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Monday, October 28, 2019

Five Lifestyle Changes For Low Budgets

When you convert to a fixed income, you may suddenly need some lifestyle changes to stay in your budget.

Money that you thought would last can get eaten up in retirement, or your nest egg may not hatch the dollars you need to get you by. Many retirees live on Social Security alone, and often find it doesn’t stretch very far. But instead of worrying over how you’ll get by, check out these five proven methods to make your money go a lot further.

1. Volunteer more of your time. 

This sounds counter-intuitive because you won’t get paid, but it works. Most people fill up free time with hobbies. But gardening (fertilizer, plants, potting soil, containers, gardening tools), golfing (greens fees, outfits, shoes, clubs, lunch at the course) and other pursuits can wreck your budget. Even cheap entertainment, such as early-bird specials, can cut into your financial plan. Volunteering, on the other hand, takes up your time without cost to you and can offer added benefits. You’ll make new friends, learn skills and get the kind of satisfaction that only comes from giving.

Visit VolunteerMatch to find opportunities in your community. You can also try Volunteers of America to help those in need, or check with your local animal shelter. It’s easy to feel isolated and deprived on a tight budget; volunteering is a great way to get some perspective.

Rent Out a Room

What if your house is too big for you, but you can’t bear (or just don’t want) to move? Having a housemate (or two!) is a movement that’s sweeping the country as the cost of renting continues to rise. Older adults may be especially glad to have someone else living with them for added security and to make the house a bit livelier.

You can put up a free ad on your local Craigslist under “Housing — rooms and shares,” but you don’t always know exactly what you’re getting. It can be hard to find just the right rental agreement, and what do you do if the tenant doesn’t pay on time?

Enter Silvernest, a company that manages all the tricky bits for you. Silvernest will match you with potential housemates that have been background checked, and they’ll handle the home share agreement as well. Or you can fill out a profile to become a renter in the home of another adult. Adults of all ages may host or rent to older adults, so if you prefer the energy of a young family, great, and if you’d rather be around one quiet older adult, the folks at Silvernest can make that happen, too. The site says the average renter will save $9,000 a year, and the average host will bring in $10,000.

Switch Homes for Vacation

You may have decided that vacations are a thing of the past as you adjust to a new budget, but not so fast. Your biggest expense is usually lodging, and you can avoid it entirely by swapping homes with someone else. You may think that’s way too risky, but you probably haven’t checked out sites such as Home Exchange where interested parties sign up and are verified. You can take a virtual tour of homes that interest you, or even plan a non-reciprocal exchange. Even renters can check out this service.

Still a bit dubious? Check out travel blogger Rick Steves’ article on house-swapping tips aimed at a European stay, but applicable anywhere. He guides you to several sites and offers invaluable information borne of experience.

2. Sell your extra car.

Many couples, in particular, have two cars out of habit, not necessity. At an average $6,814 a year, transportation is typically a retiree’s second-largest expense. Sell (or donate) one of the cars, and watch your gas bill and insurance costs plummet. You may talk with your spouse more as you drive each other to events, or download the Uber app so you’ll always have a ride. Heck, you may even decide to give driving for a ride-share service a try!

If you’re already down to one car, consider giving it up. Check out public transportation (bus, light rail, train), or walk and bike to more destinations. You’ll be surprised how much you can save.

3. Downsize your home. 

Since housing is the biggest expense for most retirees, it’s a good place to look when you need to pare down costs. You can lower mortgage or rent payments, or get a chunk of change back out of a home that is paid off. And with a smaller space to heat, cool and maintain, utilities should drop as well. That’s why 42% of Americans are planning to downsize in retirement, according to brokerage TD Ameritrade. It’s easy to get a preview of what’s available in your neighborhood by searching a real estate site such as Zillow or

You might also decide to stay where you are but take out a reverse mortgage. Check out the Reverse Mortgage article for more information.

4. Relocate where living expenses are cheaper. 

Before deciding to move, investigate state taxes on retirement income, sales tax, the cost of a home or rental, and whether or not you like the lifestyle your new area would offer. Make sure you know what you’re getting into, as costs vary considerably. Some states have no income tax, but their property tax can be hefty. Check out some of the best states to retire in to get started. You can also find state income tax rates that run from nothing to almost 13%. And remember to calculate the cost of moving into the equation.

5. Get a job.

You may have to go back to work in spite of taking other measures to help bolster your budget. Be sure to keep an open mind about what you want to do and for how long. You may find work totally unrelated to your career that keeps you happy and brings in some extra income. Perhaps you’ll enjoy selling tools at a home improvement store, teaching classes at a quilt shop or working in an office environment. It can be refreshing to have coworkers, help customers get what they need and feel a sense of importance and responsibility.

On the other hand, you may choose to start your own business, such as selling on eBay or turning your craft habit into an Etsy store.

You may decide to make one, none or all of the changes above to put more money in your pocket for retirement. Talk it over with a trusted professional if you need a second opinion about which direction to take, because it can be difficult to make some of these decisions on your own. Remember, you can try out giving up a car by taking public transportation for a month before you sell the old Toyota, or spend some time camping or at an Airbnb in a new state before you commit to moving. Who knows? You may end up liking your new life better than the old one as you make new friends and develop skills you never knew you had.

Click below for the other articles in the October 2019 Senior Spirit


Blog posting provided by Society of Certified Senior Advisors

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