Downsizing is a big job, so it’s best to tackle it in small steps. This can mean deciding to clear out one room of your home at a time, or donating a certain number of boxes to your local thrift store each week. Regardless of how you decide to measure your success, be sure your goals can be easily accomplished within a few days so you don’t feel overwhelmed.

Tip 3: Have a vision for your new home and lifestyle

If you want to retire to Florida, don’t hold on to all your winter coats. Or, if you know you’ll be traveling more, consider getting rid of large pieces of furniture that you probably won’t be using that much. Just because an item is serving you well now, doesn’t mean that it will be practical for your new life in retirement.

Tip 4: Start by getting rid of duplicates

Who needs three pairs of tweezers? We can accumulate a lot of random things over the years, and sometimes we end up owning duplicates of the same items. Choose the one that’s in the best condition and donate or sell the rest.

Tip 5: Try the Marie Kondo method

If you’re not sure whether to keep something or not, take a note from professional organizer Marie Kondo. She recommends only keeping items that “spark joy” in you. If you see an item and it floods you with happiness, or you’re excited about finding it, you should keep it! On the other hand, if an item just doesn’t excite you, you can get rid of it without feeling much guilt.

Tip 6: Set a day aside each week to downsizing

You’ll never get all your downsizing done if you don’t give yourself time to do the work. Try setting aside one day each week to work on your downsizing project. Invite people to come help you, or set up arrangements to have some items hauled away. That way things are done all on one day instead of disrupting your weekly routine.

Tip 7: Take note of things you’ll be moving

If you have items you know you’ll want to take with you, be sure they’re properly labeled and packed. Invest in good quality storage containers and labels so things are easy to find and stay safe through your move. This will come in very handy if you need to keep more things in storage when you move to your smaller home.

Tip 8: Give yourself mini deadlines

Hold yourself accountable by giving yourself deadlines. For example, give yourself the goal of having the garage cleaned out by September, or get your washer and dryer donated by the end of the weekend. This helps keep things moving in small, easy-to-manage steps.

Tip 9: Keep it fun

Moving is never really all that fun, but you can still find ways to make it a little entertaining. Maybe you can give yourself time at the end of the day to reminisce over old photos you find, or let yourself take a break and enjoy an old record you forgot you owned. There’s nothing wrong with taking a few breaks here and there to relax and enjoy the process.

Tip 10: Don’t get discouraged

If you feel like you own too much stuff, you’re not alone. According to a recent survey, 60% of seniors said they owned more things than they need. The same survey found that 75% of seniors felt somewhat or very reluctant to move due to the number of things they own. It’s certainly not an easy process to downsize, but simplifying your life can open you up to entirely new possibilities in the future.

Bonus Tip: Becoming a minimalist

It is never too late to change your relationship to your possessions. Minimalism is a movement that goes hand-in-hand with downsizing for seniors. Moreover, older people all over the world are embracing minimalism.

• We have a great article on Minimalism by Generation – I highly suggest reading it now as a complement to your downsizing journey.

Conclusions on Downsizing Tips for Seniors

Moving on to the next phase of your life is exciting, but no one ever tells you how much work retirement is. Taking your journey one step at a time, and being kind to yourself will go a long way in helping you reach your goals.

Extra Ways to Save Money In and For Retirement

Cash flow is king in retirement. In addition to downsizing, check out these other articles offering ways to save money, and earn extra money, in retirement:

• Best Frugal Living Tips for Seniors
• Traveling Tips for Saving Money (Slow Travel & Frugal Travel)
• Cash Budgeting to Save Money
• Easy Ways to Make Money in Retirement
• How to Save for Retirement After Age 50
• Tips for Saving Money on Health Care Costs

The post Downsizing Tips for Seniors appeared first on Medicare Life Health.

First of all, we hear it both ways. “Help, my wife won’t stop spending money,” AND “Help! My husband has a spending problem!”

Here’s what you can do to address a bad spending habit in your family.

How to Get Your Husband or Wife to Stop Spending Money

Money and communication are the most common causes of divorce. When there is a lack of communication, and a lack of agreement on how finances should be handled, there is a perfect storm for conflict.

Is your spouse an over spender?

Are you ready to get them on the path to financial success?

If so, there are a few key things you can do to start the conversation – without starting an argument. 

Understand the Extent of the Spending First 

To start, before bringing up the conversation, check the bank statements and evaluate how much is actually being spent every month. Then, compare it to your own spending.

When you’re in a relationship, especially one where finances are conjoined, it can be easy to point fingers instead of acknowledging your own contribution to the situation.

Is your spouse the only one spending frivolous amounts of money or do you contribute to the frivolous spending as well? It’s also important to understand whether your spouse considers the spending necessary. Understanding the details of the spending can make the difference between starting a conversation and starting an argument. 

Print Out the Bank Statements 

Next, know that some people are visual learners. Your spouse may not realize they’re spending too much money until they can see the proof on paper.

