Everyone dreams of the days where they no longer need to work, and they’re free to do whatever they please. After all, after saving up for your whole working life, freedom is well-deserved! However, what people don’t realize is how difficult it can be to make the savings last and spend them in the right way.
If you have reached retirement age and you’re worried about overspending your savings, then read on to see how to make them last.
Seek Financial Advice
One of the best choices you can make earlier on is to talk to a financial advisor. While you may feel like you have your finances under control, they are there to iron out the details and show you how much you have to spend. You might think it’s counter-productive to spend money to save money, but it does help in the long run.
Get the Right Insurance
When you have retired, it’s time to start thinking about life insurance, particularly insurance for final expenses. While hopefully, you’ll be around for many, many years, it’s always better to prepare for the worst. This way, if you do pass on, your family won’t have the financial burden of your funeral and burial on top of their grief.
To make sure you don’t splurge all your savings on insurance, take your time when looking around at different offers and choose one that suits both you and your family’s needs.
Skip the Extra Vacation
Your retirement should be spent relaxing and having fun, and while you should absolutely make the most of your travel, you should also limit yourself. If you’ve saved enough to pay for one vacation a year, for example, don’t be tempted to take two one year. This will only eat more into your savings, and you’ll have to skip a getaway completely another year.
Give Yourself a Monthly Budget
Just as you would have given yourself a monthly budget while working, do the same when you are living off your life savings. The number might seem high in the first few years, but it will need to last you ten, twenty, thirty, and potentially even forty years, so don’t go overboard with your monthly spending.
It’s better to live frugally and have money on the side than live more luxuriously and then find your savings have dwindled.
Earn on the Side
While your career might be behind you, that doesn’t mean you can’t earn extra cash on the side, especially if you find yourself bored during your days of retirement. You don’t have to hop back into a nine ’til five job for extra income – a small side hustle will do the trick!
Make your side income something you enjoy by turning a hobby into a business. If you love writing short stories, for example, then you could look into self-publishing or even work on finding an agent. If you have a love of candles and have been making your own for years, there are many people out there who would be willing to pay for home-made, great-smelling candles.
Whatever you decide to do, make sure it’s something you genuinely love, so your retirement years don’t feel like an extension of work.
Be Strict with Family Hand-Outs
If your family knows that you have a lot of cash saved up, they might be tempted to come knocking when they are struggling. While you will want to help them out whenever you can, you shouldn’t let anyone take advantage of you, no matter how innocent their intentions are.
Remember, this money is to last you many years. If you’re finding that a large sum of money is going towards people asking you for small loans, then nip that in the bud sooner rather than later. Be honest – tell them that you simply cannot afford to hand out money and keep enough for yourself at the same time.
While you shouldn’t throw your money into a chance without thought, if you play it right, investing is an easy way of growing your money over the years. This will help account for inflation, and you will barely have to lift a finger!
Look After Your Health
Medical bills are expensive, so avoid them as much as you can by looking after your body. This means exercising regularly, eating a healthy diet, and keeping your life stress-free.
By keeping your body in good shape, you lower the chances of certain illnesses and disorders, meaning you won’t have to go to the doctor as often.
Move Somewhere Smaller
If you’re still living in a huge house with only one or two of you, then it might be time to move on. Not only will you turn a profit by selling your larger place, but you will also reduce the electricity bills and the amount of cleaning you have to do!
Selling your home can be stressful and even painful if it holds lots of memories, so consider your decision before jumping in.
Be Conservative in the Early Years
If you’ve just started your retirement, then be as frugal as possible early on to account for inflation. This way, when you need more money later, you will have more to spare.
Living frugally doesn’t have to be painful – there are many ways to do it while still enjoying the life you love. By making small changes, such as shutting the lights off more often and shopping for second-hand clothes, you’ll make a big difference to your monthly budget.
Rent Out a Room
An easy way of earning money on the side is to rent out a spare room. Many people are on the lookout for cheap accommodation, so if you have space, why not invite someone trustworthy to pay you rent and live in your home? If you’re lucky, you might even make a friend out of it!
You don’t have to compromise having fun in your retirement to make your savings last. By finding ways to earn on the side, living more frugally, and knowing where to spend your money, you can ensure that you have enough to last you until the very end.