Fixed Income Seniors Struggle To Learn How To Budget




Learning how to budget after never using one has caused two seniors we know anxiety over their financial future. If they could do it all over again they would change so much about the way they managed their money. They know they can’t turn back the clock and must face the reality of living on a fixed income with little to no retirement savings and lots of grandchildren.

They are not alone as many Canadians on a fixed income struggle to make ends meet and must juggle their money to balance their budget, if they use one.

Living on a fixed income is a big deal especially for seniors or individuals who rely on money from sources other than from an employer. Cost-of-living increases can cripple those who live on a fixed income especially if they have no other sources of extra money to take from.

People are talking about finance and income so much these days particularly in Ontario because most people are struggling with soaring utility costs and high debt loads. Comparing a Hydro bill to a mortgage payment is not unusual for some homeowners these days.

If you don’t know anything about your money apart from how much you earn an hour or your salary then you need to listen up because your future is at risk. You have yourself to rely on. Anything could happen to you and if it does you must be armed or possibly struggle to make ends meet for the rest of your life.

Raising the minimum wage or getting a raise at work won’t solve the problem without financial education and budgeting. Whether you want to start a family, retire early or are faced with adverse situations that affect your ability to work you should always consider such scenarios as a possible break in your financial game.

Related: How to retire early

If you are not financially prepared the outcome could be drastic and potentially cause mental and physical stress when your income source options are limited. For those who struggle they either downsize, possibly lose it all or continue to work well into their retirement years.


Fixed income seniors struggle


Recently I had a conversation with neighbours up the street who are not yet at retirement age but have been out of the workforce for many years. They stopped me while I was taking out the trash to say that they haven’t seen me around for a while. Oddly enough they caught me on my day off.

I explained that I’ve worked a full-time job and a part-time job the past two years and haven’t been around that much. “You must be making lots of money then for your family”, they said. I’m doing the best I can, I laughed knowing how tired I am most days.

They went on to offer me some financial advice, “Save your Money“.  I gave the agreement nod and responded, “Oh, we are but living is getting expensive”.

My wife and I both noticed how the seniors who once blanketed our streets have since moved on, passed on or gave up on trying to keep up with household expenses. Home ownership comes with a hefty price tag that not everyone can afford after buying a house.

Having a toddler and investing are our two biggest concerns at the moment since we paid off our mortgage in full a few years back. Talking to this couple was inspirational, motivational and reminded me about why I do what I do even if it is exhausting at times.


Then the next 20 minutes of my life was dedicated to understanding about fixed income.


The husband who was injured at work cannot work and his wife stays home to help him with daily living even though her health is limiting from her own illnesses. Her husband who is 56 earns compensation of a fixed income from his work insurance and provided with a small retirement savings that he pays into. The wife does not earn any income at all and is 55 years old with only government pensions to look forward to.

They are not mortgage free because of his injury and loss of employment which means they won’t be debt free before they turn 65. They won’t have enough money to go on holidays like they had hoped because they were too confident in their income sources. Sometimes dreams can be shattered in an instant and when that involves income loss everything changes.

She explained with a sad face that there are no private pensions, huge savings accounts or hefty retirement savings which is why they needed to review their options. I wanted to say that budgeting should have been a priority years ago but judging by what they told me about saving money earlier I’m guessing they know where they made hiccups along the way.

The wife says she flips through the weekly grocery flyers looking for deals and uses coupons to help cut costs wherever she can. Her husband has no idea how to save money especially when it comes to food since he believes eating good food comes before, “stuff”. He says, if I want a nice steak I’ll buy a nice steak instead of a cheap cut of meat.

I understand where he is coming from however if you don’t have the income to back up the expenses then you must evaluate how you spend your money and on what. Even then people who have money MUST budget like everyone else.


Money comes and goes and does not judge.


Their fixed income and budgeting became a topic of conversation because of the rising Hydro rates in Ontario. A typical Hydro bill in the past would have been $200 a month and now that has more than doubled for them. The last bill they paid was just over $1000 for a two-month period that covers a 2400 sq foot house.

They simply can’t continue to afford the lifestyle they are living based on their monthly utility costs unless they sell their house and move into an apartment or start budgeting.

“Our electricity and water bill has doubled over the last two years and it seems to be getting worse”, she says. Her husband earns too much money for any form of a rebate from Hydro but even then that money wouldn’t make a big enough difference to help them.

