Retiring can be daunting; it often leads to changes in lifestyle due to a sudden drop in income. Adapting to retirement isn’t always easy, especially if you haven’t saved as much as you’d like. When you know your budget will shrink, choosing where to cut can be challenging.
It is possible to live on a small budget during retirement if you:
- Keep an eye on your spending.
- Set aside funds to cover unexpected expenses.
- Prepare meals in advance.
- A low-cost environment is ideal.
- Consider buying secondhand items.
- Consider alternative travel options to save money.
- Keep your current household.
Try some of these frugal living tips for seniors.
Make sure you know your numbers.
Consider how you tend to spend your money every month. Chantel Bonneau, a Northwestern Mutual financial advisor, based in San Diego, recommends dividing your expenses between fixed and reducible, so you can pivot, make changes and plan for upcoming expenses. A fixed expense does not frequently change, such as a mortgage payment or utility bill. Items that are reduceable might include:
- A cable package you no longer need.
- Entertainment expenses that can be lowered.
- Clothing purchases that can be postponed.
Make sure you have an emergency fund.
Maintaining a separate account for unexpected expenses may be worthwhile if you have money. If you don’t have an emergency fund, now might be a good time to start one. The account should have enough money to cover expenses for several months.
Food Prep to save
Food bills tend to rise when grocery trips are frequent. Planning meals in advance can keep you on budget. Monday morning is an excellent time to think about what you will eat at home during the upcoming week; any outings that may require snacks should also be planned. Make a list, so you only need to go shopping once a week after making it.
Consider Your Living Situation
Those living in high-cost areas may want to consider places in the country where it’s easier to live on less. Relocating to the suburbs could reduce costs. Another option is to downsize. You could look for a place in a state with lower taxes if you want to save on taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming will not charge income taxes in 2020.
Consider a college town in a state with a low tax rate. These towns will usually have good health care options, particularly if there’s a medical school at the university.
Buy and Sell Second Hand
Shop at thrift stores and Goodwill locations instead of paying full price at retailers. Facebook Marketplace, Craigslist, Sell, Geebo, Letgo, and Mercari are just a few online sites offering used secondhand products.
In addition to buying secondhand, you might be able to sell what you don’t need.
Travel in New Ways
The flexibility of a freed-up schedule might allow you to take advantage of seasonal deals. Hotels and airlines slash prices amid the Coronavirus outbreak. Visiting the world on a budget can also be possible through house exchanges and house watching.
Take Preventative Steps
Maintaining your current home can extend its life by caring for it. Rather than buying a new car, you can schedule regular maintenance on your existing vehicle. Keeping patio furniture covered can help it last season after season. Your health is no different, and exercise, healthy eating, and good sleep can help prevent future doctor bills.