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Retirement is the light at the end of the tunnel. A lifetime of working hard, saving money, and enduring swings in the market has led us to that promised time of rest, relaxation, and enjoyment. However, not working means that we must rely on whatever money we have stashed away. A big part of that is managing — specifically, reducing — our spending. So how can we successfully reduce our spending in retirement?
Try These Tips to Keep More Money in Your Wallet
Examine Your SpendingThe first step to reducing spending is to figure out what you're spending on! Often, we find ourselves spending money without paying careful attention to where it goes. Take the time to examine your spending in detail: track every single dollar. You might be surprised just how much you're spending at Dunkin' or the salon.
BudgetWhen you're living on a fixed income, budgeting is a critical skill. The best practice is to budget to zero: calculate every monthly expense, and track every single dollar. Plan for every bill and account for expenses and activities. Taking the grandkids to lunch and a movie? Budget for that extra $150. You can still enjoy things. You just need to include them in your budget. This will help you manage your expenses upfront and avoid overspending on unplanned impulse buys.
Click here to learn more about helpful tools and apps for budgeting!
Pay CashAfter you make your budget, take physical cash and set it aside for its intended purpose. Have an envelope for Poker Night, an envelope for Movies With The Grandkids, and an envelope for Grocery Money. Allocating expenses and using cash helps you avoid overspending. After all, those plastic cards can be just a little too easy to swipe.
Shop for Less Expensive ServicesMaybe you've been with your cable company for twenty years without paying too much attention to your bill. It's just another expense, and what working person wants to sit down after 40 hours at work and go through bills? But now that you're retired, you have the time to take a closer look. Great places to save include your phone bill (ditch the landline if you haven't already), your cable bill, and your internet provider. You could potentially save yourself hundreds of dollars a month by trimming or consolidating services.
Click here to learn about streaming options to replace your cable TV!
Shop for Less Expensive InsuranceInsurance is a monthly expense that we just can't seem to get rid of. Still, when we retire, we may have chances to reduce the financial burden of insurance. You are probably driving less than you did before. See if your auto insurer can reduce your rate or shop around for someone who can. Your homeowners insurance company may also offer a senior rate or otherwise find you a discount. Talking to your insurance agent can save you a bundle of money.
Eliminate DebtDebt is nobody's friend, but now that you're retired, you really don't need to be paying interest to a bank. Instead, you need to keep your money! So pay off any credit cards or other high-interest loans, and if you have the financial means to pay off your mortgage, do so as quickly as you can. Ideally, you should have little to no existing debt before retirement, but if you have any debt that has followed you into retirement, consider paying it off as fast as possible.
Manage Your HealthHealthcare expenses in the United States are very high, even for people covered with medicare or private insurance. One of the best ways to reduce your spending and manage your wealth is to take care of your body. Regular exercise, a proper diet, and reducing or eliminating vices like smoking will help reduce your medical expenses by keeping your body well. Are you worried about exercising? Talk to your primary care doctor and ask for their advice: they may know of senior exercise programs or specific exercise regimens that can help with your specific health needs.
Reduce Automotive ExpensesMany families have two cars, but do you really need both vehicles if you're done working? Cutting a car cuts your cost of insurance, not to mention the gas and maintenance expenses. If you live in a city or an urban area, you might be able to go completely car-free — and a lot of transit companies offer senior discounts that can save you money on fares.
Enjoy Free StuffFree entertainment is often the best kind! One great place to start is your local library. Membership in public libraries is free, and you will have access to tons of books and magazines. Most libraries also offer DVDs or other multimedia to their members.
The park is a great way to enjoy something for free. Taking a leisurely stroll through the park to admire flora and fauna is a great way to stay entertained and get some exercise. Some cities even offer free live music in their parks from local bands or orchestras!
Senior DiscountsSome of us might not be comfortable with the label "senior citizen," but we should darn sure be comfortable with that senior discount. Many establishments offer senior discounts, and you should absolutely take advantage of these cost savings. Not only can you find senior discounts at restaurants and shops. In many places, senior citizens get discounted admissions to museums, parks, and other attractions. State and National parks generally offer senior discounts to their visitors as well!
Travel in the Off-SeasonA very common retirement goal is to travel, and why not? It's great to see the world! But traveling can be expensive. A great way to reduce costs is to travel during the off-season. For example, if you've been wanting to take a trip to Key West, you should probably avoid traveling during the spring break season. Have two must-see destinations that are close together? Try to bundle them into one trip to save yourself the cost of a second flight or a second drive.
Spend Less, Live More
These tips should be able to help you reduce your spending during your retirement years. Living on a fixed income requires some careful planning, but it doesn't mean you have to live less. Finding ways to trim your expenses and letting go of the impulse to always be buying will help you spend your golden years in the best way possible: spending less and living more.
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