Congratulations, you’ve reached retirement age! Let the good times roll—on a budget that won’t break the bank. Here are our favorite ways to face the future without financial fear!
Know the Difference Between Frugal and Cheap
Living as a frugal retiree does not mean spending as little money as possible across the board. When you focus too much on the bottom line, you can end up falling into the trap of a false economy. For example, buying one pair of good, supportive, long-lasting shoes for $100 is a better bargain than a $20 pair that falls apart after a few months and makes your back hurt.
There are other ways that living cheap instead of frugal can backfire. Slashing your grocery budget or heating bill to the point that you make yourself ill, for example, will cost a lot more than investing in nutritious food and keeping your home at a safe, comfortable temperature. With a frugal mindset, you spend money mindfully and never wonder where it all went. You choose to invest in your wellbeing first and prioritize meaningful experiences over impulse shopping. Remember, if you buy something you don’t need on sale, you’ve still wasted money.
Get Your Senior Discount Every Single Time
Always ask if there’s a senior discount. What’s the worst that could happen? If the business doesn’t offer a discount, they’ll tell you. A membership with the AARP can unlock more discount opportunities with an impressive number of hotels, restaurants, and other service providers.
Many businesses offer senior days, where you can save anywhere from 5-20% off your entire bill. If your local grocery store offers a senior day, then arrange your meal plan so that you restock on that day. National chain stores may require you to sign up for a rewards program on your phone in order to get your senior discount, but someone at the store should be able to help you set that up. When in doubt, ask!
Consider Downsizing Your Home
Downsizing isn’t necessarily a fun prospect. Giving up your home may feel like an emotional rollercoaster, but there are real benefits to moving. A smaller home can help you save money in a variety of ways. Moving to a place with one-level living can be good for your health long-term, as stairs may become difficult or impossible as you get older. A smaller home will cost less to heat and cool, cutting down on your utility bills.
If you choose a condo with reasonable HOA fees, you won’t have to worry about maintaining your yard in the summer or shoveling snow in the winter. There are also quite a few communities out there that are ideal for senior living without actually being a “senior community.” These communities are usually full of retirees just like you, so you’ll have a built-in social outlet as soon as you move in.
Rent Out Your Empty Nest
Not interested in downsizing? There are a couple ways you can turn your unused space into cash. The most obvious is to advertise for a roommate. Your best bet might be inviting someone you already know to live with you, but be aware that you should still get a formal lease in writing just to avoid any potential headaches. A spare room could be a great place for another single retiree to share, or you might even find a quiet grad student in search of an inexpensive living space.
If you don’t want to have a long-term roommate, then think about signing up as a vacation rental host. You can charge visitors per night to enjoy your hospitality, and in turn, you’ll get to meet all kinds of interesting people. Of course, there’s some risk in welcoming strangers into your home, so make sure that you go through a reputable site like Airbnb or VRBO.
Finally, you can rent out your spare room, garage, or attic as temporary storage space! This is a great option for retirees who’d prefer to continue living alone while generating income from their homes. There are websites that connect people who have extra space with folks from the area who need temporary storage. They might need to store a car for a week or stash an antique sofa for the winter.
Try Selling Instead of Storing
Speaking of storage, retirement is a great time to take a hard look at how many possessions you own. A recent survey claims that almost 40% of Americans have a self-storage unit. Many of them needed additional storage after filling up attics, basements, and garages first. It’s a useful exercise to divide your monthly mortgage (plus utilities) by the total number of square feet in your home. That’s roughly how much each square foot costs per month. How many of those feet are taken up by things you no longer want, need, or use?
There’s a growing trend of younger generations becoming interested in antiques now that minimalism is no longer as much in fashion. You might find it easier than you think to sell furniture, knickknacks, vintage clothes, and even that old china set you never use. If you want to be totally hands-off, hire a local estate sale service to do what’s called a “living estate sale” for your goods. Some companies do in-person sales over multiple days—kind of like a supersized yard sale—while others take your items off-site for an auction. You can also sell things yourself on eBay, Facebook Marketplace, Craigslist, and other sites online.
Take Advantage of Free or Discount Classes
Seniors can embrace lifelong learning for free—or at least at a steep discount. Some colleges and universities offer totally free tuition for non-degree classes, while others have specialty programs designed specifically for retirees.
With a SilverSneakers membership, you can take free exercise and fitness classes online and at participating gyms. Depending on your Medicare plan and where you live, you may already have access to SilverSneakers and not even know it yet.
If your community has a senior center, then make sure to check out all the events and classes that are offered there. If there isn’t a senior center nearby, then look for a general community calendar. Don’t forget to browse Meetup.com for events with like-minded folks that enjoy similar hobbies!
Free or Cheap Passes to National Parks, Museums, and More
Unfortunately, the $10 lifetime senior parks pass is no more. However, seniors can get a discounted annual pass to every national park in America for just $20! You can learn more about the different park passes here. Most states also offer park passes at a discount to seniors.
Many museums around the globe offer free or discounted admission to seniors. Look up the museum you want to visit and see if you can get a senior discount or even an annual pass. You might be surprised at how much you enjoy visiting smaller museums, which can offer a glimpse into local history or showcase wonderful art by lesser-known artists.
Prioritize Paying Off Debt
We don’t tend to think about interest on debt as a monthly bill, no different from your cable bill. That’s something you need to change if you’re going to enjoy your retirement years. If you’re carrying debt—especially high-interest consumer debt—then make paying it off your top priority.
You can approach debt repayment in three main ways. First, there’s the consolidation option. If you have decent credit, you may be able to roll all of your smaller debts into a single loan through consolidation. If doing so can get you a better average interest rate, then that might be the best choice for you. Otherwise, there are the “snowball” and “avalanche” methods of debt repayment.
In the snowball method, you focus on paying back the smallest debts first while maintaining your minimum payments for all accounts. You’ll pick up momentum as you cross more and more debts off your list, and you can put the money you were spending on the smaller debts toward the larger ones.
In the avalanche method, you target the debts with the highest interest rates first. This makes a lot of sense if you have credit card debt or other high-interest, lower-balance debts. By tackling the debts that are generating the most interest, you’ll pay less in the long run. However, you won’t get the satisfaction of paying off smaller loans quickly, and it requires a lot of discipline to stick to the tighter budget needed to pay off debts this way.
One final note: If most of your debt is linked to your mortgage or student loans, which have higher balances but lower interest rates, then hustling to pay them off as soon as possible might not be the best use of your money. Talk to a financial advisor or accountant about the best plan for your future.
Focus on Your Health First
Without your health, little else is important. Taking proactive steps now to protect your health is the single best thing you can do to make sure that your retirement is a long and happy one. Even if you end up having to spend a little extra money on preventative measures, it’ll be worth it.