Living on a Fixed Income When Prices Keep Rising: Practical Budgeting Strategies

When you were working, a price increase at the grocery store was annoying. In retirement, it can feel like a threat. Your income stays roughly the same from year to year, but the cost of everything around you keeps climbing.

Inflation hit 9.1% in mid-2022. It has cooled since then, but prices did not come back down. The eggs that cost $2.50 in 2020 still cost $4.00 or more. Gas, insurance, healthcare, and housing all followed the same pattern: prices went up and stayed up.

For the roughly 50 million Americans living primarily on Social Security and fixed pensions, this is not an abstract economic problem. It is a daily math exercise. Here are practical strategies to make your money stretch further.

Start with a Clear Picture of Your Spending

You cannot fix what you cannot see. Before making any changes, write down exactly where your money goes each month.

Break your spending into three categories:

Fixed costs (you cannot easily change these):

Rent or mortgage
Property taxes
Insurance premiums (health, home, auto)
Prescription drug copays
Loan payments

Variable necessities (you need them but can adjust the amount):

Groceries
Utilities (electric, gas, water, phone, internet)
Transportation (gas, maintenance, public transit)
Medical costs not covered by insurance

Discretionary spending (nice to have but not required):

Dining out
Entertainment and subscriptions
Gifts
Travel
Clothing

Most people are surprised by what they find. Small, recurring charges add up. A $15 streaming service here, a $12 subscription there, and a daily coffee habit can total $100 to $200 per month.

Grocery Strategies That Actually Work

Food is the expense most people feel first when prices rise. Here is how to fight back without eating poorly.

Shop with a list and stick to it. Impulse buys account for 40% to 60% of grocery spending for most households. A list keeps you on track.

Buy store brands. Store-brand products are made in the same factories as name brands in many cases. The savings range from 20% to 40% per item. Over a month, that can mean $50 to $100 back in your pocket.

Use senior discount days. Many grocery chains offer a 5% to 10% discount on specific days for shoppers over 55 or 60. Ask your local store about their schedule.

Buy in bulk for items you use often. Toilet paper, canned goods, rice, pasta, and frozen vegetables keep for months. Warehouse clubs like Costco or Sam’s Club can save money, but only if you actually use what you buy before it goes to waste.

Plan meals around what is on sale. Check your store’s weekly circular before making your shopping list. Build your meals around the proteins and produce that are discounted that week.

Reduce food waste. The average American household throws away about $1,500 worth of food per year. Use your freezer. Eat leftovers. Plan portions for one or two people, not a family of five.

Lower Your Utility Bills

Utility costs have risen 15% to 25% in many areas over the past three years. Here are ways to push back.

Contact your utility company about senior rates. Many gas and electric companies offer reduced rates or budget billing programs for older adults on fixed incomes. You will not know unless you ask.

Apply for LIHEAP. The Low Income Home Energy Assistance Program helps with heating and cooling costs. Income limits vary by state, but many retirees qualify. Apply through your state’s LIHEAP office or call 211 for help.

Adjust your thermostat. Lowering your heat by 2 degrees in winter or raising your air conditioning by 2 degrees in summer can cut your energy bill by 5% to 10%. A programmable thermostat makes this automatic.

Seal drafts. Weatherstripping around doors and windows costs $10 to $30 and can save $100 to $200 per year on heating and cooling. Many utility companies offer free home energy audits that identify where you are losing heat.

Review your phone and internet plan. You may be paying for more speed or data than you need. Call your provider and ask about senior plans or lower-cost tiers. If you qualify for Medicaid or other assistance, you may be eligible for the Affordable Connectivity Program or its successor, which offers discounted internet service.

Healthcare Cost Reductions

Healthcare is often the largest and fastest-growing expense for retirees. These strategies can help.

Review your Medicare plan every year during open enrollment (October 15 to December 7). Drug costs, premiums, and doctor networks change annually. A plan that was a good deal last year may not be this year. Use Medicare’s Plan Finder tool at medicare.gov to compare options.

Ask about generic medications. Generic drugs cost 80% to 85% less than brand-name versions and are chemically identical. Ask your doctor if a generic is available for every prescription you take.

Use Medicare’s Extra Help program. If your income is below $22,590 (single) or $30,660 (couple) in 2026, you may qualify for help paying Part D premiums, deductibles, and copays. Apply at ssa.gov or call 1-800-772-1213.