• First, highlight the spending you would consider frivolous and then add it up.
• Next, write the total in bold marker at the bottom.
• Then, before you bring out the papers, reassure your spouse you aren’t mad. You are just wanting to discuss how you guys can cut back on spending.

Using “I Statements” to Talk to a Spending Spouse.

This can be a very sensitive topic, and it’s important to use “I statements” when bringing up spending. Instead of “we need to talk about your spending” try “I feel concerned about our finances and I would feel better if we could discuss them.”

Moreover, once the conversation begins, try not to blame the over spending on your spouse. Take responsibility for your feelings on the matter. Instead of “look at the bank statements, you spend too much” try saying “I went over the bank statements and I would feel better if we could break down what the money was spent on specifically.”

“I statements” are commonly used in psychology to help people effectively communicate, and they are especially common in marriage counseling. Having a healthy conversation about a stressful topic can help you both move forward as a team. 

Build a Budget Together

Budgets are the key to developing financial stability. Taking control of where your money goes can make a huge difference in your finances.

• To start, sit down and review your household spending over the last couple of months.

• Then, write down your bills and expenses that are necessary, such as rent and groceries.

• Next, add up the things that weren’t necessary, like eating take out, or subscription services.

• In addition, ask your spouse what they think a reasonable budget for the non-necessities would be.

Learn How to Compromise

Marriage is about compromise and when it comes to finances, this is no different. Talk about why you both feel differently. Lashing out at your spouse and telling them it’s ridiculous to spend so much on coffee will turn the conversation into an argument.

Arguments won’t change any habits. Instead, ask them what they think could take the place of a coffee every day? Maybe investing in an at home espresso machine or asking if they could get a small instead of a large. Small changes can have the biggest impact when it comes to finances. 

Make a Rule for Discussing Large Purchases

Set a dollar amount that you both agree to discuss before spending. For example, if you notice a lot of your spouses spending is on items that cost $50 or more, set the rule for discussion at $50. Agree that you will both talk it over that evening and decide together whether the purchase is necessary or not.

This not only encourages good communication, but it allows your partner time to change their mind on the purchase. Don’t rush to say “no” to every purchase. Listen to your partner and discuss the pros and cons of the purchase. What your dollar amount for discussion is should be based on what your budget can handle.

If your spouse has $200 of personal spending money in a month, then a purchase for a $50 item wouldn’t need to be discussed unless they already spent their $200.  

Use Cash

Using cash is known to decrease spending because the person is forced to acknowledge and see that their money is spent. Consumerreports.org states that several studies show using a credit or debit card increases spending.

This is because people are attached to the cash and having to physically give it up for their purchase makes them think about the purchase a little longer. Whereas using a credit or debit card is easy and quick, and you get to keep both your purchase and the card so there is not sense of giving up anything for the purchase.

Using only cash can be difficult though and depending on what kind of over spender you are with it may not be effective at getting them to stop spending. If your spouse needs to keep a card for gas purchases and has access to the card once the cash runs out, it is going to be difficult to keep them from using it. 

Set Up a Second Bank Account

Having a separate bank account for your spouse to use can prevent them from overspending out of the main bank account. Discuss how much money should go into the account every month and then agree to them not having access to the other account. This will allow them to use a card for purchases they may not want to use cash for.

The only downside to this is that it won’t make a huge difference if your spouse isn’t learning to budget their money. It may also create conflict if your spouse spends the allotted amount and needs money for gas but doesn’t have access to the main bank account. 

Cut Up the Credit Cards

If most of your spouse’s spending is on store credit cards, it might be time to cut them up. A shopping addiction is made so much easier with store credit cards. As discussed above, the psychology of spending shows that using a credit card makes it easier to spend more without thinking about it.

Talk to your spouse about closing the credit card accounts. They might not want to do this because they may not see it as an issue, especially if they aren’t the one paying the bill every month. If they don’t see the true extent of the money they’ve spent, they are less likely to agree to a solution.

Print out the statements and highlight the total amount spent as well as the total balance still left on the account. Being faced with the reality of their spending is more likely to result in change. 

Make Your Spouse Pay the Bill

If you are the spouse that handles all of the bills, then your partner may not be realizing how much they’re spending. If your spouse has sent you guys into debt with their spending, have them sit down and pay the bill with you every month so they see what their spending costs. 

Discuss the Possibility of Counseling

If your spouse’s spending has resulted in a financial hardship for your family it might be time to discuss counseling or therapy. Overspending can be a compulsive act that is linked to a mental illness. Depression, anxiety, and even ADHD can be tied to compulsive spending.

There isn’t much you can do to correct compulsive spending if it’s tied to an untreated mental illness. You can budget and try to control the money, but a compulsive spender will find a way to open up new credit accounts and destroy your finances as well as your marriage.

Be kind and understanding that your spouse may feel offended or embarrassed, and let them know you’re there to help improve your marriage. Talk positively about the importance of caring for your mental health so your spouse feels supported. Treating the mental illness the same as if it was a physical illness can help your spouse feel less hesitant and hurt when seeking help for their mental health. 