Related: Family Sacrifices For Financial Freedom Pays Off

Some of the ways they have tried to lower their Hydro bill are common Time of Use practices these days for just about anyone who cares about the scariest monthly bill to open in Ontario for homeowners. Hydro rates in Ontario are some of the highest in all of Canada.

  • Laundry and dishwasher at night or weekends
  • Lights on only when needed
  • Shorter showers, less hot water
  • Unplug what is not being used
  • Water garden sparingly and use a rain barrel

One thing they can’t do is regulate the air conditioning in the summer for health reasons as the husband needs the house to be a certain temperature. Humidity is very dangerous for him which means higher hydro bills.

The winter months aren’t as bad since they have a wood fireplace and can heat their home without having the heat on day and night. This is a huge savings for them but not freedom that saves them from money worries.

The decision to start managing their money came from their daughter who is financially smart and worried about her parents. Although she would help them out with any bills if they weren’t able to pay for something she wants them to be independent and not worry about asking for help. Using a budget was the suggestion she offered them so she’s teaching them to use a budget. I would have offered too had they not told me they had budgeting support.

“Budgeting is scary for us because we are older and are set in our ways”, the wife told us. She seems to be the one in charge of the finances at home since her husband is ill which puts even more of the burden on her shoulders.

The couple is hesitant about using a budget since they have never used one before as there was always extra money left at the end of the month. By the sounds of it they grocery shop together and anything that is purchased is talked about although her husband has a tendency to just buy what he needs as long as he has money in the bank. What’s funny is that many people budget this way even though it’s really not budgeting at all.

When you are on a fixed income like this couple there are some benefits to knowing how much money you are earning every month especially for budgeting purposes. For one, you know how much money you will be getting which makes creating a stable budget possible.

Consider for one moment how much you can learn about your financial situation if you knew how much money you were spending every month and where that money was going. A budget is not age-appropriate it’s just appropriate for everyone to use. The earlier you start budgeting the longer you will have insight into what many people push aside, their financial future.

Related: Get our FREE Budget download that we use in the CBB house


Fixed income budgeting


Budgeting on a fixed income essentially is the same as budgeting when you have income that fluctuates due to overtime hours, sick days or reduced hours at work. The benefit is knowing how much money you have to work with every month being on a fixed income.

How much net income do you earn? <<< You need to know this!

  • Be Organized…I mean very organized and always ask for receipts for everything.
  • Review Your Bills and any debts you owe
  • Find or create a budget that is easy and you understand how to use
  • Build budget categories that align with your lifestyle and needs
  • Stop spending money on stuff you don’t need or can’t afford
  • Establish an Emergency Savings and Projected Expenses Account or documentation
  • Balance the budget
  • Always review your budget every month for errors, changes and inconsistencies.

When budgeting especially on a fixed income or other payment schedules you need to understand why you need a budget and pin-point as much information as you can with what you have available.

For example, if you want to include projected expenses into your budget which essentially are future expenses that you know you will have to pay for write down everything you can think of.

You may forget something one year but you won’t the next, if you catch my drift. Surprise expenses that pop up are either an emergency or a lesson to make sure you have extra cash available for this purpose.


Don’t throw a blanket over your money


Leaving your money to do its own thing means you deal with any consequences that arise if the money runs out. Consider your options when investigating if budgeting is right for you but if you ask me I’ll tell you I wish I knew then what I know now. You’ve got the opportunity now to do something for tomorrow no matter your age or income.

What advice would you give this couple about budgeting on a fixed income? Can you share any helpful tips about learning to enjoy travelling with limited income?

Do you have a story you’d like to share on CBB? Email me at

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  1. If I was in this couple’s shoes I would seriously consider moving to an area with a lower cost of living. The GTA is super expensive. Part of our retirement strategy is moving far away from the GTA.