Look into patient assistance programs. Many pharmaceutical companies offer free or discounted medications to people who cannot afford them. Ask your doctor or pharmacist, or check needymeds.org.

Get your free preventive services. Medicare covers many screenings, vaccines, and wellness visits at no cost to you. Using these services can catch problems early, before they become expensive.

Subscriptions and Recurring Charges

Go through your bank and credit card statements for the past three months. Circle every recurring charge. Then ask yourself about each one:

Did I use this in the past month?
Is there a free alternative?
Can I share this with a family member?

Common subscriptions to review:

Streaming services: Do you need Netflix, Hulu, and Amazon Prime? Pick one or two. Rotate them month to month instead of keeping all of them.
Magazine and newspaper subscriptions: Check if your local library offers free digital access to publications through apps like Libby or PressReader.
Gym memberships: If you have Medicare Advantage, your plan may include free gym access through SilverSneakers or a similar program. Check before paying separately.
Identity theft protection: Some banks and credit cards include this for free. Check before paying $10 to $25 per month for a separate service.
Warranty or protection plans: Extended warranties on appliances and devices rarely pay for themselves. Cancel any that are optional.

Senior Discounts You Might Not Know About

Many businesses offer senior discounts but do not advertise them. You have to ask. Here are some worth checking:

Restaurants: Many chains offer 10% to 15% off for diners 55 or older. Some offer smaller portion sizes at lower prices.
Retail stores: Goodwill, Ross, Kohl’s, and others offer senior discount days or ongoing discounts.
Transportation: Amtrak offers 10% off for passengers 65 and older. Many local bus and transit systems offer half-price fares for seniors.
Entertainment: Movie theaters often have matinee and senior pricing. Museums and national parks offer discounts or free admission.
Auto insurance: Many insurers offer lower rates for retirees who drive less. If you drive under 7,500 miles per year, ask about a low-mileage discount.

Boost Your Income

Cutting costs is one side of the equation. Here are ways to add income.

Check your benefits. Many seniors qualify for programs they are not using. BenefitsCheckUp (benefitscheckup.org), run by the National Council on Aging, screens you for over 2,500 federal, state, and local programs. These include food assistance, utility help, prescription savings, and property tax relief.

Consider part-time work. If your health allows, even a few hours per week can make a meaningful difference. Many employers actively seek older workers for their reliability and experience. Just watch the Social Security earnings limit if you claimed benefits before full retirement age.

Sell items you no longer need. Downsizing your belongings can bring in cash. Furniture, collectibles, tools, and other household items sell well on Facebook Marketplace, Craigslist, or through estate sale companies.

Rent out space. If you have a spare bedroom, garage, or parking space, renting it out can bring in steady monthly income. Programs like Silvernest match older homeowners with compatible renters.

Build an Emergency Cushion

Even a small emergency fund makes a big difference. If your car needs a $500 repair or your furnace breaks in January, having cash on hand keeps you from going into debt or skipping other bills.

Start small. Set aside $20 or $50 per month. Keep it in a separate savings account so you are not tempted to spend it. A high-yield savings account currently pays 4% to 5% interest, which helps your cushion grow faster.

The goal is three months of basic expenses. For most retirees, that is $3,000 to $6,000. It takes time to build, but every dollar helps.

Free Resources That Can Help

These programs and tools cost nothing and are specifically for older adults:

BenefitsCheckUp (benefitscheckup.org): Finds programs you may qualify for
SNAP (food stamps): Many seniors qualify but never apply. Benefits average $104 per month for individuals. Apply at your local SNAP office or online through your state’s website.
Area Agency on Aging: Call the Eldercare Locator at 1-800-677-1116 to find your local agency. They connect you with meal programs, transportation, utility assistance, and more.
Meals on Wheels: Free or low-cost home-delivered meals for seniors who have difficulty preparing food. Find your local program at mealsonwheelsamerica.org.
211: Dial 211 from any phone to reach a local helpline that connects you with financial assistance, food banks, utility aid, and other community services.

You Are Not Alone

Living on a fixed income during a period of high prices is stressful. But you have more options than you might think. Government programs, community resources, and small changes in daily habits can add up to meaningful savings.

Start with one change this week. Review one bill. Cancel one subscription. Apply for one program. Small steps, taken consistently, add up to real results.

Reported by Ellen Murphy with additional research from the SeniorDaily editorial team. For corrections or updates, please contact us.