How to Have Fun on a Budget in Your Senior Years
Sixty percent of Americans don’t keep a budget, choosing instead to throw caution to the wind. Many people fly by the seat of their pants because they know life will work itself out. For Baby Boomers, there isn’t much time to rebound from financial frivolity. As you draw closer to retirement, frugality becomes very important. One day, the income stream might dry up and you could be surviving on savings and investments. You’ll come out fine if you live today with your future financial health in mind.
However, none of this means that you must lead a humdrum life in order to remain in constant savings mode. You can enjoy a fulfilling life without depleting your savings, and much of this depends on whether your cost of living is compatible with your income. The recommended budgetary breakdown for spending your money is 50 percent for necessities, 30 percent for wants, and 20 percent for savings and debts. By following this principle, it’s not difficult to stick to a budget while still having fun.
Let’s get this one out of the way first. Paying back credit card debt and loans falls under the savings bracket, but saving for the future is a big part of it too. Retirement funds and emergency funds might not be part of your necessary spending now, but they will come in handy when you need them in the future.
One such expense to consider is long-term care. Long-term care is inevitable for some seniors, and it’s best to be prepared so that you’re not depleting your cash flow when the time comes. Although it’s a cost that you’d have to fork up now, long-term care insurance can protect you in the future when you’re in need of care at home, an assisted living facility, or a nursing home. Start now to save for later, but before you purchase a policy, head to Consumers Advocate or a similar information site to research the leading long-term care insurance companies.
Needs are the things that help us survive and function within society. They include fixed expenses like housing costs and insurance premiums, as well as variable expenses like groceries, transportation, and healthcare co-pays.
There are some necessities that you can possibly cut down on. If you’re lucky enough to telecommute for work, consider moving to a cheaper neighborhood. Without an office to go to, you can live just about anywhere with an internet connection. An even better move would be to a town with good public transportation and a high walk score to reduce your transportation costs. There’s also the option of selling your car and purchasing a used car with lower insurance rates. In addition to cutting costs for transportation, there are many other cost-saving strategies, such as using senior discounts or enrolling in the right Medicare program for your needs.
But what about the fun stuff — vacations, entertainment, and going out? With the average American household spending over $60,000 annually, only about 5 percent of it is spent on entertainment. It’s not a lot of money when you look at the big picture, so don’t feel guilty about your discretionary expenses. If you need new clothes, then buy yourself something nice. If you want to watch a film, then treat yourself to a movie night. Here are some ways to enjoy life while staying on a budget:
- Rent a movie from Redbox, subscribe to Netflix, or go to matinees.
- Shop at thrift stores or bargain retailers like Ross and Marshalls
- Take advantage of free days at the museum and parks with free entry
- Go on outdoor adventures that don’t cost a thing
- Dine out on a discount: Groupon, Taco Tuesdays, Happy Hour, etc.
The best years of your life have yet to come, but the worst-case scenarios can happen if you don’t prepare. Go into your retirement years with financial security and a plan to take care of your needs when aging diminishes your independence, but don’t sacrifice your happiness along the way. Live it up and seize the day — without having to pay.
Courtesy of Jim McKinley
Photo Credit: Pixabay