Living on a Fixed Income | America Saves (2024)

Living on a fixed income means that you generally rely on a set amount of money coming in from one or two sources with very little flexibility in the amounts received. Making ends meet when on a fixed income during times of rising inflation can become challenging. The inability to pay for regular living costs when expenses are increasing can lead to financial uncertainty which then causes stress and worry.

Here are a few steps you can take to stretch your funds and make the most of what you have coming in each month:

Create A Spending and Savings Plan: Knowing what you are working with and where your money is going is the first step to being in control of your finances and is essential when living on a fixed income. This will help you get a clear picture of your financial situation and will give you a great sense of control while reducing worry and stress. Veteran Saves has put together a simple and easy process that you can use to get on track.

Reduce or Eliminate Debt: Many Americans carry debt. Paying down that debt while living on a fixed income can be challenging and even overwhelming at times. Figuring out how to tackle debt with limited funds is no easy feat, however, it is possible to reduce debt while living on a fixed income. First, stop acquiring new debt, and do your homework to ensure you know exactly what you owe. You can then come up with a payment plan that works for you. If you find that you just don’t have it in the budget to make the minimum necessary payments, contact your creditors to work out a payment plan that you can handle.

Assess Your Spending: When living on a fixed income, we must look at our spending habits and make some cuts, if necessary. Start by looking at your major expenses like rent or mortgage payments and transportation. If they are taking up a large portion of your income, it may be necessary to make a change by moving to a more affordable home, refinancing, or trading in your vehicle for a lower payment. Other ideas include couponing, cooking at home more instead of eating out, cancelling gym memberships and unused streaming subscriptions, and switching your phone plan to one that is less expensive. You could also look for free festivals and concerts around your town to save money on entertainment. The most important thing is this: when assessing your finances, decide what's most important and make adjustments based on what matters most.

Find Ways to Earn More Money: Veterans, in some cases, can work while receiving VA disability, and a growing number of those living on a fixed income find themselves having to seek extra employment or income streams to make ends meet. There are a number of ways to earn some extra income, including starting a side hustle, becoming a freelancer, or driving for a delivery service.

It’s important to note that exceptions do apply when it comes to receiving benefits and earning extra income, so we encourage you to do your research before taking any position or accepting pay.

Check to see if you Qualify for Assistance: Living on a fixed income due to a disability can limit your ability to earn anything extra and can result in some hardships from time to time. These hardships make it difficult for many veterans to cover basic utilities and food expenses. Unfortunately, many veterans on disability qualify for some sort of assistance but are either unaware they qualify or believe they are not eligible.

The VA has housing grants available to eligible veterans with service-connected disabilities that can assist with securing housing or updating a home to meet your specific needs.

Additionally, SNAP provides supplemental funds that allow many veterans to stretch their income further by freeing up their food budget, so that it can be used on other necessary expenses, while still putting food on the table.

Military Saves encourages you to find out if you qualify if needed – you could be missing out on financial assistance that could make a big difference in your income and overall financial wellbeing.

If you’re living on a fixed income and not sure how you can make ends meet and save, let Veteran Saves help you get on a path to saving. It starts by making a commitment to yourself. Start today by taking the Veteran Saves Pledge. We’ll be your partner and will send information, tips, advice, and reminders that will help you stay in control and meet your saving goals while living on a fixed income.

Living on a Fixed Income | America Saves (2024)

FAQs

What does it mean to live on a fixed income? ›

What does living on a fixed income mean, exactly? Living on a fixed income generally applies to older adults who are no longer working and collecting a regular paycheck. Instead, they depend mostly or entirely on fixed payments from sources such as Social Security, pensions, and/or retirement savings.

How to save money when you are on a fixed income? ›

So here are some strategies you can adopt to make every penny of that fixed income count:
  1. Make sure your savings are insured. ...
  2. Make a budget. ...
  3. Cut down on "avoidables" ...
  4. Consolidate your debt. ...
  5. Downgrade to cost-efficient solutions. ...
  6. Look around for the best rates.

Is it possible to save $500 a month? ›

The key is developing habits like tracking your spending and making automatic transfers to your savings account. With some planning and effort, saving £500 a month is an achievable target for many people.

What is the 50/30/20 rule? ›

Do not subtract other amounts that may be withheld or automatically deducted, like health insurance or retirement contributions. Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Why is fixed income better? ›

Potential benefits of fixed-income investing

“That's why fixed income is a great way to allocate capital, because it provides both income and return with stability,” Kyle says. Additionally, investing in fixed income can help balance out market volatility.

Why is fixed income good? ›

Fixed-income provides stability and regular cash flow, while stock investments offer growth over time, albeit at the expense of volatility. So a good investor can design a portfolio with both elements to meet their short- and long-term needs.

Is fixed income good or bad? ›

Fixed-income investing can be a good strategy for new investors who want stability and regular income. Bonds and other fixed-income assets offer reliable returns and can help manage risk, as they are less volatile than stocks.

Does fixed income do well in recession? ›

Interest rates tend to begin to decline three months ahead of recessions and reach a cycle low about five months into recessions. During economic downturns, fixed income has been shown to provide diversification benefits and reduce the volatility of portfolios that include risk assets such as equities.

What is considered fixed income? ›

Fixed income is a class of assets and securities that pay out a set level of cash flows to investors, typically in the form of fixed interest or dividends. Government and corporate bonds are the most common types of fixed-income products.

How much will I have if I save $100 a month for 20 years? ›

How $100 a month can help make you wealthy
If you invest $100 a month for this many years......this is how much you'll end up with.
5$8,058.73
10$21,037.40
15$41,939.68
20$75,603.00
2 more rows
Oct 1, 2023

Is saving $1,500 a month a lot? ›

Saving $1,500 per month may be a good amount if it's feasible. In general, save as much as you can to reach your goals, whether that's $50 or $1,500. You could speak with a certified financial planner to help develop a plan for your finances if you aren't sure how much money to save regularly.

How to save 100k in 3 years? ›

I focused on saving 40% to 50% of each paycheck and anything extra. After my 401k, other deductions and taxes (my tax rate was ~25%), the first year I earned somewhere around $1350-$1400 a paycheck. I tried to save at least $500 to $700 of every paycheck and because I kept my expenses low, this wasn't hard to do.

Is $4000 a good savings? ›

Ready to talk to an expert? Are you approaching 30? How much money do you have saved? According to CNN Money, someone between the ages of 25 and 30, who makes around $40,000 a year, should have at least $4,000 saved.

What is the 75 15 10 rule? ›

In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.

How much should a 30 year old have saved? ›

If you're 30 and wondering how much you should have saved, experts say this is the age where you should have the equivalent of one year's worth of your salary in the bank. So if you're making $50,000, that's the amount of money you should have saved by 30.

What is considered a fixed income? ›

Fixed income broadly refers to those types of investment security that pay investors fixed interest or dividend payments until their maturity date. At maturity, investors are repaid the principal amount they had invested.

What is meant by a fixed income? ›

an income, for example from a pension, that does not change over a period of time: Many senior citizens live on fixed incomes. investments that provide an income that does not change over a period of time: We can advise you on how to invest in fixed income (bonds and gilts).

What is a fixed income in simple terms? ›

Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the principal amount on maturity.

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