In retirement, specific aspects of life can slow down: mornings spent lingering over coffee instead of fighting through a traffic-laden commute, hours of visiting friends and family, and the opportunity to relax without work obligations. Unfortunately, your finances might not downshift in the same way. Health care, car insurance, and even hobbies can take significant chunks out of your budget. While you may not be able to change your fixed income, you can use the following tips to love every minute of retirement while living frugally.
DOWNSIZE
Housing is a hefty budgetary item, even if you have paid off your mortgage. While less square footage might force you to let go of a few possessions, the upside is less expensive property tax, insurance, maintenance costs, and other housing expenses. Plus, it’s cheaper to heat and cool a smaller space.
CUT YOUR HEALTH-CARE COSTS
Unless you take on a new mortgage, you probably won’t have significant expenses other than health care. Fortunately, retirees who are 65 and older qualify for Medicare, which reduces health-care costs. However, Medicare doesn’t cover all health-care costs, meaning you’ll pay out of pocket for numerous services.
You can reduce health-care costs through free courses with your State Health Insurance Assistance Program (SHIP), which provides crucial information on navigating Medicare. In addition, you can save on vision care and hearing aids by paying Medicare Part B premiums. Plus, memberships with AAA and AARP can provide discounts on specific expenses, such as glasses and contacts.
Remember, preventive care is the cheapest and best form of care. Basic home exercise equipment or a local gym membership will more than pay for itself in the long run, as staying active is crucial to physical and mental health.
SEEK LOW-COST ENTERTAINMENT
The best parts of life are free, including entertainment. For example, walking through a public park, borrowing media from your local library, and visiting an art gallery don’t cost a dime. Likewise, your city likely offers numerous free experiences, such as farmers' markets, poetry readings, and concerts. You can also partake in low-cost experiences like hosting your family or friends for dinner and learning a skill like crocheting or creative writing.
Volunteering is an excellent addition to other hobbies or pastimes. There’s no better way to forget about your troubles than to help someone else with theirs. And, serving others is a meaningful way to stay engaged and use your free time without spending money.
PAY OFF DEBT
Debt can weigh down your budget for years, especially if you’re paying a high interest rate. As a result, paying it off as quickly as possible can free up your dollars and save money in the long run. For example, making minimum payments on a $500 credit card debt can cost well over $1,000 before you pay it off. Instead, allocate as much as possible toward your debts to reduce the total paid in interest and fees. If you can take care of it in one fell swoop, all the better. Your bank account might take an initial hit, but you’ll make up for it over time.
AUDIT YOUR BUDGET
If you reach the end of the month wondering where all your money went, it may be time to scrutinize your monthly expenses. Statements from your bank and credit card companies will give you an itemized list of your purchases. You might find that you spent more than you realized on groceries or have a few subscriptions you don’t use anymore. Adjusting these items in your budget can give you more financial freedom.
On the other hand, if you have a goal—such as a vacation—create a line item in your budget for savings. For example, putting $50 each month into a savings account can help you prepare for next year’s travel. You can even automate your savings so that your bank account transfers the money at the beginning of each month without having to move the money yourself.
LOOK FOR DISCOUNTS
Seniors and retirees often receive extra discounts at restaurants and stores. Therefore, when booking a flight or making a reservation, ask about reduced prices or perks for retired folks…you’ve earned it!
EXPLORE WAYS TO MAKE EXTRA MONEY
Enjoying retirement doesn’t mean you have to stop having income streams. For example, you can rent out extra space in your house, start an online business, or do part-time consulting. In addition, if you downsize, you can sell unneeded equipment like your lawnmower and snowblower. Websites like Craigslist and eBay can help you make top dollar on your items. If you’re not tech-savvy, you can bring your belongings to a flea market or throw an old-fashioned garage sale.
