Life comes in phases; there was a time when all we had to worry about was just food and sleep. Then suddenly, we grow, and we have to worry about what our future will look like, and we have to strive to be the best form of us.
After secondary or tertiary education, we select a career path and have to get a job. Most people will describe the day they got their first job as a happy one and probably throw a party with few friends.
Now, let’s fast forward to the present moment, we are worried about retirement and life after retirement. This happens almost all the time, and looking back at the moments we have had, we can’t but wonder how time moved so fast. The most crucial issue with retirement is mostly attached to the budget and its management.
Most times, financial advisers will advise people planning for retirement to start spending like a retiree. This is so because switching between modes of spending within a short time might not be very conducive to you and the family. Therefore, preparing yourself mentally is just great. However, even retirees can still maintain a healthy spending and saving plan.
Frugal budgeting is a significant part of living well after retirement. The plan after retirement is to be able to enjoy enough comfort without having to dip much into our budget. As simple as this may sound, it requires extreme discipline to achieve. For instance, if you are so used to spending an average of $100 per day, but suddenly you have to cut your daily expenses to $50.
What is Frugal budgeting? Frugal budgeting can be considered close to financial management but might differ as it is more of an individual effort. Frugal budgeting deals with recognizing our wants and needs as a means to reduce the budget. Regularly, there are things we spend on that are not all-important, but we still spend on them regularly. Identifying our wants can reduce how much we spend without compromising on comfort.
In this article, we will introduce you to some of the frugal tips to have a splendid retirement experience. Before we proceed, note that maintaining constant and slim-fitted expenses is not a “walk in the park.” You will need great determination and self-restriction to achieve this. With that said, let us discuss 10 frugal retirement tips.
10 Frugal Retirement Tips
Choose a Lifestyle
The kind of lifestyle you envision for yourself will determine the right way for you to curb your spendings and save more. Some seniors plan to travel a lot after retirement, this will take away a more substantial chunk of the budget and will, therefore, need to save on other expenses.
Having a clear perspective of the choice of lifestyle you want after retirement will help to understand your wants and needs. Focus your expenses on the important ones and eliminate or reduce your budget on things you can do without. Exercise your Right as a Senior
In the present world, seniors can benefit from so many incentives and discounts made available to them. Many stores and restaurants offer discounts on products purchased to seniors. However, if you don’t ask, how would you know about them? Communication is the key here, learn to smile, and hold a conversation at stores and restaurants with the attendants.
This will help to save some bucks on foods, clothing, electronics, and others. Although it may be small, remember, “tiny drops of water make the ocean.” The aim is to save as much as you can, no matter how little.
Trim your budget for food
Apart from expenses like traveling, tuition fees, and housing expenses, the next most seniors spend on is food. Maintaining a frugal food budget means reducing how much you eat outside. Also, it is essential to buy in bulk when stores are offering discounts on products.
Besides, expenses that go with tipping after meals when eating out must be reduced or totally avoided. Trying out the less expensive restaurants is also useful; this way, you get to try out new dishes and also reduce the amount you spend on food. Many attach good food to high expenses, as this may be through in some scenarios, it is mostly false for most.
Reduce your Cash at Hand
Most times, having restricted access to your funds will help you to save better. Restrict yourself on having access to a lot of cash at hand. If possible, project the amount you wish to spend daily, and stick to it. However, it is impossible to overlook the fact that additional and necessary expenses can show up. Planning with a little extra cash above your planned daily budget will help.
To further maintain a frugal retirement, it is vital to control your cash inflow. Making use of a process known as systematic withdrawal can make it easier. Systematic withdrawal deals with maintaining a constant cash inflow and avoiding overspending. It is also important to mention that systematic withdrawal will assist you in preventing tax issues.
Maintain a Healthy Lifestyle
This is an integral part of maintaining a frugal retirement. Remember, we are trying to cut back on cost on all means possible without affecting comfortability. Staying healthy is an essential step to reducing costs on health care. Regular physical activity has been said to improve the general well being and also help in preventing common diseases.
