When it comes to preparing for retirement, most people think of downsizing their home, particularly if they are empty nesters. But that’s not the only way retirees can downsize. From entertainment to utilities, there are numerous ways to cut back on costs without moving to a smaller home. (Read more here: Don’t Let These Overlooked Costs Ruin Your Retirement.)
One of the biggest recurring costs for many retirees is the mortgage or rent. But it’s not the only one. There’s also maintaining, heating and cooling the home, all of which can eat away a fixed monthly income.
If you want to downsize the costs associated with running your home instead of moving into a smaller place, start with lowering your outlays for maintenance. Healthy retirees might consider doing the landscaping and house cleaning themselves, for example. If these seem too arduous, enlist family to help instead of shelling out money each month to make sure your lawn is cut and your house is clean. Consider this: According to home improvement website Angie’s List, the average lawn service costs anywhere from $35 to $50 per visit. A visit from a maid can average $151, although it depends on the size of the house, according to HomeAdvisor, the home improvement matching service.
As for lowering heating and cooling costs, if you’re not using all the rooms in your house, consider installing programmable thermostats and turn on the heat or air-conditioning only in the rooms you inhabit. Keeping the thermostat between 10 and 15 degrees lower for eight hours can save 5% to 15% on the yearly heating bill, according to the U.S. Department of Energy. In addition, make sure lights are shut off, appliances are unplugged and gaps around windows and doors are sealed to reduce your energy bills. (To learn more, see Ways To Slash Your Home Energy Bill.)
Sure, it would be nice to dine out every other night, hit the golf course five times a week and take long trips to visit the grandchildren or travel the world. But unless you have a lot of money saved for entertainment during your retirement, it’s going to be hard to sustain an active lifestyle on what is likely a tighter budget.
That doesn’t mean cutting out restaurant meals or traveling altogether, but rather, being smart about how you spend your money. Instead of dining out three days a week, you might cut back to once a week. Instead of golfing daily, going out on the links twice a week could be a more affordable option. Even traveling can be done more cheaply if you take advantage of senior discounts, which range from 5% to 15%, and travel at off-peak times.
Take up inexpensive hobbies, such as fishing or gardening (but stay out of high-priced nurseries!). And check out the free programs for retirees at the local library and/or senior center. (For more ideas, read No COLA Raise? Discounts to Help Seniors Budget.)
One of the perks of exiting the workforce is eliminating the expense of commuting. If you and your spouse have two vehicles, getting rid of one of them is a quick way to make some cash and save on gas and car insurance, especially given that auto insurance could set you back $907.38 a year (in 2014, the most recent national figures we could find). The same goes for the phone. You may not need both a landline and a mobile phone. Choose one means of communication and get rid of the other to wipe out that recurring cost. If family and grandchildren don’t live nearby, use Skype or another free or low-cost Internet video chat program to reduce the expenses associated with long distance phone calls and frequent trips to visit them.
Retirees don’t necessarily have to give up their house in order to downsize. There are many ways to reduce costs that don’t involve selling and moving out. Trimming some of your spending each month can go a long way toward making it possible to live out your retirement in your family home. See also Avoid the Downsides of Downsizing in Retirement.