“My wife won’t stop spending money!” Conclusions

For those with spend-y spouses / partners, there is hope. With a little work and a lot of communication, you can get through the monetary and emotional damage. In the end, your relationship with be stronger and your pocketbook bigger.

The post My Wife Won’t Stop Spending Money appeared first on Medicare Life Health.

Do you feel like it might be too late to start saving for retirement at 50 years old or older?

Debt expert Valentina Wilson is here to get you started with saving and investing, no matter what your age, situation or even your gender.

Calculate how much you need after retirement

The baby step to save and invest in your retirement is to find out how much you might need after retirement.

And therein lies the importance of the safe withdrawal rate! It implies the percentage of your accumulated wealth you can withdraw every year without running out of funds. Financial experts usually consider 4% as the safe withdrawal rate after retirement.

So, you can use a retirement calculator to get an idea about how much money you need after retirement!

Take Advantage of New Retirement Rules for Saving For Retirement At 50 +

Well, you might know that President Trump signed a new law on December 20, 2019. It’s known as SECURE (Setting Every Community Up for Retirement Enhancement) Act. There are a few changes with the retirement rules which can help you, like:

1. You can get an extra 1 ½ years to grow your money in a traditional IRA or 401k without being depleted by distributions and taxes. The Act pushes the age at which you need to take Required Minimum Distributions (RMD) from 70 ½ to 72.
   
2. Previously, contributions to a traditional IRA couldn’t be made after attaining the age of 70 ½. But now, you CAN contribute to your IRA even if you hit the age of 70 ½.
   

So, don’t wait, take advantage of more time you are getting to save for your golden years!

Make up your Time with the Help of Catch-up Contributions

Do you know about catch-up contributions?

Well, if you are 50 or above, you can make additional contributions to your 401k or IRA, known as catch-up contributions.

In 2020, you can contribute $19,500 ($500 more than the limit of 2019) to your 401k. And as you are 50 and above, you can stash $6,500 more as your catch-up contributions. So, in total, you can contribute $26,000 for your 401k.

In the case of an IRA, you can contribute a maximum amount of $6,000 in 2020. And for your catch-up contributions, you can contribute $1,000 more. That means you can contribute a maximum of $7,000 in total for the year 2020.

I would suggest you max up your contributions to your retirement account. This way, you can make up the time to some extent you have lost.

Get Rid of Debts Early

Do you have any outstanding debt?

If yes, then saving for retirement can be a distant dream for you!

Yes, you heard it right! Most likely, a substantial amount of your paycheck gets deducted to pay off your debts. As a result, you won’t be able to save that much for your retirement. So, find the best way to pay off your debts and live a debt-free life ahead! This way, you can live your life stress-free and save a substantial amount for your golden years!

Opt for a Health Savings Account (HSA)

Day by day, health care costs are rising in our country! A 2019 Fidelity report reveals that the average couple in our country will need almost $285,000 for health care costs!

To qualify for an HSA, you need to enroll in a high-deductible health insurance plan (HDHP). Every year, the IRS (Internal Revenue Service) reviews these plans and defines the minimum deductible and the maximum amount for your out-of-pocket expenses.

According to HealthCare.gov, in 2020, the IRS defines a high deductible which has:

• A deductible of at least $1,400 for an individual
  
• A deductible of a minimum of $2,800 for family
  
• Total annual out-of-pocket expenses of not more than $6,900 for an individual and $13,800 for a family.
  

How to use an HSA

So, once you are qualified for an HSA, find out how it works:

• Perhaps the best way to stash your money into your retirement account (other than 401k or IRA) and that’s too tax-free is by opting for an HSA!
  
  Use your money for qualified medical expenses so that you don’t need to pay any taxes. But always remember that once you turn 65, you can take out your money from HSA for any reason. But you will have to pay taxes on it.
  
  
• If your employer offers you an HSA, your contributions are deducted from your paycheck through a pretax payroll deduction. Otherwise, you can deposit into your HSA on your own. But you have to claim them as tax deductions while filing your income tax returns.
  
  
• Your health plan provider will give you a debit card or checks linked to your HSA account. So, you can use the balance for eligible medical expenses.
  
  
• Unused funds in your HSA roll over into next year. Your balance remains the same even if you retire or change your health plan provider.

Conclusions on How to Start Saving For Retirement At 50

The bottom line is, always remember that it’s always better late than never! So, don’t think that you can’t save for your retirement as you have already turned 50!

Follow the above tips to save and invest in your retirement at the earliest. And live happily during your golden years! Happy Women’s Day once again!

The post How To Start Saving For Retirement at 50 + appeared first on Medicare Life Health.

Today, we are talking about the cash budget / envelope method strategy as an easy way to save money.

However, first, we need to address: credit cards.  We love them.  First, we love the ease of quickly swiping your card at checkout and moving on with your day.  We also love the rewards we get with them and the simplicity of having one consolidated bill to pay. 

In addition, we love the quick checkout of online shopping when our credit card number is on file and we just have one button to click and voila – a package arrives at our doorstep.  And, at least subconsciously, we love not having the stress of whether or not there is money in our checking account today to pay for the purchase…that can get sorted out next month.