Physical activity is one way of seniors maintaining a healthy lifestyle, staying up to date with flu shots, and vaccinations are also essential. Another essential angle that must be considered in staying healthy is maintaining a healthy diet. Diet is vital for seniors as it can determine their state of health. Therefore, it is essential to stay away or reduce the food that affects their health.
Never Stop Working
Retirement doesn’t signify that you stop working altogether. So many researchers have aimed to identify the correlation between social isolation and senior’s health. It is crucial to still engage in part-time jobs or online jobs to keep yourself busy. Working will help you reduce boredom since most seniors tend to live alone, and also on the brighter side, earn cash.
It is vital to look for jobs that are with less stress, and you can have enough time to yourself to engage in other activities. There are many freelancing services, such as virtual assistant, data entry, research, and surveys. These jobs will earn you cash and also leave you at the comfort of your home with enough time to engage in other exciting activities.
Reduce your Traveling Expenses
A large percentage of seniors like to go on trips to loosen the stress that has been piled up over the years of working. As lovely as this is, it requires a large part of your budget. Now, we are not going to talk you out of going on your dream trip or tour, NO. But we are going to look at ways to do that without spending all your cash.
Firstly, it is vital to save on hotel bills. As an alternative, there are rooms for lets in apartments that will cost less than hotels. With the development of organizations like Airbnb and CouchSurfing, you can find cheap rooms-to-let anywhere you go.
It is always nice to pay off the debt at once, but in the case of retirement, this might not be the best option for you. Making use of a reverse mortgage is a great tool to assist you in the payment of debts during retirement.
A reverse mortgage is a loan most uniquely suited to retirees, which allows them access to free cash from your home equity. As this might look like an easy way out of debts, it can also be perilous. Therefore it is vital to understand the cons and pros of a reverse mortgage before diving into it.
Trim Transportation Costs
As much as cars are considered a luxury and necessity, the constant maintenance fee attached to it must also be considered. Most will advise retirees to make use of public transport regularly to save on cost. However, that might not be the best option in every case. We will advise you to deal with your transportation means based on your budget.
If you feel your budget can’t sustain the two cars you own now, then you can easily let one go and stick to one. Maintaining a frugal retirement doesn’t entail making yourself totally uncomfortable. Restrict the use of your personal cars based on importance and let public transport handle the rest.
Consider housing Alternatives
Leaving alone as a senior can be very lonely, considering getting a housemate can be the best alternative. With a housemate, you increase your cash input, and you don’t have to be alone anymore. Let your house make you money rather than it consuming your cash regularly due to maintenance.
Another housing option is making your house available for people on vacation that can’t afford to stay in a hotel. As some seniors do value their privacy and don’t like having long-term tenants, this option can handle the problem. You can register your apartment on Airbnb or CouchSurfing; this gives you the avenue to make friends and learn from different tribes in the world.
Should you hire a Financial Advisor?
We have taken you through the best way to maintain a frugal retirement. However, many would suggest hiring a financial advisor as the best means to curb your expenses so, why wasn’t it listed?
The option of hiring a Financial advisor is indeed the most suitable means of maintaining a stable budget over a long period “if” you can afford to hire one. Financial advisers are specially trained to handle finances, and therefore they are expected to perform better permutations and combinations with your budget.
However, it will be so selfish to assume that all seniors can afford to hire the service of a financial advisor. Hiring a financial advisor comes with a price which will add to the existing housing and tuition expenses that most seniors have already. Therefore, considering that a reasonable percentage of seniors might not be able to afford to hire one, developing frugal retirement habits is the nearest and most convenient option.
Your retirement doesn’t have to be so uncomfortable, and YES, you can achieve your retirement long-term plans without dipping into all your cash. As these frugal retirement tips might not be totally sufficient, it will surely help to control your spending.