Author: Maria Alfano
Living on a fixed income can be difficult so to save money plan with the end in mind. You are planning for, reaching, or have just retired. The cash flow will not be the same as it was when you were employed. Now you need to figure out who to live on less money than you were ever accustomed to having come into the bank account. What do you? Where do you start? How will you make ends meet?
Have no fear! Millions have of people have figured it out before you and so will you.
Trying to figure out how to live on less than what you were making over the last 30-40 years is scary. At this stage in your life, hopefully, you don’t have a mortgage or a car note. The credit cards are paid off and you have some funds stashed in that old mattress in the spare room! All joking aside, you have become comfortable with your lifestyle and don’t look forward to changing it. There are some really simple things you can do to minimize the impact and the trauma of your diminishing monthly income.
Save Money – Plan By Starting With What You Need
So where do you begin? To save money plan for the necessities first. Start with the end in mind! If dipping into your savings is not an option, then let’s pretend you have any. What is your new monthly income going to be? The end result is to make the money last beyond the end of the month.
This post will give you ideas to cut costs and save money on the monthly expenses while allowing you to continue to enjoy a nice lifestyle into retirement and beyond.
Budget
I know that “budget” is a dirty word, but I promise this will be a quick and easy task. You know how much money you will bring in each month so start there. On a piece of paper, an excel spreadsheet, or on your mobile device the top line is going to be the gross monthly retirement income. Next, make a list of all the mandatory expenses. Lastly, make a list of all the optional expenses you will incur.
Required Expenses
These are expenses that you cannot avoid – housing, car, food, utilities. I would hazard to say that you should add put money into your savings should be a required expense and part of the save money plan (even if it’s only $10 a month. Total these all up. Now subtract from the first line. What’s left? Is this a positive result or negative? Are all the bills covered? If yes, then great. But, if not, then we need to make some adjustments in order for you to afford to live day-to-day and have a little fun.
Optional Expenses
What are these optional expenses, you ask? Well, things like dinner out, gifts for the family, hair cuts, visits to the spa, travel, or a new wardrobe and shoes. If you put a little aside each month for these optional expenses, then you won’t be hurting when you need to fork out the money for little Johnny’s birthday gift. Make your list of optional expenses and determine how much you want to put aside each month for each expense.
Once you have totaled up all your required and optional expenses, you subtract from the gross monthly income and have created a very quick and easy budget. The goal is to have the funds put aside and not spent until you need to use them. Keep your hands out of the cookie jar! As for any balances left at the end of the month, you can do one of two things – 1) put the extra into your savings account, or 2) leave it in the checking account in case of emergencies.
Save Money Plan
There are so many ways that you can save money on the monthly budget whether you are retired or not. Below are some ways to reduce costs without impacting the way you live.
Mobile phone – get a plan that gives you shared minutes and shared data. If you and your partner both need your own phones, this is a great way to cut the cellphone bill by 30-50% each month. This works best when there isn’t heavy usage each month. The best thing of all, is you keep your current cell number.
Landline – a home phone is not required when you have a mobile phone. The mobile works just as well inside the house as it does when you are on the road. A home telephone is definitely a thing of the past and you really can live without it. Anyone who is important in your life has your cell number so they won’t have trouble calling you there instead.
Cable TV – monthly cable bills can be exorbitant. Do you need all those channels and features? Why not consider an android box? Cut cable costs up to 80% per year with an android box.
Groceries – buy only what you know you will use between shopping trips. Some folks tend to stop pile their groceries and end up throwing things away because they go bad. Consider more frequent trips to the supermarket. Go twice a week instead of once per week. Have your list ready and don’t stray from it. This will considerably reduce your grocery bill and the amount of food you toss out. You may also want to consider growing your own veggies and herbs or making your own preserves.
Don’t be shy to use coupons or to shop from the flyer. Weekly specials are a terrific way to reduce the food bill. They are also a good way to save on non-perishable items. When your favorite tissues, toilet paper, or paper towel go on sale, pick up a little extra (within budget) to last you longer than normal. Next time you go shopping these items won’t be on your list.
Electric Bill – this is the easiest place to save money on your utilities. Did you know that when something is turned off (like the tv or computer) it’s still drawing on the electricity? Whenever possible, make it a habit to not only turn off the lights when you are not in the room but unplug things that you are not using. Take the kitchen for instance. Unplug the kettle, the toaster, the toaster oven, the coffee pot, or any other small appliance that you use only once a day. You can plug them back in when you need them. Night lights are popular but you don’t need them during the day. Pull them out of the socket until it starts getting dark. Switch all the light bulbs in your home to LED. They burn less energy than incandescent bulbs. This alone can save you 2-5% on your electrical bill.
Late fees – this may not apply to you but those late fees can add up each month. The easiest way to avoid these is to post-date the payment by sending the check early with the date of the bill or add the amount with the payment being the day before the due date to your online banking.
Interest fees – credit cards balances that you carry month over month are stacked a mile high with interest charges. Do your best to pay off the balance every month. If you can’t afford to, then plan to pay more than the minimum required balance. Also, consider making a payment every week instead of once per month. Interest accrues based on the balance owing at the end of the billing period, if you are constantly reducing that balance, the interest is also shrinking.
In Summary
No matter what your monthly income is after retirement, to save money plan with the end result in mind. You can make the month run out before your money does with these simple adjustments to your lifestyle. You won’t miss a thing and you will enjoy life more than you ever did before.
We would love to hear from you. Which of these tips was the most helpful to you? Do you have a money-saving tip you would like to share?