  2. The Why? Of retire
    I suppose the why question as relates to retiring is an entirely personal one, in my case I was reviewing my money, savings and needs, as we should all do from time to time and I had a lightning bolt moment. I suddenly thought how much more money do I need to save before I retire, I settled down to the pleasant task of calculating net worth and I decided ‘I can go’. I didn’t calculate the house in my net worth calculations nor did I count the value of our two cars, but if you are intending to downsize and go down to one car you can factor these in as well but don’t forget the cost of selling and buying and don’t overestimate the value of your car. ‘Parkers’ guide, available at a newsagent near you, is a good source of valuations for cars. The problems comes if it is damaged, has high mileage or has a yellow paint job, seriously, the salesman who sold me my car warned me never to buy a yellow car, and indicated one on the forecourt that they had been stuck with for six months and he said he wouldn’t be surprised if it was still there in another six months’ time.
    I do appreciate though that for some of you, the why of retire might have been taken out of your hands perhaps due to ill health or being made redundant and not being able to see a way back into the job market.
    However the benefits of retiring are common to all, for one it should give more time to things that actually matter to you be it a long walk with the dog to starting your own business and anything else in between.
    If your planned retirement is entirely self-initiated then if you have done your homework and the sums add up, then stress could well be a thing of the past. As could bosses, commuting, sick policies, work clothing, discipline procedures, complaints, office politics, the office gossip, phone calls etc etc
    But the secret is in the planning and the major factor in that is to budget!

  3. Hydro in Ontario is brutal… We’re seriously considering moving out of Ontario due to housing costs (buying our first home late in the game) and hydro costs. Ours was $150’ish 3 years ago, our bill last month was $440.00. Nothing has changed on our end except we are more conservative with our Hydro! And it still goes up like mad… I’ve just redone our budget for October to make up for continually having to pull money from sinking funds to cover hydro. Ugh!! I feel for seniors and find these posts terrifying for when my Dh retires.. We’re doing all we can but are “late to the game”, so I’m praying we’re not too late!

  4. As you know we are in the same boat with a fixed income due to hubby’s illness. I am caregiver and that is a job in itself. We just renewed the mortgage so I can rely on that amount for the next while for budgeting. Most of our bills are paid by automatic payment and we are on the equal billing plan with Union Gas, we should be finding out shortly what we will be paying there for the next year. Things like our truck and house insurance and our taxes are paid monthly which helps too. The two variables are water and hydro. Our payments to Festival Hydro aren’t actually that bad right now but our water bill is crazy. We just replaced the water softener but we still have a high bill and are still trying to figure out why the water usage is so flipping high. This might take a while, so far the water softener and the kitchen tap have been replaced. We found out the tap was leaking and had a new tap in place within a couple of hours. No idea how long that had been going on but it is fixed now…..Have to see what the next couple of bills look like…. I am doing the best I can with what I have to work with. I feel this couples pain…..
    Hubby had been the one looking after the finances for years, we had RRSP’s but had to cash them in after he fell off the roof a few years ago, off work for 10 months. Then 4 years ago he was diagnosed with Amyloidosis, this forced an early retirement and some very serious issues with income. He is only 61 right now. If he makes it to 65 even the disability income we get will be cut to the basic CPP. It is a big if. I work to stretch every dollar we get as far as I can. Our two boys help out around the house as much as they can. The older boy gets his own disability payments and pays board, his brother is trying to find work in a small town that has already had places close making it harder. Moving elsewhere is an option but I don’t know how much further ahead we would be selling this house, we won’t be ahead all that much. What ever we got wouldn’t last forever either….I take it one day at a time and just keep trying….

  5. My first suggestion…get rid of the house and downsize into a condo they can afford. It will hopefully give them a nest egg in addition to reducing the maintenance costs & will ease the stress of trying to maintain their house when health conditions necessitate outsourcing the work. That’s always expensive!

    As you know Mr CBB, I don’t pay much for vacations. I use points for our hotels/villas and stay where I get at least 1 free meal a day and quite frequently 2 meals a day. I use air miles for car rentals so we are just paying for the gas we use. Entertainment wise, I sign up for online tourism info for the area where we will be traveling and watch for free outdoor entertainment like concerts or movies, local festivals and events, free/reduced admission days, plan picnics in scenic areas and use the library for books and dvds. I also sign up for the grocery online flyers and rewards cards for the area to which we are going. What I do splurge on is our airfare…we fly first class BUT that’s a choice that I budget for. Economy will work if that’s what your budget can afford. Hubby and I also travel “off season” so the vacation dollars give us more bang for our buck. 🙂

    I read these two articles this morning and perhaps they would be of help:

  6. Do they qualify for any seniors benefits? Every bit helps. Do they qualify for federal funding to make their home more airtight? Is there a program for property tax benefits for seniors they could take advantage of? Does she qualify for any provincial disability or CPP disability because of her own illnesses?
    They need to track their expenses for a few months to know where the money is going. Then the tough decisions come about what really is a need or a want.
    Unfortunately, groceries is one of the few adjustable expenses they can control. That steak may become a rare treat rather than a weekly standby.

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