Cutting Out These 9 Expenses Will Save Retirees Over $29,000 a Year
Most retirees live on a fixed income, so finding ways to reduce expenses and save money is vital. This isn’t always easy, especially if you’re already living with the least amount possible, but it’s sometimes necessary for your peace of mind and financial stability.
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But which expenses can you ditch without too much hassle, and how much can you save each year? The short answer is that you can cut out these nine expenses and save over $29,000 a year, depending on where you live.
Here’s a breakdown of some costly expenses to cut out during your golden years.
Storage Unit Rental
Savings per year: approximately $2,160
Do you own a lot of things that you keep in a storage unit? If so, you could save money by emptying that unit and selling what you’ve got.
“The average price for a storage unit rental is $180 a month. If you aren’t using what’s in the unit, do you need it?” said consumer finance expert Tanya Peterson, vice president of brand with Achieve.
And if you do sell what you’ve got, you could make anywhere from a few hundred dollars to $1,000 or more.
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Personal Vices
Savings per year: varies from $1,200+
Everyone has a personal vice or two. Depending on what yours is and if you’re trying to get rid of it anyway, this could be another area to cut back and save money.
“Identify and cut down on your vice, whatever that may be. It could be alcoholic beverages (at home or at a restaurant), smoking, lattes or chocolate (given the rising cocoa prices, that could be a real area of savings),” Peterson said.
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Streaming Services and Cable
Savings per year: approximately $1,200
Streaming services can add up. If you find yourself with multiple subscriptions or even if you’ve got a cable that you don’t use much, see if you can cancel a few or change your plans.
“A retiree who cuts an expensive cable TV package and several less-necessary subscriptions can save as much as $100 or more per month,” said Erika Kullberg, attorney, personal finance expert and founder of Erika.com.
Dining Out
Savings per year: approximately $2,400
“Forego eating out. Tired advice? Maybe. But given the cost and potential savings, it is worth paying attention to,” Peterson said. “Many retirees eat out or get takeout at least once a week.”
These costs can add up fast, especially if your partner also goes out to eat with you or you order appetizers or drinks when you’re out. Saving the dining out for special occasions or splurging every once in a while rather than make it a weekly habit.
Life Insurance Policy
Savings per year: varies from $2,000 to $3,000
Life insurance makes sense at a certain point, but ask yourself whether you still need it once you’ve retired. If the answer is no, that’s a good deal of cash to allocate elsewhere.
“If you are paying premiums on a large life insurance policy, but no longer are supporting dependents, judge whether you should redirect those payments to another source and adjust the budget accordingly,” Peterson said.
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Basic Living Expenses
Savings per year: varies from $2,000 to $3,000
Depending on where you live and what you need, you could save a ton of money by downsizing and moving to an entirely different area or a smaller home.
“This is a more drastic step, but living expenses are generally a person’s greatest expense. If a retiree lives in a very expensive area, they may consider moving to a more affordable one,” Peterson said.
“That does not necessarily mean selling a home in a major coastal city and moving to a small town in a rural state,” he said. “Many seniors can generate a substantial profit on selling their home and moving to a nearby suburb or simply to a smaller place.”
Your Car
Savings per year: varies from $12,000+
According to AAA, the average annual cost of owning a new car hovers around $12,000. If you have two or three vehicles, you could be looking at spending a lot more money than that.
“For retirees, downsizing from a two-car household to a one-car household, using mass transit or maybe even walking or bicycling for errands can mean saving hundreds to thousands of dollars yearly on gasoline, maintenance and insurance,” Kullberg said.
Car Insurance
Savings per year: varies up to $2,008
The average cost of full coverage car insurance is $2,008, according to MarketWatch, but if you don’t have a car anymore or if your driving habits have changed, you could save a lot of money here.
“Retirees can also lower auto insurance costs due to reduced mileage. For example, if you go from driving 12,000 or more miles a year to 6,000 or less, your monthly car insurance costs can decrease significantly,” said Annette Harris, accredited financial counselor (AFC) and owner of Harris Financial Coaching.
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Travel
Savings per year: approximately $3,982
According to Budget Your Trip, the average weeklong trip in the United States costs $3,982 (all expenses included). Overseas trips can go for a lot more than that. If you cut out travel, or if you switch to taking trips once every other year or so, you could save a lot of money.
Of course, you’ll still want to enjoy your retirement life. If travel is an essential part of that, look for other ways to reduce costs. This could mean traveling during less expensive times of the year or looking for cheaper bundle deals or travel discounts.
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