The Price of Paying with Ease

But that ease comes with a price.  A pretty steep one in fact, according to Forbes.  Research shows that consumers are willing to pay up to DOUBLE the price if paying with a credit card than with cash.  That’s a lot of extra spending that dwarfs even the best rewards program!  Additionally, for the majority of Americans who don’t pay off their credit cards each month, interest rates can be 20% or more.  Between excess purchases and interest fees, that adds up very quickly!

The Benefits of Paying with Cash

• Paying with cash, on the other hand, drastically reduces how much you spend, making it easier to save. 
• When you pay with cash, you actually see how much you are paying and feel the pain of handing over a large sum of money.  However, with credit cards, you can walk out of the store on a spending high with little thought to the consequences. 
• In addition, with a cash budget, you live with the immediate reality of the money you are handing over, making you less likely to spend more than you really want to.  And then there is the obvious – with cash, once you are out you are out.

A Cash Budget Case Study

To illustrate our point, let’s do some simple math.  Say a person intends to spend around $1,500 a month on groceries, eating out, household items, clothing, and miscellaneous items.  With cash spending, you can limit yourself to that $1,500.  But with credit cards, you could easily spend an additional $180 each month or more. 

Even with some of the best rewards programs, you will only get back around $35.  In a year, the person using the cash budget will have spent over $1,700 less than the credit card spender.  In addition, that person using the cash budget is no longer paying interest fees for credit cards. As a result, they will have saved $200-300 a month – adding up to around $2,000 for the year.  The cash budget will have saved this person thousands!

3 Easy Steps to Start a Cash Budget

Considering a change but not sure how to start?  Let’s talk about The Envelope Method – a system that uses envelopes to allocate the cash for exactly how much money you want to spend.  When you leave home, you grab the money from the envelope and do not allow yourself to spend more than what you have cash for.

So let’s get started.

Step One: Create and record a budget

I like to keep my monthly budget in a spreadsheet (like from Excel), but you can keep it anywhere you like – a piece of paper, a sophisticated financial software program, or anything in between. 

How to Determine Your Budget

• Every month you will have fixed expenses (like your mortgage or rent payment) and variable expenses (like groceries). 

• Start by taking your net income each month and subtracting out the fixed expenses that you know you will have – like your mortgage or rent, car payment, insurance payment, cell phone bill, utilities, etc. 

• Then, you need to determine how much you want to spend on variable expenses. 
  • List out each category of spending – groceries, supplies, dining out, entertainment, gas, clothing, donations, etc. 
  • Take a look at the last several months of your bank or credit card statements to see how much money you are actually spending in each of these areas.  This is not necessarily a pleasant task, but if you don’t know where you are overspending, you can’t correct it. 
  • Determine how much you actually want or need to spend in each area and deduct that from your income. 

Consider a Slush Fund

Unless your budget is extremely tight, you may also want to consider a small slush fund category.  This money can be used for fun or spontaneous purchases, or saved for a larger fun or spontaneous purchase later. 

If you are not naturally a very disciplined person, The Envelope Method could seem a bit constricting.  Having a little, even if it’s just $20 a month, in a slush fund to spend on whatever you desire can help ease the pain of the transition. 

Determine Your Savings or Deficit

The amount remaining is how much you have to save each month.  Hopefully you have a pleasant surprise at this point, realizing that yes, you really can save that much!  However, you might also have a not so pleasant surprise – like discovering that your eating out and entertainment expenses are putting you in the negative each month.  That’s a tough realization, but it empowers you to make different choices to meet your savings goals.

If you are in a deficit, check out our tips on frugal living and saving money here.

An Example of a Monthly Cash Budget

Below is an example of a very simple budget, for illustration purposes.  This example is a monthly budget, but you could also consider doing a weekly or biweekly budget depending on how often you are paid.

Step Two – Prepare the Envelopes

• First, determine a safe place to keep your envelopes of cash.  This could be a drawer or a filing cabinet or someplace else. 
• Next, list out the spending category for each of your variable expense types – groceries, clothing, gas, eating out, etc., each on an individual envelope. 
• Then, determine how you best want to organize them so that you can quickly find the envelope you need.

Next, Prepare the Cash for the Envelopes

• After each paycheck, assuming it is electronically deposited, withdraw the amount of money you have budgeted for cash spending.  Be sure to ask the teller for bills that are small enough you can divide the money up correctly. 
• Then pull out your budget and put the correct amount of money into each envelope.  In the example above, you would need to withdraw $675 from the bank and divide it up correctly over the 5 envelopes.

Extra Cash for Unexpected Needs

Depending on how often you need to spend money, you may wish to keep some extra cash in your wallet.  For example, take an extra $50 out the first month only to put in your wallet.  Then if you happen to be out and need to spend money unexpectedly, you can simply pay for the purchase with the money in your wallet and immediately reimburse yourself from the correct envelope when you get home. 

It’s important to immediately reimburse yourself so that you aren’t overspending and needing to pull out that extra $50 each month.

