You’ve been frugal all your life, but now it’s your retirement years, and you’re ready to indulge a little, right? Well, that depends. Our retirement savings typically have to last us many years — and we don’t want to outlive our money.
It can be smart to be somewhat frugal in retirement—or at least to cut expenses if you appear to be on track to outlive your money. Fortunately, there are many ways to do so. Here are 10 ideas.
1. Adjust your housing situation
Since housing costs are often our biggest expense, they offer us many opportunities to economize.
For example, if you’ve been a snowbird for years, flying south for the winters to stay somewhere warm, see if you can find something less expensive. Perhaps you can rent out your main home to pay for it. You can also just sell your main home and buy one elsewhere if that would save you money.
If you own your own home, consider renting a room or two to someone else for extra income.
If you have a sizable home, consider moving to a smaller place or a low-tax state.
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2. Shop smart for healthcare
It’s not only home expenses that can be big — health care costs can be sizable, too, even if you’re on Medicare. Make sure you’re enrolled in the most cost-effective prescription drug plan possible — you can switch plans during every Medicare open enrollment period — and if you take a lot of prescription medications, shop around to see which local pharmacies offer the lowest prices.
Check out a site like GoodRx.com to identify especially low prices, and see whether getting your prescriptions via mail order might be cheaper.
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3. Cut food costs
Food can cost a lot but there’s plenty of opportunity for savings. For example, growing some produce can save you a lot over time. Look for inexpensive recipes that are nutritious, filling, and delicious.
If you’ve been growing tired of cooking and cleaning up and have found that you go out to eat five or more times each week, try to cut that number down to two or three times each week. Dining out more often shrinks your bank account faster.
4. Cut discretionary spending
After housing, health care and food, many of our expenses are discretionary — meaning we could probably do without some of our spending.
Staying home for dinner might let you save money for a fun concert, but plenty of retirees find that as they get up in years, they can have just as much fun — or more fun — doing some low-cost jigsaw puzzles at home.
See what you can trim from your budget without feeling deprived, and bank any savings you uncover.
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5. Be aware of regular bills
Everyone should look over any regular bills that arrive—either quarterly, monthly or annually. You could have been incorrectly overcharged, for example, which has been known to happen with things like hospital bills.
You might also notice charges for a subscription you forgot you had, or maybe you’ll realize you’re spending $150 per quarter and up to $600 per year on some pest control service and decide you’re ready to terminate it.
Go over your bank account statements and credit card bills, too, as these can contain errors costing you money.
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6. Shop insurance
You might be spending $1,200 a year on your home insurance policy and $2,500 on auto insurance. Checking with other insurance companies can help you see who has what deals.
You might move to a”stacked” plan, which allows you to accumulate your car’s uninsured/underinsured motorist coverage (UIM) for each vehicle on the policy. You could double or triple your coverage for very little additional cost and some cost savings if you increase your deductible. Leveraging loyalty programs, usage-based policies, and membership discounts could save even more.
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7. Cancel with vendors
Of course, one particularly effective way to cut expenses is to cancel some services altogether.
You might have both Netflix and Hulu, but then discover you only really watch Netflix, while Hulu is merely a waste of money. Or maybe you don’t watch either — some people find they can do without video services just fine, relying on free TV shows and movies. (Yes, there are free shows and movies online and via cable boxes — search until you find them.)
You can also negotiate with providers, such as those supplying internet service and heating oil. Some can even offer a discount to keep you as a customer, so it’s always worth asking.
8. Beware of scams
There’s a chance you’re aware of scams that can con retirees out of some of their money. But don’t forget to be wary of them. It can be surprisingly easy to make a costly, easily avoidable mistake.
Many people have been tricked by a phone call from someone claiming to be the IRS — offering a sightly scary spin to the threat of arrest or punishment if they do not send money as soon as possible. They send the money to the scammer instead.
Similarly, don’t send money to someone claiming your grandchild is in trouble and needs you to send cash.
Scams can happen, so it’s a good idea to know how to say “No” to someone trying to sell or give you something.
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9. Find a fun side hustle
You might be able to dedicate a little free time to earning money on the side. Fun is key, so you might want to pick up a side hustle you enjoy.
That could be pet-sitting, cat-sitting, dog-walking, or simply reselling things of value that you find at yard sales or thrift shops. Consider helping out in a retirement community or cooking and cleaning for other retirees.
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10. Rent or buy second-hand products
More companies are offering brands they already sell secondhand. That’s how things like REI’s Used Outlet, Levi’s Secondhand, and Renewed by The North Face operate.
So you can score some high-quality items matched to your preferred brand—all in an environmentally friendly way. Shop intentionally, for items you actually need: be wary of bargain hunting or clearance sales to minimize unplanned spending.
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The importance of budgeting money
The truth is that we all should budget and live within or even below our means as best we can at every stage of life. One way to do this is to have a barometer.
Maybe you put on the brakes if you ever accumulate $10,000 in credit card debt. Perhaps you know you’re doing okay if you can pay off your credit cards each month and add $500 to your emergency fund.
Quantifying achievable, short-term goals is essential, whatever your ideals might be.
Of course, if you exceed your spending limits, don’t beat yourself up. Follow these steps to keep spending in line.
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