15 Ways to Keep to Your Budget in the New Year

5. Set and stick with a spending limit

Since most retired folks are on fixed incomes, it’s critical to figure out your spending limit, Alev says. She recommends that after you have figured out all of your essential costs, you add up to 20 percent for things that include unexpected costs, savings and paying down existing debt. She generally recommends a budget that includes 50 percent toward essentials, 30 percent for “wants” and 20 percent for unexpected costs.

6. Limit credit card debt

Americans’ credit card debt is the highest it’s been in 30 years, Alev says. It’s extremely expensive — with variable rates from 16 percent to 27 percent on various cards, she says. The biggest financial trap that older Americans typically get into is using their credit cards as supplemental income, Graham says. “If you use your credit card, make certain you have the funds available to pay it off at the end of the month,” he says.

7. Put bills on autopay

To avoid missing any bill payments and harming your credit, put all of your recurring bills on autopay, Alev says. This includes all utility bills, as well as bills for auto, home and life insurance. Virtually every bank has a customer service line that can walk you through how to set up autopay, she says. Set up the autopay for at least five days prior to the bill’s due date, she suggests.

8. Lock your credit

With so many financial scams targeting older Americans in particular, it’s wise to place a hold (or freeze) on your credit with each of the three major credit bureaus; Equifax, Experian and TransUnion. This will not affect your credit score, but it will stop any scammers from opening credit cards in your name, Alev says.

9. Plan for unexpected health care costs

Unexpected health care costs are where most older Americans fail in setting up annual budgets, Graham says. So it’s critical to have ample emergency funds put away specifically for health care costs, he says.

10. Review all subscription services

Check your bank statement for absolute clarity on what subscription services you are paying for monthly and then determine which ones you are actually using and which ones you can drop, Alev says. This includes everything from streaming services to gym memberships to newspapers and magazines. In the end, says Alev, ask yourself this question: “Which ones are improving my life?” Only keep those that do.

11. Review all insurance providers

The National Council on Aging encourages older consumers to review their insurance providers annually. Many offer senior discounts as well as “paperless” discounts, Waterman says. The industry is extremely competitive, and it’s always worth phoning other insurance companies for quotes, she says.

12. Review your entire food budget

In the recent Credit Karma survey, 41 percent confirmed that they regularly waste food purchased from the grocery store and 37 percent said they were either eating out or having food delivered more than they wanted to, Alev says. “A couple of extra food deliveries per month can almost double your food budget,” she says. “If you have groceries in the fridge, it’s best to use them before you order in more food.”

13. Save your Social Security increase

Most retired folks will receive an 8.7 percent cost-of-living increase in 2023. Instead of spending that, put it aside each month in your savings, Graham suggests. That way you’ll have emergency funds readily available.

14. Leverage “senior” discount programs

Older folks pass up potentially hundreds of dollars in savings every year by failing to take advantage of special discount programs that many retailers have set up specifically for them. Many grocery chains offer these discounts, Waterman says. For example, on Thursdays, through its Club 60 program, Harris Teeter offers VIC card members age 60 and up discounts of 5 percent.

15. Find ways to trim

When creating a budget for 2023, the single best thing to do first is to review your old budget and figure out anything and everything that you can instantly trim, Waterman says. “We get caught up in what is actually necessary vs. what is a want,” she says. Some of those wants can easily be nixed, she says.