Published on: July 8, 2020
Living on a fixed income may feel constraining, but it doesn’t have to be with the right budgeting plan! A study found that people with disabilities often have higher expenses—from food to medical care—on top of any additional costs due to living with a disability. Due to these constraints, it’s important for people with disabilities to effectively manage their money wisely so they can live their lives to the fullest without worrying about bills.
If you’re receiving Social Security benefits, or live on a fixed income due to other means, then leaning on a fixed income budget can help you remain financially secure.
What Does Living on a Fixed Income Mean?
A fixed income is any type of investment in which the borrower is obliged to make payments of a certain amount on a fixed schedule.
Treasury bonds and municipal bonds are examples of fixed income products, but so are Social Security payments. Since your SSI or SSDI incomes are fixed—and you are not earning more to your assets—they are considered fixed income.Your Social Security payments may fluctuate due to your cost of living adjustments, but your monthly payments are fixed once you start the program.
Although living on a fixed income is limited, it’s a reliable source of income that you can count on to not vary from month to month so you know what you’ll be receiving. Although you may have to budget for your fixed income, you can depend on your payments arriving at a regular time.
How to Budget and Save Money on SSI or SSDI
When deciding to make a fixed income budget plan, the first step is to calculate your monthly income from all sources. If SSI or SSDI Social Security benefits are your main source of income, you’ll have to be especially tight without how you spend it. After you determine how your Social Security benefits account for your monthly income stream, you can develop a monthly budget plan so you can comfortably take care of your main expenses, such as:
- Medical expenses
- Other costs
If you need help figuring out expenses due to an unexpected disability, the Council for Disability Awareness offers a budget tracking tool that takes into account medical payments and other factors to show how your finances may be affected.
Tips for Sticking to a Budget While Living on an Fixed Income
Sticking to a fixed income budget may be difficult, but with the right tips, it can be done so you can rest assured that all your expenses are taken care of.
One of the best ways to stick to your budget is if you accrue a safety net in case of an emergency. Saving money may not be easy, but it's a smart way to save for the future. Figure out an amount that you would be comfortable enough to set aside each month and deposit it in a savings account.
Paying yourself first before any of your other expenses will be a surefire way to start a money-saving habit.
Take Advantage of Discounts
Stores and organizations may offer discounts for seniors or for people with disabilities. Take advantage of these opportunities to save money.
Look Into PASS Accounts
Recipients benefiting from SSI benefits can only have a $2,000 asset limit; if your assets are valued at more, then you risk losing your benefits. However, you can save money exceeding this asset limit and still remain eligible for SSI benefits by opening a PASS account. A PASS account allows a person with disabilities to set aside money or resources for a specific work goal, such as
Save Any Extra Money
If you receive any unexpected money, such as from birthday gifts or tax returns, it would be wise to put it safely away in your savings account rather than immediately spending it.
Start Making Small Changes
Even making what may seem like small changes to save money will eventually add up. Stopping smoking, buying less snacks, lowering the thermostat, and cooking in rather than eating out more often will all positively impact your budget.
What to do if Your Social Security Benefits Aren't Enough
If your Social Security benefits are not enough for your budget and you are capable of holding a job, you may want to consider going back to work. Even if you haven’t been in the workforce for quite some time, there are plenty of resources out there to help Social Security disability benefits recipients going back to work.
If you’re looking for free job services, the SSA’s Ticket to Work program offers vocational training webinars, tutorials, and job placement opportunities for people receiving Social Security disability benefits. The program additionally offers free benefits counseling to explain how going back into the workforce will affect your benefits and other state or federal programs you may be eligible for.
Additional Resources for Budgeting on Social Security
If you’re looking for simple budgeting tools to help you positively position yourself financially with your Social Security benefits, here is a list that can help you track your finances. The best part? They won’t cost you a dime!
- Download these free apps to monitor your budget.
- Browse these guides to smart shopping so you can eat healthy without breaking your budget.
- Track your spending with this monthly budget worksheet from the Federal Trade commission.
- Find the best customer loyalty programs so you can save while shopping.
- Apply for the SNAP food assistance program; if you are receiving Social Security benefits, there are certain requirements for applying for food stamps.
- Check out DEF’s list of free community resources for fixed incomes.
Do you have more questions about budgeting with a fixed income? Or, are you having trouble navigating the complexities of applying for supplemental income programs, like SSI benefits? Reach out to the team at Disability Experts of Florida. We’re here to help you.