Posted by Trying to pay the bills on a fixed income has turned into a difficult task in 2022. My girlfriend recently had to quit her job for medical reasons. She was bringing in about $450 each week. That amounts to $1800 that we won’t have to help pay our bills each month. It will be several years before we can apply for social security to fill the gap. That means that the money will have to come out of my savings and retirement accounts. In the first six weeks of 2022, those accounts have lost about 4% of their value. In addition to watching my retirement balance shrink each day, the price of everything is going up. This is a bad combination if you retired early.
The stock market sinks and the price of everything increases until people no longer have enough money to pay their bills. It seems like a devious plan to get the people who decided to stop working during the pandemic to return to the workforce. It’s not that dire for me yet. I’m waiting for interest rates to go up. I remember the days when I was getting $400 each month in a money market account. The rates would only need to reach 2% for that to happen again. Next month I will need to start withdrawals from my IRA. I don’t look forward to that, because it means that my lifetime net worth probably peaked late last year.
I need to decide where the money will be transferred and how the bills will be paid. I will need about $1000 each month to pay recurring household bills. Right now, I transfer money from an investment account to a checking account and then pay the bills online out of that account. I don’t want to transfer $1000 each month because of a new rule that banks now have to report transactions over $600 to the IRS. Instead, my plan is to continue the current transfer to my checking account and transfer $500 each month from my IRA to my investment account. Then, setup the investment account to pay bills online and pay the monthly credit card bill from there. The credit card bill can fluctuate between $300 and $600 each month and is the biggest monthly expense next to the mortgage and property taxes. I’m bracing myself for auto and home insurance rate increases. So far, every other bill has increased this year!