Retiring can be an exhilarating time. You go from having a schedule to not having one.
Instead of waking up and going to work, you wake up and can do whatever you want. Including go back to sleep!
But when you stop working, you can no longer rely on a paycheck to fund your lifestyle. Instead, you have to rely on your nest egg. You have to learn to live on a fixed income.
What was OK when you had cash flow from your job will likely be a burden in a fixed income life.
Here are some of the expenses retirees must get rid of if you wish to remain happy in retirement.
Read More:
- Check out these 10 retirement mistakes that could wreck your golden years
- Here are 10 factors that decide if you can successfully retire
- Also, here's some help deciding on if you should delay Social Security.
Owning Too Much Home
“Too much” is relative but you know if this describes you because the house will feel less like a luxury and more like a burden. Larger homes require more maintenance and upkeep. They cost more to heat in the winter and cool in the summer. They are often surrounded by landscaping that needs to be maintain and a yard that must be mowed. These all require time and money to keep presentable.
If you're retired, you need to consider downsizing to a home that fits your lifestyle. If you wish to travel the world, it seems silly to maintain a large home that you won't be using. If you feel like you have too much home, it's important to downsize as soon as you can so you don't tie up your fixed income in maintaining something that doesn't bring you happiness.
“Keeping Up With the Joneses”
This is a catch-all category for those things you do because you saw your friends do it. This could be expensive travel or dining out at a fancy restaurant or buying something like a new TV or massive home renovations. This is something that plagues everyone, retirees and non-retirees alike.
It's also known as the mimetic theory of desire. We don't know what we want or like so we often look to others for ideas and clues. It's easy to buy a bigger car or a bigger TV because our friends have done it.
Owning Too Much Car
It's difficult to survive in many parts of the United States without a big car. We drive a Toyota Sienna and a Toyota Highlander, a minivan and an SUV, because we need to shuttle around our four kids. When I retire, I plan on downsizing our cars as well so we don't have to maintain such large vehicles.
Larger cars often need more gasoline, are more expensive to insure, and requirement more expensive maintenance. Downsizing makes sense especially if your reasons for owning them have graduated and moved out of the house.
I may keep the Toyota Sienna though, I love that car!
Overspending on Travel
If you've been waiting for retirement because you want to travel the world, you're not alone. Travel is one of the most often cited treat of many retirees but it's also an area where you can overspend very easily. You may be prudent when booking flights and hotels but you have to stay on budget when you're moving about too.
When you're away from home, it's so easy to overspending on meals, on beverages, on side trips, and more. We often become very generous and spendy when in “vacation mode,” which can wreak havoc on our finances when we return. Indulging can be very freeing as long as you ensure you stay within budget.
Also, you don't have to go on a big trip every single year. You can go on mini-vacations rather than multi-week blow outs. A long weekend several times a year can replace the thrill of one large trip… and be done at a fraction of the cost.
Dining Out Too Often
I get it, it's fun to be wined and dined at a restaurant. It's also fun to meet up with friends at a restaurant, rather than at their home where someone will have to prepare a meal. But doing this too often can put a significant dent in your budget not to mention the health effects of eating out too often.
Restaurant meals are often larger and richer, which increases the number of calories you consume. This can lead to weight gain. It's often cooked with more butter and sodium, both of which can have a negative effect on your body if done too often.
