Frugal Living in Retirement to Save Money
June 25, 2009 by Stephen Kersey
Filed under Finance
If you have reached the age of retirement but don’t have the amount of money saved that you wish you had, frugal living in retirement to save money can help you extend your dollar. Basic math tells you that you can extend your retirement savings 20% longer if you can cut your monthly spending by 20%.
If you want to save money in retirement by living frugally, here are a few tips that can help out:
Buy in Bulk
Buying in bulk can help you save money over the long run. This is especially true when buying groceries and other household essentials.
Eat at Home
Eating at home all the time isn’t exactly fun but it saves you a lot of money compared to eating at restaurants consistently.
Purchase Quality
Cheaper isn’t always better. Saving 10% doesn’t make sense if what you buy lasts only half as long as the original product.
Forgo Vacations
Vacations are fun — yet costly. Find ways to have fun at home or at a place somewhere close by in the area that you live.
Downside your Home
If you’ve raised a family and suddenly find yourself in an oversized home, consider selling it and moving into a smaller home.
Save Money for Retirement (Image: Flickr)
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Those in retirement who have begun to draw their retirement savings know most of this already. Those who are not yet there will not be willing to accept a life of austerity (poverty).
A better suggestion might be to have current workers figure out if they can live on 4% of their current retirement investments. If they can not, they are not prepared for retirement and need to rethink their options.
Retirement is not inexpensive and should not be seen as a time when things suddenly cost less. In fact, each expense is magnified. Without any income from a job, the retiree must calculate inflation, taxes (that were deferred), and medical expenses not covered under their health coverage. Housing expenses do not go away (upkeep, taxes and insurance). If you foresee a thirty year stretch without taking a vacation from the everyday, keep working until you can find a way to budget.
While downsizing your home seems like a good idea, most of us (statistics have proven this) shown our attitudes to be quite the opposite. And as my wife always asks when we bring this up: “where would we go?”
Learning frugality is best done while employed – not afterwards!