As you approach retirement, it is important to sit down and work out your retirement budget. Once you leave full-time employment, your income will inevitably go down. If you are not prepared, it can be a difficult transition. Many of us take recurring expenses for granted when we have a steady paycheck. But with more time than income, it is prudent to re-examine these monthly bills.
Cable TV. You might think cable TV is a necessity when you retire because you will have a lot more time to sit around, but I disagree. There are alternatives such as an HDTV antenna, Netflix and online viewing, all of which can save a lot of money when you cut off cable. Premium channels are a lot of fun to watch, but you don't want to spend your retirement watching TV. It's much healthier to get out of the house and be more active.
Books and magazines. I love to read all kinds of books and magazines, and I don't think I can live without them. However, I loathe paying for subscriptions. Luckily, our local library is very well-stocked, and I can request a book online. If money is tight, consider using the library or reading online instead of paying for a subscription. Of course, if money is no issue, it's good to support your favorite magazines so they can keep bringing you quality reading material.
Phone. A landline phone is quickly becoming a duplicative expense. If you are already paying for high-speed Internet, you should consider a VoIP system like the Ooma Telo or the OBi. These devices are hooked up to the Internet and you can make calls from your regular phones. Long-distance calls within the United States are free with these devices, which is great because many families are spread out all over the country. You can also reduce cellphone expenses by switching to a prepaid plan and using your home phone more once the VoIP system is up and running.
Daily cappuccino. About half of Americans buy coffee regularly at work, spending an average of approximately $1,000 per year on coffee, according to a recent Braun Research telephone survey commissioned by Accounting Principals. Sure it's convenient and we need the caffeine to get through the day, but it's probably time to cut down once you retire. It's cheap and easy to brew coffee at home, and you can enjoy the slower pace of life without rushing off to work. You can always take an afternoon siesta when you get tired.
Transportation. A car is one of the most expensive items we spend money on. In retirement, perhaps you can reduce that cost. For local trips, try walking or biking instead of driving. This will save gasoline and improve your health. Perhaps you can get rid of a surplus vehicle altogether. Don't forget to call your insurance company to update your driving habits, and it will probably give you a discount for the mileage reduction.
Recurring expenses have a way of sneaking up on you. It's easy to ignore a $3 cappuccino, but they all add up over a year. The more you can reduce these nonessential recurring expenses, the more you will have to spend on more important things such as health care. Even if you are not retired yet, it's well worth the time to go over your recurring expenses and take steps to reduce them to strengthen your finances.
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