Cutting Costs in Retirement

Although I have found retirement to be an absolute joy, many people approach this time with some anxiety and that’s usually due to financial or health concerns.  Health problems are a part of life and, if you eat well, exercise regularly and get periodic checkups, there’s not too much more you can do to control your medical future.  Your genes play more of a role than you realize, and longevity is definitely related to your parents and grandparents.  When it comes to money, however, you’re not as helpless as you are in the health arena and cutting costs in retirement is something everyone can do even if they have millions in the bank.  It just makes sense to look at your finances to see if you have opitimized your lifestyle when it comes to what you do with your money.

The first recommendation is to look at your budget.  Hopefully, you have one.  If you don’t, you should create one.  It is a very good thing to know where all of your money goes.  An ongoing tally of every dollar spent is a useful thing for everyone if they are having money problems.  Only when you know where you are spending your money can you get a grasp of how to fix the problems you might have.  This is the first step in cutting costs in retirement and it is wise to keep it as an ongoing practice.

You should know every dollar of your income and where it comes from as well.  If possible, chart your expenses and your income across each month so you can know where you might have a shortfall and plan accordingly.  The yearly tax bill should be something you plan for rather than having it come as a complete surprise.  Look at when each bill comes due throughout the year and determine how your income is received.  Some people get an annual check at a certain time each year so it’s a good thing to know how that impacts your cash flow throughout the year.  We work our taxes so that we always get some kind of a refund in the late spring and we also do a withdrawal from our savings in September to get us ready for the fall and the holidays.  Cutting costs in retirement is an essential part of planning but so is managing the income that you receive.

Cutting costs in retirement may free up money to enjoy life even more.

This website is not meant to provide financial advice but telling you about the benefits of managing your money is essential advice for anyone.  It’s best to see a financial planner for the big decisions like downsizing and insurance policies but they will probably want to begin by knowing how much money you have coming in and where do you spend it so doing the budgetary exercise described above is important.  If you have a mortgage, loans or other debt, you may want to consolidate it all if you can get an attractive interest rate.  Although paying off debt will require a short-term on your savings, it may be a wise thing to do to lower your monthly expenses going forward.  Having a sound money plan is one of the best tools you can have in cutting your costs in retirement.

It’s also good to look at all of your subscriptions and contracts and make sure you need all of them.  We have friends who just went through this exercise and were able to save hundreds of dollars on their cable television and cell phone costs.  Cutting costs in retirement might be as easy as making a few easy phone calls and comparing your current rates with a new provider.

At some point it will probably also make sense to go down to one car if you haven’t done so already.  We’re nearing that point.  It’s nice to have a spare automobile but it would also be nice to cut our transportation costs by going down to one car to maintain instead of two.  The secret to effective cost cutting will begin with a detailed budget and you are the best person to do that.  A financial planner is useful, but only you can determine whether or not something in your budget is worth the cost.  It does sound like a lot of work, but it’s also an exercise worth doing.  Cutting costs in retirement can mean the difference in being able to take that trip or not and saving money can be fun in some ways.  Cooking at home is much cheaper than dining out and learning how to cook might be one of the most enjoyable parts of your day.  Keep an open mind and look at the positive side. Check out all the senior discounts you might be eligible for.  You may be able to “save” your way to a better lifestyle.  There’s always something new to try.  Get to work on that budget.  It’s time to Enjoy Retired Life!

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