I tried living on a senior's budget for a month. Here’s what I learned

As a Licensed Insolvencyy Trustee, I work with hundreds of seniors every year. The vast majority express that they struggle to afford basic living expenses, let alone manage to pay down debt. While I can relate to the difficulty of rising costs, I know my understanding of their situation is limited. My closest frame of reference is working part-time as a university student. Even then, I had the luxury of having roommates to split the costs and caring family members who always sent me home with an extra plate of food or bag of groceries.

In March, I decided to put myself in the shoes of Canadian seniors to understand the financial challenges they face living on a fixed income. Here’s how it went:

Income

To create my senior budget, I first determined my living situation and “income.” Many seniors I speak to don’t have a spouse or common-law partner, rent rather than own, and have no additional retirement savings. This means their only income is a combination of retirement benefits like the Canada Pension Plan (CPP), Old Age Security (AOS), and the Guaranteed Income Supplement (GIS), all available to eligible Canadians over the age of 65. On average, these benefits total around $2,432.08 a month, which I used as my base income.

Expenses

Since I live in Nova Scotia, I based my experience on the cost of living in the Atlantic provinces. To generate my expenses, I researched the average cost of rent, electricity, public transportation, insurance, food, medical expenses, utilities, and banking fees in the capitals of each Atlantic province. Averaging these out resulted in the monthly budget below:

This budget has some obvious flaws. First, it relies on public transportation, which is only reliable in some cities. Still, personal transportation wasn't feasible since the average vehicle loan is $600 a month, with an additional $78.89 for car insurance. This budget also lacks additional expenses like life insurance, laundry, subscription services, and debt payments. I either couldn't find an average for most of these or, sadly, they weren't affordable. So, when I look at this budget, it truly is the bare minimum.

The experiment

Most of the items on this budget are fixed expenses with monthly payments, like rent, insurance, internet, and transportation. However, since I already have my own set expenses—and couldn’t move for this experiment—I decided to test my budget with variable expenses like food, entertainment, medicine, and savings—leaving me with a total of $715 a month. At a glance, this felt like a comfortable amount, but with fluctuating prices, I wasn’t sure how far it would go.

I was also keenly aware that $715 is more than many seniors have to work with. If I had added a car to my budget, which could be necessary to access doctor's appointments or groceries in many areas of Atlantic Canada, that money would be gone entirely.

My set expense estimates were also on the low end. For example, where I live in Halifax, the average rent for a one-bedroom is closer to $2,000, not $1,200, and none of my estimates included potential debt repayment.

Because of the cost-of-living situation in Canada, many of the people I speak to who live on a fixed income, seniors or not, have relied on credit to supplement their living expenses. To avoid landing myself in real debt, I set up a tracker with my bank account to hold me accountable to my $715 budget.

Findings

I started strong on March 1. I have always been an avid budgeter with spreadsheets, couponing apps, and financial management podcasts. For the first week, I was doing great, staying home and keeping a close eye on sales at my local grocery store, but that didn’t last.

By the end of the month, I had spent $953, more than $200 over my expected budget. The most frustrating part was that I didn’t fail because of some big financial roadblock like a broken phone or missed bill, but all the mundane expenses that added up quickly. I didn’t spend that money on lavish dinners or expensive clothes. My only entertainment purchases for the month were $30 worth of clothes from a thrift store and a discounted book. What broke my budget were absolute necessities. My monthly food expenses netted out at $473.40, and medicine totalled $402.50 (note: I do have workplace benefits to help offset these costs, but for the purpose of this experiment, I reported what this could cost without insurance). These weren’t expenses I could skip, and even then, I was lucky to be on the low end.

I tried to balance my budget by taking the $75 out of my intended savings, but I was still in debt. If I continued this challenge into April, I would already be behind, sacrificing more savings and potentially having to cut necessary expenses to pay off my debt.

While my experiment wasn’t perfect, it shows why many people, seniors or not, turn to predatory lenders or fall behind on credit card and loan payments when balancing a fixed income. The debt may start small, but as expenses, fees, and interest pile up, it can become unmanageable.

Conclusion

Some seniors may have family members who are able to provide support, but it can still be nerve-wracking to ask for help. For those who don’t have family who can help out, selling underused items or making a few small changes to your budget could be enough to cover a few additional costs. Many cities also have organizations and charities set up to help seniors with basic tasks like transport, budgeting, and meal planning, as well as providing necessities that might be difficult to afford on a fixed income. Depending on your income and location, you may also be eligible for subsidized housing, be sure to do your research and take advantage of all the resources in your community.

Even though it was only for a month, this experiment gave me a better understanding of what life is like for many of the seniors I work with. In the present, I am lucky enough to be in a position where my budgeting and couponing skills are more of a nicety that allows me to save for my future rather than a necessity to manage my financial present, but it’s easy to see how living on a fixed income could make debt unmanageable. For those struggling with debt who can’t find the help they need, debt solutions are also an option.  Cost of living, medical expenses, predatory lending, and much more can lead to financial hardship, and there is no shame in needing help with your debt.

Whether it’s the cost of living, unexpected expenses, or past financial decisions, you deserve a fresh start, and our team is here to help. A Licensed Insolvency Trustee can help you renegotiate with your creditors and find a debt solution that works for you and your budget. Call 1-844-4GT-DEBT or book online for your free consultation.