Step Three – Use the Envelopes

Perhaps the most challenging part of this process is remembering to get the cash out of the envelope before leaving the house.  That’s why keeping a cushion in your wallet is helpful.  Additionally, you could keep your checkbook and/or debit card with you at all times.  However, you should always have a backup plan to avoid using your credit card!

Tips for Success

• Before leaving the house, grab the cash that you intend to spend.  Going back to the example budget, if you budget $400/month for groceries and go shopping once a week, you may always pull out $100 before heading to the store. 

• Or perhaps you shop for different items at different stores and you know one week is more expensive than the next based on what you are buying – adjust accordingly.  Maybe you need $80 this week and $120 the next.  It’s fine to vary how much you pull out of the envelope each time, but make sure that you stick within the cash you have for the month.

• Of course, real life is difficult to balance down to the penny.  There may be times when you have to spend more in one category than you were expecting.  For example, perhaps you are hosting Thanksgiving and you are going to blow past your set amount for groceries.  When that happens, you can turn to your slush fund (if you have one) or reallocate money from a different envelope – perhaps you choose to not eat out this month and pull it from the entertainment envelope. 

What to Do with Extra Money

On the flip side, you may find that at the end of the month you have some money left in an envelope.  You could put it into your savings account, keep it in the envelope for next month, or reallocate the money to a different expense.  In all of these situations, the great news is that YOU are in control of your spending and you are staying within your budget.

Imagine going to the store with $50 in cash from your clothing envelope to buy a new pair of shoes.  At the store you find the dress shoes you need to replace the ones you have that are worn out – great!  But then you notice another pair that you like that are on sale. 

In the past, it would have been easy to just put both pair on your credit card and not given it a second thought…until the bill came.  But now you are on the cash only method. 

You have two choices:

• You can either forgo the second pair knowing that, while the shoes are nice, you have worked hard to get on this savings plan and you don’t want to feel the physical pain of having to hand over the extra cash and cut spending elsewhere. 
• Or you can decide you really like that second pair and pull the money from your slush fund envelope for this month.  Guilt free spending.

The Cash Budget / Envelope Method Applied to Savings

You probably have a checking account to handle short term expenses, as well as long-term savings accounts like a 401(k).  But if you don’t already have one, I recommend that you have a savings account for medium-term expenses – like vacations, gift giving, house expenses, etc. 

When you are in a position to save money each month instead of living paycheck to paycheck, you will need to save for larger expenses that the envelope funds won’t cover.  Perhaps you are planning a vacation or your house needs a new furnace.  If you are proactively saving, you can avoid putting these items on credit cards.

How to Keep Track of Goals

Having a savings account for each thing you want to save money for could be a bit cumbersome.  But it’s very easy to keep an Excel file, or use a notebook, and list out exactly what the money in the account is for. 

For example, you want to go on a trip next summer and your dishwasher is on its last leg so you know you will need to replace it soon.  You are sticking with your cash budget and able to save $400/month.  Each month you intend for $200 to go toward your vacation, $100 to go toward your dishwasher, and $100 to go toward building your emergency fund.  Your savings account tracker would look something like this:

Each month you add to whatever category you are saving for.  If you need to take money out of that category, then update your tracker accordingly.  Money can sit in there as long as you like – in this example the “Gift Fund” wasn’t accumulating any more money but $250 was available at any time to purchase gifts.

Cash Budget Conclusions

Credit cards make it easy to overspend without even realizing it.  If you don’t know where you are spending your money, you are likely overspending. 

The good news is that with some simple organization and discipline, you can make sure you are spending your money intentionally.  Cash budgeting using the “envelope method” is a great way to keep yourself from overspending and make it much easier to save money.

The post Cash Budget and The Envelope Method appeared first on Medicare Life Health.

As you begin to think about retirement, you’ve probably thought about things like draw-down strategies and the amount you will need for yearly expenses. And, as you probably know, the lower your yearly expenses, the less you will need in your retirement nest egg.

So, if you’re finding that you can’t quite make the numbers work between what you have set aside for retirement and what you need to live, you may want to consider the goal of becoming debt free before you retire.

The following are a few tips to help you pay off your debt before you retire.

Create a Budget

The first and most important step you’ll want to take to become debt free is to set up a budget. If you’ve never created one before, it may seem daunting at first – but it doesn’t have to be.

A budget can be as simple as a record of expenses compared to your income. You may use a spreadsheet to manually track these items, write them down with pen and paper, or you may review your bank statements.

Or, you can use tools to help automate this for you. Mint is one of my favorite tools for budgeting because it does all the work for me. After connecting my accounts, it tracks both my expenses and my income in real-time. I can set expense categories and monthly limits. If I go over in a category, Mint notifies me.

Whichever method you use, a budget is pivotal for you as you prepare for retirement. Once you’ve set one up, look at your categories. Start to consider which areas are negotiables (in case you need to remove them or reduce them later) and which aren’t negotiable.

Most of all, take a look at your expenses that go toward debt. Review how much of an impact this has on your budget and consider if reducing debt is the right plan for you.

