You’re in retirement, money is definitely an issue and some budget-cutting is in order. But what to cut? In an excellent usnews.com piece headlined 4 Ways to Reduce Expenses in Retirement, Joe Udo provides several smart ideas. Excerpts from his piece:
“Relocate and downsize. Housing is the biggest monthly bill for most households. It’s a good idea to figure out how to reduce this large bill. Your home is probably located in close proximity to your job. However, that’s not a constraint in retirement because you don’t need to go to the office anymore. Relocating to a more affordable part of the country can reduce your monthly costs. The price of housing is radically different in various parts of the U.S. Moving to a cheaper location will probably reduce other bills as well.
“Retirees also need to take an objective look at their home to see if it is still the right size. You might need a big house when you are raising three kids, but it’s not the right fit anymore if they are off on their own. Downsizing to a smaller home can reduce your costs, and it will be easier to maintain. A smaller home usually means fewer property taxes, a smaller mortgage, less insurance and fewer repairs.
“Do it yourself. When we’re working, it’s easier to hire someone to fix, clean and maintain our home and car. However, you have a lot more time when you don’t have to spend 10 hours per day working and commuting. Changing your car’s oil is easy, and you’ll probably do a better job. Painting your home can cost hundreds of dollars, but it’s not difficult to do yourself. It is just time consuming. You can do more gardening to grow healthy organic vegetables instead of paying $5 for a head of lettuce.
“Reduce transportation costs. Another big bill for American households is transportation. The cost of gasoline keeps going up, and it can be a big part of your monthly expense. The good thing is you won’t have to commute to work anymore after retirement. That will reduce your gasoline bill and possibly your auto insurance bill. One drastic measure is to consolidate your vehicles. If you have two vehicles, maybe you can get rid of one. Some people can even replace their vehicle with a combination of walking, biking and sharing vehicles. If your car isn’t being used that often, selling it off is a great way to save on everything from car payments to maintenance. Biking and walking are healthier options than driving and will help you get some exercise into your day.
“Have fun without spending a lot of money. We all have a bucket list with many expensive items. For example, a trip to see the Pyramids will cost quite a bit of money. To offset expensive international trips, you should aim to have fun without spending a lot of money when you’re at home. There are endless options [for enjoying] yourself on the cheap. You’ll have time to read books and catch up on movies. Outdoor activities like hiking and kayaking are healthy and not very expensive. Many museums offer free or deeply discounted days for local residents.
“The first few years of retirement can be more expensive than you think. Most of us put off traveling and other hobbies because we didn’t have time when we were working. It’s best to enjoy these things while you’re still healthy enough to endure a 16-hour flight. However, you don’t want to deplete your nest egg early, so it’s best to offset your expensive activities with some money saving habits.”