Question: Now that Iâ€™ve retired, I have less money coming in every month. How can I save money on everyday expenses?
Answer: Living on a retirement income can be challenging. However, with planning and wise money management you likely can maintain your lifestyle and, perhaps, enjoy some additional perks.
Hopefully, you created a projected monthly household budget prior to retirement with your anticipated income from pension(s), Social Security and other earnings sources.
The second half of the budget equation is your expenses. Suggest dividing expenses into two categories of fixedâ€”such as mortgage/rent, insurance premiums, etc., and variableâ€”groceries, entertainment and the like.
If you need to bring your monthly expenses more in line with available income during retirement, there are numerous discounts and cost saving options available to seniors.
Letâ€™s start with the basics, like food. The average retired couple spends $283 a month on food at home, according to Sarah Szczypinski, a personal finance expert. Using coupons can slash your grocery bill as well as shopping on scheduled senior discount days at your favorite stores. Additionally, you can earn cash back on categories of purchases, like groceries, with certain credit cards.
If you like eating out, you donâ€™t need to rely on early bird specials to save money. There are many restaurants that welcome seniors by offering daily deals, which can help you cut back on some of your variable spending. Also, websites such as www.wisebread.com or www.theseniorlist.com can help you identify restaurants â€” from fine dining to fast food â€” that offer senior discounts.
Retirees often are eligible for lower insurance rates. For example, if youâ€™re older than 55 and have had no accidents or tickets in the past two years, you probably can secure a lower car insurance rate. Services such as Zebra Auto, a comprehensive comparison website for car insurance quotes, can help you identify possible discounts.
Also, groups such as AARP maintain partnerships with insurance companies to offer discounted rates for life, health, and home as well as auto coverage. You should shop around for the best coverage to suit your needs at the lowest costs and donâ€™t forget to take advantage of any membership benefits.
If you have credit card or other unsecured debt, you might consider consolidating these accounts with a home equity or other secured loan for a lower interest rate and usually a much lower monthly payment. Check with your bank or credit union for a review of your current loans to see if a consolidation option would work in your situation.
You can even save on extras such as travel. Retiree families spend more on travel than any other age group, to the tune of $11,077 on average per year, according to AARP. But you donâ€™t need to drain your bank account to enjoy taking a trip. For example, AARP members can book reduced cost vacations, such as a weeklong trip from Seattle to Rome for as little as $1,237 per person, including airfare and hotel accommodations.
Saving money during retirement can be challenging, but with proper planning and disciplined money management you can still live comfortably.