Low Income Living – On Social Security

Due to a layoff and a poor economy, I was forced into an early retirement on a Social Security income only. What that meant was I had to adjust very quickly to low income living. I was a Mechanical Designer for close to 40 years and had worked in many different industries. For the past 8 years, I had worked as a contract designer for a number of different companies. These contract positions were usually for a specific project which would last anywhere from 9 months to 2-1/2 years. When a project was completed, I usually had another one to go to within a week or two. Then last year, when my last project ended, there were no new projects available. I searched nationwide for contract and/or permanent position with no results. What I found was, I had two strikes against me; one the extremely poor economy along with high unemployment, and the other was I was over 60. With the three interviews, I did have last year, I was either over qualified or not enthusiastic enough for the position. They couldn’t say anything about age decimation, but they sure came close.

After 6 months with no income, and my reserve funds were running short, I decided to apply for an early retirement. It’s better to have something coming in than nothing at all. This turned out to be a 70% reduction in my usual income, which meant I had to do some serious reevaluation of all my expenses and budget everything extremely tight.

So, here are the steps I took, to reduce my budget by 70% and adjust to Low Income Living;

1. That big home with 5 bedrooms and a large den you are living in, do you still need a home this large? A large home has higher utility, taxes, maintenance, etc… You may want to consider selling your home and moving to a smaller place or even an apartment which wouldn’t have any maintenance expenses or property taxes. You may also want to consider relocating to an area where the cost of living is lower and where there is an abundance of low income assistance programs.

2. Write down all your monthly expenses, Mortgage/Rent, Utilities, Insurance, Credit Cards, Gas, Groceries, Clothing, etc… Everything. Then compare it with your monthly income and make the needed adjustments. If your expenses are still more than your income, you may want to get a pocket notebook that will fit into your shirt pocket. Keep it with you at all times and write down every bill you pay, every check you write, everything you purchase with a credit card, debit card and even your out-of-pocket purchases. List every cent you spend. Then at the end of the month take a sheet of paper and list everything in your pocket notebook in one of two columns, Essentials or Non-Essentials. You may be surprised at all the non-essentials you are spending your money on. Now make the additional adjustments you need to make ends meet.

3. Consolidate as many debts as possible. In the process of consolidating debts, work towards lowering interest on credit cards and charge cards. Request medical groups to reduce a portion of what is owed due to financial hardship and set up affordable payment plans. Some will reduce the debt and some won’t, but it won’t hurt to ask.

4. If you are not working anymore, do you need that second car? Why not sell it? It will reduce your maintenance cost, licensing fees, insurance expense and if you are making payments on it, you could pay it off too. One less bill to worry about. While you are at it, why not have a yard sale and get rid of all those boxes of “Stuff” in your garage, your basement or up in the attic that you will never use again. Also, do you have an extra refrigerator or freezer that you really don’t need anymore, sell it too. Besides, in the process of reducing expenses and excess baggage, you may come away with some extra cash you could use to pay off some of those nagging bills. In most cases this is a win – win situation.

5. Put all your remote controlled electronic appliances on power strips with a shut-off switch. When these items are not in use, shut them off at the power strip. Even though they are turned off by the remote, they are still drawing power. Replace all those 60, 75 and 100-watt incidence light bulbs with 13, 20 or 26 watt CFL lights where possible. You might also want to consider putting a Thermo-Blanket around your water heater. All this will help to reduce your power bills. Also, if you are going to be gone for a few days or more, unplug all non-essential electrical appliances. This is just a good safety precaution. One of our sons had a lightning strike near his place. It took out their big screen TV, computer, microwave and several other small appliances. They were home at the time and were able to quickly put out the small fire that started on the back of their TV. They were lucky.

I hope these thoughts are helpful. Have a wonderful and safe retirement.


Comments (2)
  • Found this very intresting and helpful will pratice this immediately thank you for the knoledge

  • Thank you. That article was extremely informative.

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