Tips for Retiring on a Small Budget


Consider trying some of these frugal living tips for seniors.

Know Your Numbers

Take a careful look at how you tend to spend money each month. “Divide your expenses between fixed and reducible so you can pivot, make changes or plan for upcoming costs,” says Chantel Bonneau, a San Diego based financial advisor for Northwestern Mutual. 

Fixed expenses are set costs that don’t frequently change, like a mortgage payment or utility bill. Reducible items might be a cable package you no longer need, entertainment expenses that could be lowered or clothing purchases that could wait until a later date. “Know what it takes to live your life so that you’re clear what you have to work with,” Bonneau says.

Keep an Emergency Fund

If you have money set aside in a separate account for unexpected expenses, it may be worthwhile to keep it there. If you don’t have an emergency fund, now might be the time to set one up. Consider keeping enough in the account to cover several months of expenses.

Meal Plan to Save on Food

Frequent grocery trips for a few quick items often leads to a higher food bill. “Plan before you shop, and figure out exactly what you really need. You might use a Monday morning to think about what dishes you want to eat at home during the coming week, any restaurant outings that won’t require a home cooked meal and additional snacks you will want on hand. After making a list, you can go to the store just once for the entire week.

Think About Where to Live

If you’re currently in an area with a high cost of living, it may be wise to think about places in the country where it’s easier to live on less. A move from an urban district to the suburbs could reduce costs. Downsizing is another option. If you want to save on taxes, you could look for a place in a state with lower taxes. 

Buy and Sell Second Hand

Rather than pay full price at retailers, you can peruse thrift stores and Goodwill locations for used items. Online sites for used second hand products abound, including Facebook Marketplace, Craigslist, Sell, Geebo, Letgo and Mercari.

Besides buying secondhand, you might be able to sell what you don’t use. Take note of what you see while shopping at thrift stores and browsing online for previously owned housewares. You might realize you have extra items in a closet or garage that are still in good condition and could be sold to others in your area.

Travel in New Ways

With the flexibility of a freed-up schedule, you might be able to take advantage of seasonal deals, especially as hotels and airlines slash prices in the midst of the coronavirus pandemic. The option of house exchanges and house watching can also lead to low-cost ways to see the world.

Take Preventative Steps

Caring for your current household can help everything last longer. Instead of purchasing a new vehicle, you can schedule regular maintenance for your current auto. Using coverings for patio furniture can help it stay in solid condition, season after season. The same is true for your health. Focusing on daily exercise, healthy meals and solid sleep can help prevent higher doctor bills in the future.

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