Controlling Expenses after Stopping Work
After retiring, you will most likely be living on a fixed income, meaning that you will have to keep careful track of your expenses each month. Regardless of the level of income you’re going to have during retirement, there is almost always a way to live more frugally. Below are a few tips to help ensure that your investment funds outlive you – and not the other way round.
Be Aware of Current Expenses
It’s far easier to reduce your spending when you know exactly how much you are outlaying for the various categories in your budget. As a result, you should keep careful records of all the money you currently spend because many individuals tend to be shocked at how much the smaller purchases add up to over time.
If you are shocked at how much you’re currently spending in a specific category, you will be even more amazed if you sit and calculate how much that monthly expense will amount to over a full year. For example, if you’re spending $200 a month on fast food and eating out, that amounts to a shocking $2,400 per year!
Eliminate as much Debt as Possible
The average person retiring these days carries more than $6,000 in credit card debt and only repaying the minimum required amount on this balance will cost you more than $22,000 over time.
When you start living on your fixed retirement income, you won’t be able to afford to carry debt repayments and still meet other monthly expense obligations; meaning that you should do everything you can to eliminate all forms of high interest debt before you retire.
Learn to DIY
Once you’ve retired from full-time work, chances are that you will have more time on your hands than you’ll know what to do with. This means that you can now do many tasks yourself that you may have paid someone else to do previously such as cutting your lawn, painting your house or even general housekeeping.
Not only will learning how to DIY tasks like these help keep your budget in check; research has indicated that people who keep physically active during retirement will be healthier and live longer than those who don’t.
Reconsider Phone Plans
While you’re still working full-time, it may be necessary to have a phone plan that provides unlimited data and other features. However, after retiring, you may be able to work with a more affordable alternative. These days, there are many prepaid options that will enable you to keep your existing phone and provide you with far more affordable rates than if you had to renew a contract.
If you’re able to rein in your spending while still being employed, it will make it a lot easier for you to live on a limited income after retiring. We have dedicated and highly experienced team member available to assist you with planning for this stage of your life, so all you need to do is contact our offices and set up an appointment.