Retirement: Expenses to Minimize or Eliminate
Managing Your Finances on a "Fixed Income"
Retirement can be an exciting time. With that freedom comes the responsibility of managing your finances on a "fixed income".
Expenses: to Minimize or Eliminate
ASK YOURSELF THE FOLLOWING QUESTIONS: (Excellent points, condensed to 6, from "Go Banking Rates":
Used or New
Do you need a "new car" or "used"? Purchasing a vehicle is a significant expense in retirement. Especially when car payments are involved. Advantages of a new car are "warrantees". Disadvantages are considerable cost of and "immediate" devaluation of the vehicle's value. Careful research can result in purchase of a "new to you" vehicle that is dependable.
Dream House
When it is "just you or you + your spouse", consider the cost of home ownership (maintenance, utilities, etc.) and taxes for a large home. Avoid making major upgrades. While small improvements can be beneficial, larger projects can be expensive and may not be necessary. "Downsizing" will not only reduce both home ownership cost and taxes and has the potential to also simplify your life.
Putting Your Retirement on a Credit Card
- "FINANCE CHARGES"!! "Paying as you go" is a principle that works and is an absolute must during retirement!!
Lavish Vacations
Lavish vacations are a luxury that most retirees cannot afford. Consider "day trips" or "off season" trips.
Out-of-Network Medical Expense
Cost of health care is high and getting higher!! It pays to check with your health care provider that health care is "in network". This alone, can result in thousands of dollars of savings!! Will generic medication do?
Things Your Kids Should Be Paying For
In a recent financial article, Suze Orman was direct with her counsel: "the sooner parents cut off their children financially, the better it is for them (...and, for you)".
Impulse Buying
Avoid impulsive purchases.
CALL TO ACTION:
* Have realistic expectations of the lifestyle you can afford in retirement. Find the "sweet spot" of responsible spending to enjoy your retirement while planning for future needs (including inflation).
* Stick to a budget. Prepare a frugal monthly and annual budget to assure that you do not run out of money.
* Avoid living beyond your means. Live frugally and secure your future.
* Review and update your long-term financial plan
* Assure that your plan includes a Will and Advanced Directive (Living Will)
FOR ADDITIONAL READING:
"8 Things Boomers Should Never Buy In Retirement". John Csiszar. Go Banking Rates.com 8 Things Boomers Should Never Buy in Retirement (msn.com)
"What Parents Must Do Better". (Includes financial advice) Suze Orman. What Parents Must Do Better (suzeorman.com)
"Don't Put Your Retirement on a Credit Card". Suze Orman. Suze Orman: Don’t put your retirement on a credit card
"Almost 1/3 of Retirees Are Spending More Than They Can Afford - 5 Costs to Cut First". Vance Cariaga. GoBankingRates. Almost 1/3 of Retirees Are Spending More Than They Can Afford — 5 Costs To Cut First (msn.com)
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