What to Consider When Setting Budget Plans for Your Elderly Loved Ones

12Oaks-Senior man with adult daughter looking for solution in financial problem-as-What to Consider When Setting Budget Plans for Your Elderly Loved Ones-Feature

In This Article

Living on a tight budget is never easy since life is full of surprises that can force you to chip away at your savings. Money is necessary, but spending money wisely is even more so.

Creating and following a budget plan is crucial at any age. However, for seniors, significant savings can quickly go down the drain if they don’t consider implementing smart financial planning to control their spending. Therefore, keeping an eye on and carefully planning a budget for the future guarantees that your parents will not run out of money, ensuring a happy and healthy retirement.

Here are some tips and measures to help your parents live on a budget and use their money wisely.


Budgeting For Seniors: Steps and Tips to Consider When Setting a Simple Budget Plan

Setting Up Budget Plans for Seniors: Why Is It Important?

A budget plan during a person’s working years lays a solid foundation for short-term and long-term financial goals.

By sticking to a budget, a person can accomplish their financial goals, such as buying assets (a house, a car), paying off debt and loans, and paying for tuition fees and insurance in addition to paying other bills and living expenses on time.

For seniors, a budget plan is simply a safety net that they can rely on when they fall short on monthly income but still have financial responsibilities, such as living expenses, medical checkups, and assisted living facilities (if needed).

Another important reason for having a financial plan is that it keeps seniors out of debt since unpaid credit debts could end up burning through assets intended for their care, or to be left behind through inheritance. Moreover, they can enjoy their retirement longer and with greater independence.


How to Create a Budget Plan for Seniors: A Starter Pack

Finance is a complex topic for most seniors; some may want to indulge in life free of obligations. Therefore, they may devote their savings to fulfilling their bucket lists and acquiring things they have always desired.

While their motives are entirely justifiable after long years of hard work, this mentality may lead to overspending and possibly even debts if their finances are not well accounted for. At their age, spending through all of their assets and going into debt is not a good idea.

Talking about finances is a sensitive topic, so communication is the key. It is always best to have a conversation first with your parents to express your concerns. Remember to approach the matter with patience, respect, and compassion since they may take your support the wrong way. This proactive step can ensure that you and your parents are on the same page when finalizing a budget plan.

From there, you could determine what measures should be taken based on their wills and the types of medical attention required. Most importantly, reassure your parents that they still have the right to manage their own money.

Your role as a caregiver is to guide your parents and suggest wise decisions from a distance. Overall, the sooner you start discussing budgeting with your parents, the more control they will have over their future financial state.


Tips to Consider When Setting Budget Plans for Seniors

If your Mom and Dad are open to maintaining their expenses in the best way possible and reducing their tendency to overspend, here are some budgeting tips and measures to create a smart financial plan.


Make a List of Their Income and Expenses

12Oaks-Schedule, documents and finance-as-1 Make a List of Their Income and Expenses

A list of bills and obligations is a good starting point for understanding and tracking your parents’ cash flow. Generally, retirees may have earnings from multiple sources of income, such as retirement benefits from Social Security, investment, and pension. Expenses to track are as follows:

  • Rent payments or mortgage
  • Utility bills
  • Personal loans
  • Vehicle bills and expenses
  • Insurance
  • Subscription services
  • Healthcare costs
  • Miscellaneous shopping expenses


Help them centralize all income streams and estimate overall annual living expenses since some expenses are fixed and others are not. Fixed living costs include long-term health insurance and healthcare payments, utilities, rent payments, mortgages, and insurance, whereas costs that fluctuate all year round are uninsured healthcare expenses, groceries, personal purchases, entertainment, or gifts.

After totaling and subtracting tax, you can consider adjusting how your parents spend their money if their expenses exceed their incomes. Alternatively, you can download an expense worksheet from the Internet to more accurately fill in income and expenses.


Cut Back on Utilities and Expenses

12Oaks-Close-up image of senior woman and her adult daughter calculating sum of unpaid bills-as-2 Cut Back on Utilities and Expenses

Before saving on realistic goals, help your parents kick off the budget plan by minimizing expenses and utilities that they might no longer need. For the most part, fixed payments spread out over 12 months are easier to get a hold of than fluctuating costs. So, cutting down costs on unnecessary personal purchases is strongly encouraged to keep your parents’ budget plan on the right track.


Pick the Right Insurance Plan

12Oaks-Senior couple planning their investments with financial advisor-as-3 Pick the Right Insurance Plan

Insurance protects your parents from any financial hardships they might run into in the future. Therefore, investing in one or more insurance policies is a clever contribution to their budget plans. Premiums can be paid monthly, semi-annually, quarterly, or even annually.

Insurance companies offer significant discounts for upfront payments depending on your parents’ needs and current budgets. Be sure to check in to see if your parents are eligible for discounts when paying upfront.

Another strategy for reducing insurance costs is to consolidate multiple policies, such as car insurance, life insurance, health insurance, and homeowners insurance, with a single insurance company. This insurance strategy is known as bundling, which can help your parents save a considerable amount of money.


Research Senior Saving Programs and Discounts

12Oaks-mature man helping elderly senior woman at home with paperwork-as-4 Research Senior Saving Programs and Discounts

Your parents may have a chance to save extra money if they are eligible for government-run tax reduction programs. For instance, the School Tax Relief (STAR) program is purposely designed to ease the financial burden of owed property tax for senior homeowners in New York state.

Remember that federal-sponsored senior saving programs vary from state to state, so visit Benefits.gov to see if your parents qualify for state assistance or discount programs. Similarly, parents can take advantage of senior discounts offered by most businesses and vendors. Despite being modest, and you might think it’s not worth it, they will save your parents money once applied correctly.


Take Advantage of Coupons

12Oaks-Woman In Grocery Aisle Of Supermarket With Coupons-as- Take Advantage of Coupons

Most people believe that coupons are more of a hassle rather than a great deal – you have to clip them out, then organize them, and keep them with you so that you have them when you need them. The truth is that coupons can increase savings by 10-50% on each purchase of groceries and other goods.

Moreover, your parents can forget about the days when they had to collect each physical coupon meticulously, organize, manage, and carry them around. In recent years, most brands and businesses have switched to electronic coupons, giving your parents a more convenient shopping experience with just a few clicks and taps.

Above all, remind your parents not to mindlessly splurge on unnecessary items, no matter how good the deal is. Instead, only buy things they need for long-term use.


If you have questions about budget plans for seniors or any topics discussed here, connect with us and learn more. 

At 12 Oaks, our team of caring professionals is dedicated to keeping residents safe, engaged, and connected to their families and friends while leading fulfilling lives. 12 Oaks senior living communities are an ideal place to enjoy the encore season of life.

For questions or to schedule a personalized tour, don’t hesitate to contact us. 


Searching for senior living help? At 12 Oaks Senior Living, we would love to learn more about your unique needs and the opportunity we may have to help you meet them. Our blog is one of the valuable resources we provide to inform and encourage seniors to lead fulfilling and thriving lives. Contact us today to schedule a visit.

Rate This Article

Leave a Reply

Your email address will not be published. Required fields are marked *