We tend to think of personal budgets and managing our household expenses as something that’s we do in order to be able to save for retirement. But it is also extremely important to be mindful of our expenses and cut costs during retirement as well.
In many ways, it can be more challenging to try to balance the budget during retirement because we’re more limited on the income side of the equation. Thankfully, because a person’s lifestyle is likely to be different during retirement in a number of different ways, there should be certain categories of expense that are good candidates for cutting back on.
Here are six expenses to consider reducing once you’ve retired:
1. Your Mortgage. One of the most common goals for individuals approaching retirement is to have their mortgage completely paid off. When a retiree or a retired couple no longer has any significant housing expenses each month, they’ll be able to devote those resources to other retirement related expenses. If you can’t pay off your mortgage, consider downsizing to a house or condominium that you can own outright.
2. Dining Out. It’s certainly not uncommon for individuals and families to spend money going out to eat. Parents are busy at their jobs, as well as shuttling kids to and from school and their various activities, so finding time to cook is often difficult. Dining out generally costs more than cooking at home, but many decide that the trade-off is worth it in order to time.
But once a person retires and is no longer working, the time-saving reason for dining out may no longer apply. By reducing your dining out expenses during retirement you can save a significant amount of money.
3. Life Insurance. This may or may not be appropriate for your individual financial situation, so it’s important to analyze your particular circumstances carefully. In general, most individuals purchase life insurance in order to protect their family’s financial future if the insured party were to die.
Life insurance is generally thought of as a means for a dependent spouse and dependent children to have some measure of replacement for lost income. But once any children have grown up and moved away, the need to replace future income is in large measure no longer present. The need to have that potential replacement income may be necessary for other reasons however.
4. The Second Car. Similarly, once you and your spouse are no longer working, you probably don’t have the same need for multiple automobiles. Go down to a single car if possible and save yourself money on repairs and maintenance.
5. Other Domestic Help. Many working couples use various types of domestic help to help them find enough hours in the day to meet their obligations at work. Once you retire you can cut back or eliminate the house cleaning, lawn mowing, laundry services and other similar expenses and to do those things yourself.
6. Professional Expenses. If you joined any professional associations as part of your career, stop being a member once you are done working, or check to see if you can go to retired or inactive status if there is still some benefit to being a member.
It’s important to stay on top of your finances, even during retirement. Consider cutting back on the six expenses above in order to keep your finances healthy.
Tags: cut expenses, retirement advice, saving money
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on Thursday, September 4th, 2014 at 2:39 pm and is filed under Planning.
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We tend to think of personal budgets and managing our household expenses as something that’s we do in order to be able to save for retirement. But it is also extremely important to be mindful of our expenses and cut costs during retirement as well.
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