If it is, consider the following tips to tackle your debt by category.

RELATED READING: How to Set up a Cash Budget and using the Envelope Method

Student Loans Hindering you From a Debt Free Retirement

Pay the loans off

The easiest way to get these off your mind and out of your debts is to pay them off.

If the loans are for you, consider any additional room you may have in your budget to put a little extra money toward your student loans. Every little extra bit helps.

If these student loans aren’t for your education, you may want to work with the student to get a plan in place for quick payoff. You may not be interested in paying them off yourself, and that’s absolutely fine. Help the student understand the impact of a few extra dollars each payment to expedite the payoff process.

Refinance the student loans

One of the reasons a co-signer is needed on student loans is because of the lack of credit history of many entering college students. However, once the student is out of college and has a career, that student may have established credit. Encouraging the student to refinance loans under his or her own name will free your role of this debt being yours, and may help the student get better rates.

We refinanced my husband’s graduate school student loans recently and saw a significant reduction in his interest rates. Changing nothing else about our payments, that would have allowed us to pay off the loans almost a year sooner.

Pay Off Your Mortgage

A recent study found that 44% of people in their 60s and 70s in retirement still have mortgages on their homes. While some do plan to pay the mortgage off within a few years, roughly 17% of them say they may never pay it off.

If you are at all able, try to pay off your mortgage before you retire. As you think about your monthly required expenses in retirement, housing costs could add a significant amount to those expenses. And, greater housing expenses add to the amount of money you’ll need in your nest egg to retire.

If you feel that you’ll be downsizing your home when you retire, consider your options for finding a place where the sale of your larger home could cover the entirety of the expenses of your new home. You’ll have a place to live and no mortgage payment.

Slash Credit Card and Consumer Debt

As you get closer to living on a fixed income, ensuring that you can afford what you spend is of utmost priority. This means that you’ll want to steer clear of racking up credit card debt and consumer debt that you may not be able to afford in retirement.

This is where the budget you set up can really come into play. Understand what your income is each month and how you can pay for your expenses without taking on more debt.

If you already have credit card debt, this is a good time to pay it off. Whether you were using credit cards for medical bills, vacations, or large purchases – the balance can follow you for years if you don’t make it a priority.

This is likely the first debt of all debts you’d want to pay off because the interest rates can be astronomical. Paying down the minimum balance won’t be enough to make a sizable impact.

Considering a Debt Free Retirement

If you’re hoping to have a debt free retirement, know it’s possible to achieve. Whether you have credit card debt, a car loan, a mortgage, student loans, or any other debt – you can pay it off before retiring. Use budgeting tools to get you where you want to be so that you don’t have money stress while in retirement.

Related Reading:

• Frugal Living
• New Rules of Retirement
• Side Jobs for Retired People
• Cash Budgeting / The Envelope Method

The post Easy Ways to Become Debt Free Before Retirement appeared first on Medicare Life Health.

Whether you need more money now, or to stash in your retirement savings for later, one quick way to to get cash is to find easy things to make and sell for money.

1. Making Printables For Downloading

For this first one, you will need a little bit of technical skill and creativity. However, anyone of any age that has just a little bit of both, can quickly make money with printables.

What are we talking about? Printables are anything that you create and deliver in a downloadable format over the internet that provides a valuble product to your customer. For example, you can set-up an Etsy (the makers market) store and sell crafty downloadable items such as:

• Sewing Patterns & Other Craft Patterns
• Checklists, Calendars & Organizing Sheets
• Coloring Books
• Note Cards & Invitations
• Business Cards
• Workbooks
• How to eBooks
• Meal Planners
• Pictures and Graphics

Printables are very popular! I have downloaded many helpful ones myself. As a result, there are endless amounts of websites that will teach you the step by step process to starting a printable business. Just Google “printables business” or go onto Pinterest and search for “how to sell printables” to start.

These websites will give you tips on how to find easy ways to create these printables, even if you do not have a graphic design background. There are services, like Canva, that make designing something very easy for just about anyone. Just remember to do a little research on what is trending and what is always a popular search, before you start the creation process.

Keep it Easy

If you are looking for quick and easy in this area, then stick with Etsy. If you want to turn your printables business into something bigger, you can look into starting your own Shopify store, or selling on your very own website. Just know that path will require much more customer service. Customer service has a habit of taking the “easy” out of an idea.

2. Selling Photos

It has never been easier to sell photos than now. Online publishing (this blog included) has created a never-ending need for unique, quality stock photography. As a result, there are many market places that need photographers to provide photos to sell. You will need to have a good camera for this one. Moreover, you need to know a little bit about taking a good photo.

However, there is a lot of information out there to get started with for free, so we include this option in our easy things to make and sell for money list.

3. Easy, Trending Crafts to Make and Sell for Money

This is another route where you can sell on Etsy, or you can find in-person craft fairs and markets in your local area to sell things quickly.

