How to Reduce Your Living Costs in Retirement
Once you retire, you have time to pursue your hobbies, enjoy friends and family, and do a little traveling. But if you’re like most people, you will have less income than when you were working full time. To maximize your finances in future retirement, follow these tips to lower your expenses and still enjoy your golden years to the fullest!
Move to a Low Cost of Living Area
Another way of How to Reduce Your Living Costs in Retirement is relocation. If you’re living in or near a large city, your cost of living is probably higher than average. Necessities like housing, fuel, food, and medical costs tend to be higher in cities than small towns. Property and sales taxes are also usually higher. Moving to a smaller town or more rural area can save you money. Small towns also tend to be less stressful and safer than big cities. Many retirees decide to move to states without state income taxes as well. These are Washington, Wyoming, Nevada, South Dakota, Texas, Florida, Tennessee, and Alaska.
Go in With a Paid Off Mortgage
To downsize or relocate, you’ll probably use the equity in your existing house to buy a new home. This is where a paid-off mortgage can be a huge advantage. You may have to start planning many years in advance, of course. As your budget allows, make extra mortgage payments in addition to your regularly scheduled payments. You can add to your regular payment each month; for example, if your payment is $1,500, you can pay $1,700 and pay off the actual mortgage much quicker. Just make sure you specify that the extra amount should be applied to the principal of your loan, not the interest. Check that your mortgage does not have a prepayment penalty. Refinancing to a 10- or 15-year mortgage may also help. Your monthly payments will be higher, but you will accelerate the payoff date.
Reduce Water Usage
Whether you stay put or decide to move, reducing utility costs is a must. Cutting down on your water usage can save you hundreds of dollars over a year. The first step is to check your plumbing and fixtures for leaks. Next, replace toilets with newer, water-efficient ones. There are also water-saving devices you can add to your existing toilets. Low-flow shower heads are also easy to install. Changing your habits can also reduce water usage, and retirement can help with that. Since you don’t have to dress for work, you might have less laundry, and you can cut back on washing.
Adopt Energy Efficient Features
Making your home energy efficient will also help cut down on your monthly bills. Consider replacing older washers, dryers, refrigerators, or dishwashers, since new appliances are engineered with energy-saving features. It’s also important to consider the costs of heating and cooling. Check on your home’s insulation and examine all windows and doors for cracks and gaps. Add caulking and weather stripping as necessary, but if you have an older home, think about replacing your entrance doors. Newer doors are made of insulated materials such as steel and fiberglass and fit more snugly than older doors. Efficient doors keep your energy bill down by taking pressure off your HVAC system.
Reduce Vehicle Costs
Once you’re retired, you won’t have to make your daily commute, and you may find your monthly gasoline bills are decreasing. On the other hand, since you have more time on your hands, you might be driving more frequently for recreation, vacations, and visiting. Good driving habits, such as reducing speed and combining trips, can reduce fuel consumption. Also, have a mechanic look over your vehicle to see if it’s operating efficiently. Many retired couples find they can manage with just one vehicle. Others, as well as single people, can save fuel by trading down to a smaller vehicle or a hybrid.
Downsize Your Wardrobe
Working people often need two wardrobes, one for their job and one for every day. With work out of the picture, you’ll be living in everyday clothes most of the time. Clean out your drawers and closets and decide what clothes and shoes you need to keep and what you can sell, donate, or discard. As time passes, you can buy classic styles and replace items only when they wear out. You’ll save hundreds of dollars each year. And, reducing your wardrobe means less clutter and less stress.
Take Those Senior Discounts
You may be startled the first time someone offers you a senior discount, but you’ll soon get over that. Being retired comes with perks, and the wise consumer will take advantage of them. You’ll notice many businesses such as stores, restaurants, movie theaters, and even oil change services will offer senior discounts or special days of the week (usually Monday or Tuesday) where seniors receive a percentage off purchases. The minimum age for these discounts varies. Most discounts start at age 55 but some don’t begin until 62 or even 65. There are also retirement associations, such as AARP, that offer discounts and coupons. You might also be able to save on necessities such as car insurance or property taxes, depending on your circumstances.
Look for Free Entertainment
Retirees have more time for fun, but things like movies, concerts, and professional sports games can be costly. Yet, if you look around your community, you can probably find entertainment that’s inexpensive or even free. Local parks and recreation associations may offer free or low-cost team sports, exercise groups, dance lessons, yoga, or other activities. Continuing education classes may also be free at a nearby college or university. Many seniors enjoy learning new languages, taking art or photography classes, or creative writing. Libraries often host author events or organize book clubs. Most towns also sponsor free festivals, concerts, parades, arts and crafts fairs, and more.
You’ve worked hard for years, and you want to make the most of your retirement years. Even if you’re already retired, you can take steps to reduce your bills and live efficiently. With a little preparation, you can keep living expenses to a minimum, leaving plenty of room in your budget for hobbies, traveling, and socialization. We hope you found our tips useful on How to Reduce Your Living Costs in Retirement.
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