If you have seen my previous posts you may have noticed that I always advise people to live on their anticipated retirement income for at least one year before actually retiring. It is the best way I know to make sure that you will be able to support the lifestyle you want. Well, that is exactly what we have been doing for the past year-- trying but failing to live within our expected retirement income. Despite all my careful planning, I always fell $600-$700 behind each month. So since January of this year I really made an effort to figure out ways to trim some "fat" from our budget. My strategy worked. I was able to reduce our expenses by $660/mo (almost $8,000/yr). Now we are able to live within our projected retirement income. At almost 67 years of age, husband isn't ready to retire yet. But if we can continue to live this way and maybe figure out a few more economies, we should be in good shape financially when he does retire.
So what did I do to trim expenses?
1. I quit smoking - save $150/mo -- Yeah, I know that's a no-brainer. But, hey, after smoking for 45 years it was HARD! But I'm more than a year quit now and have the money to prove it. Hooray!
2. Dumped cable TV - save $130/mo -- We had cable for 2 years and I couldn't understand how you could have a choice of 180 channels and still not find one show you wanted to watch. The last time our cable company raised our rate was literally the last time they raised our rate. We dropped cable TV and switched to rabbit ears. We now use Netflix and Amazon streaming. However, they don't add to our budget because we had both of those already.
3. I shopped around for car insurance - save $130/mo -- We were with one insurance company for home and cars for 30 years. Their rates went up and up and we got no discount for being long-term customers. So I finally got serious about shopping around for insurance. I looked into companies that were not necessarily the "big names" but had long track records and good customer reviews. In the end I cut our insurance bill in half AND got better coverage. Why did I stay loyal to that other company for so long?!
4. Food & Sundries - save $150/mo or ~10% of the total-- I have known for years that grocery stores charge an arm and a leg for non-grocery items that I call sundries. That's basically all non-food items like paper towels, hand soap, brooms, cat litter, toilet paper, etc. But I got lazy and fell into buying those things in the grocery store because it was so convenient. No more. Now I ONLY buy human food in a grocery store and even then I make a special effort to stock up on sale items. I also shop on Wednesdays because it's "Senior 5% discount day" at our grocery store. All sundries can be purchased much more cheaply at Target or Walmart. And our local Walgreen's has "Senior 20% off everything day" on the first Tuesday of the month. That's when I stock up on lots of things from instant coffee (yes, we're old school) to paper plates to laundry powder and hair dye (I'll never tell ).
5. Prescriptions - save $100/mo-- After reading a ton of information, including pages and pages on the Medicare web site, I figured out that my husband should be able to get Medicare Part D (prescription drug coverage) without having Part B (Part A is free). Everybody said that it couldn't be done but I fought through the bureaucracies and got it done. Now he has primary (private) and secondary (Medicare) drug coverage so his cost for drugs went down to almost nothing. I will join him on that when I turn 65 so we'll save a little more money then.
Note that I didn't do all these things at once. I kept casting about for more and better ways to save money. We first switched from insurance company A to insurance company B for one year and saved a lot of money. When renewal time around I shopped around again and found an even better deal so we switched again. It does take more time to go to Target or Walgreen's for sundries than to pick them up with my weekly grocery shopping. So, yes, you have to be prepared to put in some time and tolerate some inconvenience in order to save money. But if you keep working on it and the small savings start to add up, I think you will find that the time and the effort is worth it. Even if you don't NEED to economize during your retirement, that extra $8,000/yr could pay for one heck-of-a-nice vacation, couldn't it?
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