Very few Americans have enough money saved for a comfortable retirement. Whether you lost money during the recession, had a financial crisis like massive medical bills, went through divorce, or just never had enough extra money to build up much of a nest egg while working and raising your family, you might be facing an uncertain future without the security you would prefer in retirement.
Since we cannot turn back the hands of time, you must make the most of the income and savings in retirement. One of the best ways to make ends meet with a fixed income is to spend less money. Here are 3 ways for seniors to slash their monthly expenses in 2019.
- Move. Either downsize to a smaller house or put down your roots in a less expensive town. Housing gobbles up more of the budget than anything else for most people.
Benefits of a smaller home:
- Reduce or eliminate your mortgage payment. You might buy a smaller house for cash with the equity you unlock when you sell your home. If you have to take out a mortgage for a smaller house, you will likely have a lower monthly mortgage payment than you did for the bigger home.
- The lower your house’s appraised value is, the lower your property taxes will be. Since real estate taxes can add up to thousands of dollars a year, they affect your cost of living.
- A smaller home will need less electricity and gas to heat and cool. Utilities can run you hundreds of dollars a month.
Why Location Costs You
- Some areas within a community are far more costly than others. You need not live in a great school district after the kids grow up. Those school districts usually come with a hefty price tag.
- Many of the top school districts are in the suburbs, where you must get in the car and drive to shopping, restaurants, entertainment and most anything else. Consider moving to a more urban area, where you can walk to nearby amenities.
- You might save a bundle if you move to a different state with more affordable housing, a lower cost of living and a milder climate that saves you on your utilities.
- Ditch the car. Either sell one of your vehicles and share the other, or get rid of the car entirely. Owning a car can cost you over $10,000 a year, particularly if you have a car payment. Paying for gas, license and registration, personal property tax, routine maintenance, tires, repairs and insurance can use up more than half of your Social Security check. Learn how to share the car with your spouse. Use public transportation and ride-sharing services like Uber.
- Close the “bank of Mom and Dad.” You will not live forever, and your kids must learn how to stand on their own two feet. Better that they learn now, while they have the benefit of your wisdom and advice than later, when they have no such emotional support. Helping your adult children can prevent you from contributing what you should to your retirement or from having enough money for yourself after you stop working. Sit down with your children and explain the situation. Set a timeline for your kids to become self-sufficient.
Laws vary from state to state, so talk with an elder law attorney near you. This article covers the general law, which can differ from your state’s regulations.
The Motley Fool. “5 Ways for Retirees to Slash Their Expenses.” (accessed November 15, 2018) https://www.fool.com/investing/2017/09/07/5-ways-for-retirees-to-slash-their-expenses.aspx