With the cost of living continuing to bite, knowing how to make every dollar work harder has never been more important for retirees. Rising grocery prices, energy bills, and everyday expenses mean many older Australians are looking for ways to stretch their Age Pension further — and thankfully, there are practical, manageable steps to do just that. With a few simple changes, it’s possible to regain a sense of control and confidence over your finances.

Carrie-Ann McLean, author of Budget Right: Eliminate debt and improve your financial and mental wellbeing, says older Australians can take straightforward, immediate steps to get more value from their pension payments and create better financial habits.

“Every dollar counts right now and a few immediate actions can make a big difference,” McLean explains.

A few of her top tips include:

• Track where your money is going – Use a simple notebook or free app to see what’s really being spent weekly. Awareness leads to better decisions.
• Align spending with your pension cycle – Plan expenses around payment dates to avoid late fees and reduce the temptation for impulse purchases.
• Review recurring bills – Energy, phone and insurance providers often have better deals for long-time customers, but you have to ask for them. Don’t hesitate to negotiate.
• Use concessions to your advantage – Pensioner discounts can cut transport, utility and prescription costs significantly. Many people are eligible but don’t know it.

Beyond small changes, McLean recommends following a straightforward budgeting method that provides a clear framework for managing your money — one that balances essentials with enjoyment and helps you feel more secure, even on a fixed income.

“One of the most empowering ways older Australians can manage their money is by following the 70/10/10/10 rule. A simple structure that creates balance and control even on a fixed income,” she says.

Here’s how it works:

• 70 per cent of the pension goes towards essentials: rent, groceries, bills, transport, and medication.
• 10 per cent is for “Splash Cash” or “Enjoyment” – something just for you. Whether it’s a coffee with a friend, a puzzle book or lunch out once a month, this bucket keeps the budget sustainable and prevents feelings of deprivation.
• 10 per cent goes into savings or an emergency fund – even $10 a fortnight builds peace of mind over time.
• 10 per cent can be used for giving, gifting, or future goals – whatever matters most to you.

“What’s most important is giving yourself permission to enjoy a portion of your money guilt free,” McLean says.

“Even during a cost-of-living crisis, setting aside a little for joy and connection can make a big difference to mental wellbeing and help avoid overspending down the line.

“By prioritising your spending with a simple structure like this, you stay in control – making your pension work for you, not the other way around.”

Ultimately, stretching your pension further isn’t about cutting out all the things you enjoy — it’s about being strategic. By keeping track of your spending, taking advantage of discounts, and following a simple, balanced budgeting system, you can create more breathing room in your finances. Most importantly, you’ll be able to continue enjoying life’s simple pleasures — guilt free — while feeling more confident about your financial future.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.