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If you’re thinking about retiring soon, you might need to cut back your expenses.
If you’re wondering where to start, three retirees give their best advice for anyone wanting to cut their spending.
1. Downsize big expenses like housing and transportation
While it might not be the simplest thing to cut, cutting your costs on your largest expenses will help the most. Early retiree Jim White found that cutting back on his biggest three expenses — housing, transportation, and food — was something he wishes he did while saving. Now in retirement, he’s aiming to cut back on these things to make his money stretch further.
Instead of buying a large house, he says he’ll aim to find a home that’s smaller and more affordable when he and his family move back to the US from Panama. But, some of the things he did to cut costs will be simpler.
He doesn’t plan to buy another new car when they move back to the US, and will opt for a used car he can buy affordably. When they still lived in the US, White found that he could cut his expenses by switching where he grocery shopped to a discount chain store, saving them about half on their grocery bill and leaving more to save.
2. Dine out less frequently
Retiree Nicole Carter found that one of the biggest areas she needed to cut back was dining out. Living in New York City, she found herself constantly going out to eat while saving for retirement.
“When I actually took a look at my finances and realized that I had spent $2,100 on eating out, I had to give myself a check-in,” she said.
From there, she learned to start curbing her eating-out habit, and started to pay closer attention to where her money went each month. She started budgeting and giving herself “spending audits” to know where her money was going each month, and save more.
3. Cut back on impulse purchases
Retirement shouldn’t be a time of trying to keep up with the Joneses and have the latest and greatest — it should be a bit more modest.
Retiree James R., who doesn’t use his last name online, says this has been the case for him. “American culture is frenetic, and it’s consumer-oriented. Think twice about whether or not you really want to be that person. If you can deviate from it, it makes life in retirement a whole lot easier.”
In his experience, buying less and living simply has made his retirement far more comfortable. “Be frugal, don’t buy much on impulse, and don’t fill your house with junk,” he told Insider.