budgeting tips

Recently Retired? Use these Budgeting Tips to Get Ahead in the New Year

Now that you’ve retired after working hard for the past few decades, you’ll want to spend some of your free time enjoying yourself as much as possible. However, it will now be more important than ever to create an effective retirement budget that will ensure that you don’t run out of money – especially if you know that you won’t be able to go back to work at any time. 

Below are some tips that will enable you to budget your retirement income as effectively as possible:

Know how much you’ll Need Each Month

Most individuals spend less after retiring than they did while working and financial experts suggest that expenses during this time of your life will be up to 20% less. For example, if you spent $2,000 while employed, chances are that your post-retirement budget will be approximately $1,600 per month. Keep in mind that this scenario is not absolute – some retirees will need to spend more than others. 

Determining how much you’ll need each month will involve making a list of all expenses such as rent/mortgage, property taxes, transportation, groceries, medical expenses, subscriptions and any other discretionary expenditure.

Shop around to Try and Reduce Regular Bills

If you’ve grown accustomed to using the same utility companies, cell service providers, insurance companies or any other providers that charge monthly rates, chances are that you may not be getting the best deals possible anymore. 

Nowadays, companies often change their offerings without informing existing customers. It’s recommended that you take some time to review all existing policies; subscriptions and recurring bills to see if any better rates can be negotiated – over time, this could reduce the amount of money you need to live on each month quite substantially.

Consider Moving to a Lower Cost of Living Area

The lower you can trim your monthly expenses, the further your retirement income will go – and one of the best ways to reduce the amount of money you need is to relocate to an area that’s more affordable to live in. Examples of states that offer lower costs of living include Ohio, Tennessee, Kentucky, Alabama, West Virginia, Missouri, Nevada and Indiana.

Downsize your Living Space

Regardless of whether you still carry a mortgage or not, holding on to the large family home where you raised your children may not make the most sense financially. It may be a good idea to sell up and purchase a smaller property that will be easier and more cost-effective to maintain. This will not only ease your budget; you’ll also be able to enjoy more free time because of having less maintenance and cleaning to do. 

It’s also important to remember that a lot of fun can be enjoyed for free or at very low cost when you’re a senior citizen. Community and senior centers often have several activities on the go, while museums and a number of other public entertainment venues offer steep discounts to older persons. 

If you would like advice regarding how to stretch your retirement income as much as possible without having to resort to drastic measures, contact our financial advisors today.