The recent recession has made a huge dent in the savings of most Americans, leaving many people near retirement in a state of panic. Any upheaval in the economy can cause the best laid investment plans to take a nose dive, but it is the retirees and the people who have a few years left to retire who are the most affected.
One cannot emphasize enough the importance of savings in a volatile economy. For a comfortable life post-retirement, you should manage your money effectively on a day-to-day basis. Even a little cost-cutting goes a long way in providing you with a good standard of living after you retire. Here are a few ideas on how you can cut costs.
Cost cutting before retirement
Even before you retire, you can lead a frugal lifestyle to cut recurring costs and increase your retirement nest egg.
1.Housing costs form a major share of your annual expenditure. Maintenance, repairs and cleaning can be expensive affairs especially if you have a large yard or a swimming pool in your home. Consider moving to a smaller home in a less expensive locality if you can make do with less space once the kids have moved out.
2.When you prepare your weekly budget, ensure that you do not spend money on frivolous or unwanted items and stick to this budget religiously. Use prepaid cards on shopping trips so that you are limited to your budget.
3.Consolidate your loans at a lower interest rate, so that you have to worry about just one low monthly payment. Refinancing your existing loans to low interest ones can also free up a significant sum in monthly repayments, which can go towards your retirement fund.
Cost cutting post retirement
1.The first cost cutting measure you can undertake post retirement is to use your car less often to save on fuel bills. For example, if you have already moved to a quieter neighborhood before retiring, you can keep yourself fit and save transport money by walking down for essentials.
2.Pay attention to the nitty gritties of Medicare, retirement plans and social security to get the most out of these schemes. Read the fine print carefully to avoid paying unnecessary charges.
3.Look for discounts and offers on groceries and commodities. Collect savings coupons to use them in your local store. Your usual weekend shopping ritual can also be moved to the middle of the week to cut down on your shopping bills by taking advantage of empty check out counters.