Popular & Trending Craft Sale Ideas:

• Jewelry – This is always a top selling category in any craft market space. There is a buyer for just about anything. Friends and family are often supportive of your creative expressions too. I have had friends that have sold jewelry at yoga studios and small businesses around town in addition to their online sales.
• Bath Bombs / Soaps / Lotion Bars – Make these pretty, colorful and appealing and they will sell easily, especially around the Holidays! Bath Bombs are easier to make than soaps and lotions. However, all of them are a great idea, and you can find very good, organic recipes online for just about anything these days.
• Clothing – Here are a few ideas with clothing.
  • Screen Printing: At one point, I joined a little creative art studio in town that rented access to their screen printing. I took lessons from them, and then made my own screen printed clothing to sell. I made several thousand dollars over that year selling these items. Moreover, it was a ton of fun! If you want to screen print – baby and kids clothes with cute prints sell well!
  • Knitting / Crocheting: If I can knit, you can too. I seem to have very little finger dexterity, even with years of piano lessons and hours and hours of typing each day! However, I can knit, and I enjoy it. It is therapeutic even! My mom taught me, and she does not do a lot of fancy knitting, but she has sold scarves and hats over the years. When she wears her creations, people see them and ask where she got them – easy sales for her.
• Toys – Sticking with the kids and babies theme, people are often coming up with easy to make kids and baby items to sell. This is an area where Printables are big too (see above).
• Stickers, Vinyls and Transfers – You can either make these and ship them, or you can create downloadable items for people to create themselves.

4. Sell Your Stuff

Next, it is time to embrace the Minimalism Trend and sell your stuff! This idea is not technically in the “make category.” However, you can still use your creativity and maker-skills with your current possessions.

Perhaps you have stuff you could refurbish and sell. Ideas for refurbishing include furniture, watches, jewelry, antiques, clothing items and accessories. You can also just sell things “as-is.” That is easy for sure.

Easy Places to Sell Your Stuff You Made for Money:

• Ebay
• Etsy
• Craigslist
• Local Facebook Buy/Sell/Trade Groups – search in your local area.
• Mercari – A new one, but gaining popularity.
• ThredUp – (for clothes and accessories)
• eBid
• Bonanza – I like their tag “Find everything but the ordinary.”

There are others, just look around and see what market place fits your items best.

5. Easy Things to Make and Sell for Money from the Homestead

If you like getting your hands dirty, then this idea will be easy for you. I personally do not think gardening is easy. However, I have a lot of friends and family that tell me I am wrong, and that gardening is very easy! Then, if you can grow it, people will buy it.

Produce

It is a very popular and happy trend that people prefer, fresh, local produce. Just put a notice up on Facebook that you have tomatoes to sell, and you will easily sell them. Same with chicken eggs and dairy items. I have purchased eggs from neighbors, and I have even purchased chickens.

Poultry and Dairy

There are places that will pluck and package chickens for you if you want to raise and sell them for meat. I had a friend do this too, and she informed me it was not expensive to get the chickens ready to sell with a local butcher she found. I live in the Midwest. However, I think this is a trend everywhere, so I add even “chicken raising” to the easy money category.

Plants

Growing plants to sell can also be easy, but I would not say fast. Plants are certainly trending though. So, if you have a little more time and a green thumb, growing and selling plants and starter plants is a great idea. You could focus on house plants, outdoor flowers, or even vegetable garden plants.

Gardening Tools & Planters

Are you a Crafty Homesteader? Then there are lots of easy things to make and sell for money here. Here are a few ideas:

• Decorated Planters & Pots
• Garden Markers for Outdoor Plants & Smaller Ones for Herb Gardens
• Gardening tools such as knee pads
• Plant Hangers – Wood and Cloth (Macrame is back!)
• Seed Packets
• Compost – I make my own. I don’t sell mine, but you could! People want good compost. I use this tumbler, and recommend it as a good starter for making compost.

6. Your Plasma

Yep, there is always this option for a fast, easy way to make money. Technically, you make it, and you can sell it. Just find a plasma center near you. Then, make sure you qualify to sell your plasma before showing up.

7. Your Opinions

You also make your own opinions. So, we will give brief nod to Survey Companies in our easy things to make and sell for money. Just do these in your spare time to make a little extra cash.

I used to participate in Pinecone Research, and I actually did make some good extra cash with them! It was enjoyable too, but then I aged into a not as needed age category and my survey options shrunk. Eventually, I didn’t find it worth my time. However, every survey company is different and has different clients, so you can find one good for you to make some spending money.

Take a look at this article that reviews the top survey companies. It does a pretty good job of breaking it all down.

Conclusions on Easy Things to Make and Sell for Money

Both online and in person, there has never been an easier time to find easy things to make and sell for money. Everything we presented here has very little investment money to get started. Mostly, your costs will be any materials needed to make your items to sell.

Simply, find what inspires you and get to it!

The post Easy Things to Make and Sell for Money appeared first on Medicare Life Health.

During various points in our lives frugal living is bound to have a different meaning.  While we are young, or have small children, frugal living may include things like couponing or discounts on things for ourselves or our children.  As we age though, frugal living tips for seniors takes on a whole new meaning.

