Dump Unnecessary Living Expenses for a Better Retirement
By Shane Flait ©2010

Creating a retirement that’s enjoyable or satisfying involves assuring yourself a retirement income that can ‘pay your way’. And that means pay your living expenses.  Of course the less are these expenses, the less retirement income you need.

This article shows you the benefits of reducing your living expenses now and at retirement. And then it categorizes the ways to reduce your expenses so you can get started.

If you’re still a few years from retirement, you can enhance your yearly savings for it by reducing your expenses now. Those annual savings will grow now and then earn income for you during retirement.

If you’re planning for your retirement now, realize that lowering your retirement living expenses directly lowers your retirement income need. So for every $10 you lower your weekly expenses means at least $10 less retirement income you need – more if you must pay tax on that retirement income.

Needing $20 less per week means at least $1,000 less yearly retirement income needed. And needing $200 less per week means at least $10,000 less yearly retirement income needed.

You can see the benefits of lowering your expenses, but just how much can you lower your living expenses – and still enjoy your life? That depends. But a man is richer to the extent he needs less to be happy. Reducing your retirement living expenses can do wonders to bolstering the adequacy of a meagre income.

But you can enjoy much of what you like to do at reduced expense. You simply need to measure what it is you really enjoy, and then rearrange how you enjoy it. That means finding a cheaper way to do it. Let’s see how.

Reduce those unnecessary living expenses:

You can reduce your living expense in three ways:

1. Finding a cheaper alternative to supplying the same benefit
2. Eliminating a clearly unnecessary expense – like debt and smoking
3. Moving to where the cost of living is lower – moving away from cities or going offshore

Finding a cheaper alternative is probably the easiest way to ‘have your cake and eat it too’.

You simply have to find the cheaper alternatives. If you’re buying the expensive brands – i.e. the ones that are advertized – switch to the cheaper alternative. This means drink less expensive beer, use generic drugs, and buy the ‘store’ brand.

If you’re just interested in transporting yourself, you don’t have to be driving a brand new car, paying high car insurance and, perhaps, making large car payments. Choose a 3 year old car instead - and save a bundle.

Paying high club dues to exercise? Exercise on your own for nothing – or next to nothing.

 Eliminating unnecessary expense altogether depends on what’s ‘unnecessary’ to you.

You don’t have to give up everything – just what really isn’t all that necessary. Stick to your fine brandy if it’s what you like.

Two things that really aren’t necessary – and can save you a bundle are smoking and debt. Smoking is a wholly contrived need you have – it’s an addiction. You think you can’t live without it. But you’re wrong there. If you stop smoking, you’ll make the rest of your life healthier and happier. I’ve seen too many people wheezing away and carrying oxygen bottles in old age.

 If you do stop, the physical craving will stop – perhaps in a week or two. You’ll have to mentally reset your psychological or social smoking needs like lighting up with a cup of coffee or stoking away on your break with your friends. Concentrate on enjoying just the flavour of your coffee since your taste buds will re-emerge anew. And take a deep breath of fresh air and relax with it rather than a lungful of tar to let the nicotine do its work.

Maintaining consumer debt means you’re living beyond your means. It’s crazy to pay out good money on interest payments. That really adds up. Wait until you can buy something for cash (or pay the credit card off completely at the end of the month) before you buy something.

Moving to where the cost of living is much lower can make a small retirement income go far

This may be the hardest approach, but can reduce your expenses the most. If you move far from your friends and social life, you’ll have to think through how you’ll handle it.

Perhaps you’re looking for a change or just want to try a different lifestyle – and meet new friends. You can always make trips back to meet old friends. Computer communication lets you see and talk with your old friends and relatives every day.

You can move to a cheaper part of the country and buy that small home and enjoy. Or if you’re interested in saving a lot more, you can go offshore to where you can really live cheap with many of the amenities you’re used to. 

Yes, there are places offshore you can live quite well for about $25 per day. Panama, Ecuador and a couple other places come to mind.

Start thinking how you can reduce your living expenses either to save more for retirement or go a lot further on less retirement income.

 Shane Flait is a writer and educator. Get more info at www.EasyRetirementKnowHow.com