Are you wondering how to live on a fixed or low income after retirement? The idea can be daunting, but there are many ways to save money and live well in your golden years.
Get Started with a Realistic Budget
It takes some time to adjust to retirement, from the change in daily activities to the change in income. Going into it with a clear budget can help ease some of the anxieties you may experience before you retire.
Here are some things to keep in mind as you get started:
- Create a budget that’s realistic based on fixed or low income. This includes making sure you understand how much you spend per week and month.
- If you’ve already been living off a household budget, it shouldn’t be too difficult to make some adjustments. Look for spending that will become unnecessary post-retirement (such as gas for a commute) or that would be easy to adjust (such as how often you eat out).
- If this is your first time living off a budget, you may want to use a free budgeting app, which comes in handy if you do online banking. Or ask a friend or advisor for guidance.
- Prioritize paying off any debt.
- Remember that little savings add up. Make coffee at home most days rather than go to a coffee shop, for example. Or skip extra snacks at the grocery store.
- A budget should not only accommodate your regular expenses, such as a monthly mortgage payment, but should also take into account fluctuating expenses, such as the heating bill, medical expenses, holiday spending, or shopping trips.
As you assess your regular spending habits and consider how to best distribute your new monthly income, refer to the following tips and ideas on how to save some money.
Budgeting Tips for Food
An easy area to save on quickly is food. Shopping sale items, eating out less, and using coupons can go a long way when you are living on a fixed income.
How to reduce your restaurant budget:
- Eat out less often.
- Ask for the senior discount.
- Eat at cheaper restaurants.
- Sign up for coupons and rewards points for your favorite restaurants. Many restaurants offer money-saving apps, but be careful not to download these if you think it’ll be too tempting to eat there more than you can afford.
- Eating fast food? Bring your own drink and don’t upsize your meal. This keeps things more affordable.
- Dining out? Skip the appetizer or dessert to save a little, and look for discounts or specials for date night and group dining deals.
How to reduce your grocery budget:
- Shop at discounted grocery stores.
- Price compare items, especially your household staples.
- Shop with cash instead of a card to ensure you don’t go over budget.
- Buy generic items when you aren’t partial to a specific brand.
- If you like gardening, consider growing your own produce.
- Eating a meatless meal once or twice a week can save money—for example, use beans as a protein for tacos instead of beef, or make vegetable pasta without meatballs.
- Use coupons whenever you can. You can often find them in the local paper, online, or on store apps on your phone.
- Find out if your preferred grocery stores offer a senior discount.
Find More Affordable Ways to Have Fun
You don’t need to spend a lot of money to have fun! There are many enjoyable activities you can enjoy for free or at discounted prices.
- Ask for the senior discount wherever you go.
- Visit places such as botanical gardens, zoos, and museums on free days. You can often find listings online or simply by calling.
- Choose free or affordable activities. Go to a lake or local arboretum, visit a national park (you can save with a park pass), bring food along instead of buying food, or see a matinee movie.
- Activities on the weekdays or during off-season can be cheaper than weekends or peak season.
- Travel outside of peak season.
- Sign up for rewards points for your favorite hotel chain or airline if you travel frequently.
Budgeting Tips for Shopping
Here are some ways to curb impulse buys and make your dollar go further when shopping for clothes, household items, and more.
- Look in the mail for coupons, collect them from the newspaper, sign up for coupon emails, and even ask for coupons at checkout. You might be surprised how much you can save.
- As always, ask for a senior discount.
- Try to limit impulse buying by shopping with cash instead of your card, asking your spouse or a friend to help with accountability, and asking yourself, do I truly need this item? How will this purchase impact the budget?
- Shop at thrift stores or discount stores.
- Shop sales, but be careful not to buy things simply because they are on sale. If you’re on the fence about an item, ask yourself how often you will use it and if it’s a reasonable purchase.
- Use a library card rather than buy new books and DVDs.
- Plan ahead of time what stores you will go to; try not to just walk into a store without a plan of what you will buy.
Budgeting Tips for Financial Considerations
Taxes, bills, debt, and financial aid can be tricky to navigate, but here are some tips to make those topics easier to tackle as you work on your budget.
- Speak with an accountant or tax professional about the tax laws in your area so you understand what you will owe and possibly discover areas where you can save. This resource is also very helpful: https://www.benefits.gov/benefit/722
- Set up auto payments for regular bills. This saves time and stress and avoids late fees. Just check the withdrawals on a regular basis to make sure you aren’t overcharged.
- Look into local, state, and national financial aid programs for senior citizens. You can find these online or by calling a local charity or even asking friends or family. This article also lists some helpful resources that are available to older adults, from Meals on Wheels to financial aid programs: https://www.gofundme.com/c/blog/financial-help-for-seniors
- Pay your credit card bills on time to avoid late fees.
- You may want to consider getting rid of your credit card, or at least some of them if you have multiple cards, to avoid slipping into debt.
Ways to Save on Home and Car Expenses
Without a daily commute and possibly fewer people living in your home, there are some things you can do to cut costs that wouldn’t have been feasible pre-retirement.
- Sell your second car if you and your spouse can share. Or, trade in one or both of your cars for a cheaper one that won’t require you to pay off a loan.
- Explore more affordable car insurance options or ask your agent for information on money-saving programs you may be eligible for, such as safe driving discounts.
- Look for affordable car repair shops near you or learn how to do some repairs yourself.
- You may make the decision to downsize in your retirement years. Caring Transitions can help make that process seamless for you.
- Declutter your home and set aside items you think are worth selling. Caring Transitions offers estate sale services which include appraisal and auction management. We can work with you to liquidate your valuable items.
Cut Down on Your Phone & Internet Budget
Phone and internet services can really drain the money if you aren’t careful. Here are some things you can reassess to save your dollars.
- If you aren’t making the most of your current cable package, maybe it’s time to sign up for a cheaper plan or a streaming service instead, or get rid of it altogether if you just aren’t using it.
- If you aren’t spending much time online, you could discontinue your internet plan and use Wi-Fi at your local library or a coffee shop.
- Trade in your phone or get a budget Smartphone or basic cell phone depending on your needs.
- Get rid of your landline.
- Shop for a cheaper phone plan, but beware of scams as you do so. Ask a lot of questions, even as simple as “What is the actual total I will pay every month, and will it increase at any time?” Make sure you understand the fine print before changing plans.
Save on Your Utilities Budget
How can you cut your electric, gas, and water bills? Here are some ideas.
- Don’t leave your lights on when you’re not using them.
- Don’t leave appliances plugged in; they can actually use electricity when not in use.
- Don’t use a screensaver on your smart TV or computer; just shut it off when you’re done.
- Use a crockpot for some meals as that can be a lot cheaper than using an oven or stove.
- Minimize heat and air conditioning use while remaining comfortable.
- In nice weather, if you have room in your yard and don’t suffer from seasonal allergies, you can air-dry laundry to save on dryer usage. If your laundry room affords the space, you could also air-dry clothes indoors.
- Use your dishwasher rather than washing dishes by hand.
- Don’t let water run when you are brushing teeth, scrubbing your hands, or scrubbing dishes.
Are you retired and looking to downsize? Learn how we can help with relocation, estate sales, online auctions, and more.