Tip #1: Frugal Living Benefits Come with Age

Aging comes with benefits when it comes to the frugal mindset. Correspondingly, there are so many programs for seniors to take advantage of, you just have to ask about them and then do them. 

To start, here are a few frugal living senior discount programs:   

• Discounts:  Think of AAA or AARP.  You can find so many places that accept these cards and you can get automatic discounts.  Don’t be afraid (or embarrassed) to ask!
• Senior Discounts:  Many restaurants offer senior discounts (55+ or 60+) where you can get 10% – 20% off your meal.  Many grocery stores also have a senior day where you can get a percent off of your total grocery bill on certain days.  Many retail stores also offer a senior day for a percent off.
• Travel:  Same applies for airline, car and hotel stays.  Senior discount!  See our article on frugal travel / slow travel.
• Free activities:  Many city’s offer free activities such as concerts in the park and museum visits. 
• Medicare Perks: Oftentimes Medicare Advantage Plans (and some supplements / Medigap Plans) have free or discounted gym benefits you can take advantage of. Two of the biggest programs are Renew Active and Silver Sneakers. You can learn more about them here.

Tip #2: Be Frugal, But Not Cheap

Frugal vs. Cheap.  Where is the Line? 

One of the key takeaways I got when talking to people is that in order to be frugal successfully, you cannot be cheap or stingy.  Is it better to buy something more than once because it’s cheaper? Or, is it better to buy the more expensive, but quality, item that could last a lifetime? Stingy living or being cheap is different than being frugal.

When adding up the numbers, it would make sense to purchase the more expensive, but quality item. However, it may cause a little bit of sticker shock at first. 

Frugal Living Tips for Seniors #3: Increase Cash Flow by Paying off Debt

To start, pay off your mortgage/debt before retiring whenever possible. In most cases, your mortgage/debt payment is your largest expense.  Consequently, by having no mortgage payment you have the option to downsize. Moreover, you can use the equity to purchase something smaller with the proceeds to help fund your retirement. 

Not having a mortgage payment is a huge weight lifted when it comes to retirement planning and frugal living for seniors.  However, don’t forget about your property taxes and insurance!  Those still need to be paid.  Therefore, put them into your monthly budget so you are not shocked when bills come due. 

Click here to read our article on easy ways to make things to sell for fast money.

Tip #4: Budgeting on a Fixed Income

Next, be intentional in how you spend your money.  Budgeting is a helpful tool in determining how much you can spend.  There is only a finite amount of money to be spent before it is gone.  Using the 4% rule for example; if you have one million dollars, you can only withdraw $40k a year in order to not run out of money. 

Be intentional about how much and how often funds are pulled from retirement savings.  By keeping track of every dollar you spend you should be able to forecast how much you will need later in life. 

This doesn’t have to be a cumbersome activity.  You could simply use pen and paper, excel or if you are savvy you can use online tools such as Mint or Personal Capital. Over time you will have a good understanding of your spending habits and will be able to better forecast the upcoming years of spending and adjust accordingly.  

Related Reading: Cash Budgeting & The Envelope Method

Frugal Living Tips for Seniors #5: Embrace the DIY Mentality

Things you can do yourself, do them!  YouTube has a plethora of information on how to fix literally anything.  Why pay someone to do something that you can do yourself.  Perhaps not the big jobs, like a kitchen remodel, but those pesky small jobs that you may hire a professional for, learn to do them yourself. 

There are also plenty of people to ask if you’re not a YouTube fan. For example, going to the hardware store and simply asking the expert in the department.  Who knows, you may even find that you enjoy doing odd jobs around the house.  

Frugal Living Tip #6: Going Green

There are other ways to be frugal that could require money up front but will save money in the long run.  Electric vehicles for example.  The reality is that they usually do not cost more than a standard gas run vehicle.  But, you do save on the expense of gas and much of the maintenance.  To power an electric vehicle is pennies on the dollar compared to a gas powered vehicle. 

As another example, solar panels and solar water heaters can save you money.  While expensive to install, over time (usually a set number of years), the cost savings outweighs the cost expense. (That is, if you are in a sunny area). Also, don’t forget about the tax advantages of going electric or solar.  You can receive a tax credit, in most cases, both federally and by the state you are living in.  

Tip #7: Prioritize What Makes You the Happiest

Finally, and I think most importantly, you need to figure out what you enjoy doing and make that your priority.  The last thing you want in retirement is the feeling of being left out because you fear you don’t have enough money to do those things that you want to do, that you enjoy.  Just make sure to get the biggest bang out of your dollars.  Simple things like going out for lunch rather than dinner can help.

Conclusions

In summary, you want to make sure that you are happy in retirement and not just counting your pennies.  If you have a frugal mindset but are also doing things you enjoy, retirement will be much more enjoyable. 

Further Reading

Want even more Frugal Fun? Click here to read our article on the number one thing you can do to save money on healthcare.

Or need to save more, even late in the game? Start here.

The post 7 Best Frugal Living Tips for Seniors appeared first on Medicare Life Health.