Making your money last in retirement is similar in many ways to making your money last when you’re not retired. But, there are a few differences. The obvious one is that you don’t have the option of replacing money that you’ve spent, at least not without coming out of retirement. Also, when you’re retired you have to contend with the effects of inflation, and generally the amount you can earn on savings does not keep pace with the effects of inflation. So you must also deal with attrition due to inflation.
So how do you make your money last? First, spend wisely. Be sure that you have a budget that you can live within our below that will allow your money to last. Take advantage of sales, special discounts (such as senior citizen discounts), coupons, and two-for-one specials. When you’re retired, you’ll likely have more free time, so you’ll be able to shop on special days when discounts are given. (Here at least, seniors can shop on Tuesdays in many stores and receive a 10% discount or more.) Simply changing your shopping schedule can add up to quite a savings.
Second, be sure your money is safe. Keep in it insured accounts with the amount of risk you can afford. Avoid unsolicited investment offers, especially from people you don’t know. (But sometimes also from people you do know!) Get financial advice from a certified professional that charges based on a flat rate. Be sure that person is not the same person that’s in charge of investing your money.
Finally, get adequate insurance, especially long-term care insurance and health insurance. You don’t want your hard-earned retirement money eaten up by hospitals and medical bills if anything should happen.
Somewhere along the line, saving money moved from a constant struggle to a fun addiction. Once I reached the point of making saving for various things a habit, something magical happened. Saving up money became fun. Addicting, even.
As time goes on, I find more and more things to save up money for. Which isn’t to say that I’ve become a miser — on the contrary, I’m spending more money now than I even made at all for several years. And the short-term savings does get spent — it just gets spent in a lump sum on fun and memorable things that I look forward to, instead of in dribs and drabs on little things that are soon forgotten.
How did this happen? It became easier and easier to save up money because I changed how I did it. When we get paid, I immediately send off money to various savings accounts. It’s the very first thing I do. That isn’t the big change though, because I’ve always tried to save using that method.
What’s changed is that the money is now designated for specific purposes. It’s not just earmarked for them, it’s strictly for them. It’s a shift in attitude. I no longer think “well but if things get desperate we could always use that money” in the back of my head. Why? Because we already have money set aside for emergencies. That money is held separately, and it too is only for the one purpose.
Plus it’s a lot more fun to know that if you put money in an account for a trip, that you really will use it for that trip. Knowing that it won’t get conscripted for some other, less pleasant thing, gives me a greater incentive to save. So much so that saving money has become addicting.
Take a few minutes and think about all the little things you might do each day that would save some money, improve your health, and save lives — your own in the short term, your children’s in the mid-term, and the earth’s in the not-so-far-away-either term.
Little things, like..
Eating locally, or at least eating foods that are in-season. Drinking tap water from a glass, not a bottle that was trucked in from who-knows-where. Using that same water glass all day long, or heck, for however many days it takes until it gets dirty. Using cloth napkins. Using torn-up tee shirts instead of paper towels. Cleaning with baking soda & vinegar instead of harsh chemicals. Washing your clothes less frequently. (Such as when they’re actually dirty, instead of every time you wear them.) Changing some light bulbs. Walking instead of driving. Combining trips if you do drive. Turning the water off while you brush your teeth. Not using your toilet as a trash can. Recycling glass, paper, and plastic. Buying things with the least amount of packaging available.
Every. single. one. of those things can make your life easier, save you money, help you live a healthier life, or all three — and they’re all extremely easy to do.
As I was taking a shower the other day, I noticed that the shower wasn’t draining properly. There was some soapy water collecting on the bottom of it – just sitting there. So I turned off the shower for a minute while I finished washing my hair to let the water drain. When it had drained away, I turned the shower back on and rinsed off. That’s when it hit me — you know, I could save water by doing this. I mean really, do I need the water running while I put soap in my hair? Of course not. While that wouldn’t save us much money, since water is so cheap here, conserving water is always good, and frugality in one area often leads to frugality in other areas.