Navigating Rising Costs: Essential Money-Saving Tips for Seniors

Currently, a significant number of older Australians who rely on a pension are facing challenges in meeting their expenses due to the cost-of-living crisis, which disproportionately affects vulnerable individuals.

As fixed-income recipients, seniors on pensions may feel disadvantaged in comparison to younger Australians who can adapt to economic trends.

For approximately 1.5 million older Australians, the pension is their primary source of income, but the payments are typically only a third of their rent. Given this situation, it is crucial to explore ways to maintain financial stability during unstable times, carefully budgeting and finding ways to reduce expenses. This article will provide guidance on prioritising your budget, identifying areas where costs can be cut, and accessing resources to maximise your potential savings.

For example, taking advantage of the benefits offered by your Seniors Card or other concession cards can help you reduce your essential expenses. Ensure that you are aware of the eligibility criteria in your state or territory, as you may be entitled to additional benefits that you are not currently receiving.

To effectively manage your budget, it’s important to recognise that your needs will change over time, and you need to adjust your budget accordingly. Start by understanding where your money is coming from, including savings, income, superannuation, and pension. Then, take a closer look at your recent bank statements to get a clearer picture of where your money is going.

One useful principle to help you budget your money is the 50–30–20 rule.

This simple approach involves dividing your income into different categories, allowing you to cover your essentials while still having money to spend and save. Allocate 50% of your income to necessities and financial obligations, 30% to debt repayment and saving, and 20% to things you want, including entertainment expenses.

Once you have a good sense of how much money you are spending and receiving, consider options for cutting back on unnecessary expenses. Take note of what is essential or at least serviceable to determine what you can do without compromising your wellbeing.

Examples of essential expenses include:
• Utilities (such as water, electricity, internet and phone plans, gas, and council rates)
• Food and grocery shopping
• Medications
• Rent or home maintenance
• Public transport and/or petrol, car servicing, and registration
• Care expenses
• Outstanding debt payments
• Cost of pet ownership (including food and veterinary expenses)

Seniors on a pension may find budgeting apps like ASIC’s TrackMySPEND and the Moneysmart Government guide helpful in keeping track of their finances. Additionally, you can take advantage of any available discounts or concessions with your Seniors Card – it’s ok to ask if a business offers discounts for seniors, you may just be pleasantly surprised by the response.

Cost Cutting Measures

To cut costs, it’s important to know your options and make adjustments that fit your lifestyle.
• Non-essential expenses, such as entertainment and costly habits, can be reduced or eliminated. For seniors and pensioners, it’s important to review your private health insurance annually to ensure it fits your needs and budget.
• Negotiate discounts for subscription services that you still value but don’t use as often.
• Consider your assets, such as a car you no longer use, collectibles, jewellery, or your home. Downsizing to a smaller property or renting can be a way to capitalize on your long term investments and simplify your life.

However, cutting costs doesn’t always mean making drastic changes. There are many resources available to help seniors maintain financial independence and thrive in their community.

Know what you are eligible for.

As a senior, you have access to various concessions, including discounts on healthcare, utilities, and transport, which can help reduce essential costs in your budget. However, knowing which cards are available and the eligibility criteria is important to help reduce your outgoings.

If you’re a pensioner, you’re eligible for health care concessions that cover prescription medication under the Pharmaceutical Benefits Scheme (PBS), bulkbilling for visits to the doctor, and tax-deductible dental, optical, and other medical services.

Although the amount of discount varies by state and territory, Seniors Card holders can also benefit from discounted rates on essential utilities such as:

• Water
• Electricity
• Gas
• Council rates

Enjoy the Perks

The National Seniors Concessions Calculator is a helpful tool that can assist you in determining what is available to you based on your card holder status, state or territory, and other relevant details, such as your homeowner-occupier status.

Seniors Card holders may also receive discounts and perks on entertainment and groceries, particularly on specific days of the week or during certain events.

It is essential to find out which shops and outlets offer low-cost solutions to everyday living and plan accordingly.

Although lifestyle costs and expenses can be an overwhelming topic, by spending some time reviewing and optimising your daily living expenses, taking control of your budget and making small adjustments to your spending habits, you can help ensure a more secure financial future while still enjoying your later life.