All of your life, you’ve imagined retirement as a quiet and peaceful period in which you can enjoy the result of your hard-working years. Ideally, retirement is the time to read, relax, look after your grandchildren and garden, without minding your budget. In the end, that’s why you’ve contributed for so many years to your pension.
But we don’t live in an ideal world, and therefore, retirement often catches people off guard. You might not be able to afford as much as you did before and this requires careful budget analysis and planning and one of the areas where you might be able to make some savings is your house. Read on and find out how to maintain your housing expenses under control once you retire.
Do I Really Have to Cut My Housing Expenses?
The answer is it depends. If you are a millionaire, you probably don’t worry about your electricity bill, but if you’ve started reading this post, you’re most likely someone who needs help in managing their finances after retirement and someone who’s trying to reduce their monthly expenses.
The good news is you are not alone. Almost all people are faced with this problem once they retire. That’s why it comes as no surprise that the average retired couple spends 25% less on their household than the average working couple.
What Should I Start With?
You should start by analyzing your monthly budget. Make a list of all your necessary expenses, with a separate category for housing, food, medicine, and gas. Then, start analyzing what the areas where you could possibly cut costs are.
You will surely need to buy food and gas, so you might not be able to save money here, but you could have a more economical approach toward your household expenses so that you pay less for your bills.
Also, take into account that each month you might have unforeseen expenses. This month, your car might need fixing, next month, you might want to buy one of those easy to use cordless phones or a new cupboard and so on. So, you should always put some money aside for this type of investment.
How to Cut My Housing Costs?
There are plenty of ways in which you can try to cut your household costs. First and foremost, try to reduce your gas, water and electricity bills. When you were trapped in the 9 to 5 race, struggling each day to take some time for yourself after work, you probably didn’t even bother to close the door or window to preserve the comfortable temperature in your living room.
Similarly, you probably didn’t pay a lot of attention to how many lights were on at the same time, even in rooms no one was in. Now, you have time to consider these aspects and reduce correlated costs.
Don’t waste money on energy by leaving the lights or heat on in rooms you don’t actually use. Also, you can cut costs by using household appliances only when necessary, turning off the TV when no one’s watching, etc.
Considering a House Change
If you live in a big house and your kids have long left the nest, you might not need all that space only for you and your spouse. Selling your family house might not be the type of retirement you’ve planned on living, but think about the money you could save by living in a smaller house.
Also, you would need to invest less time with cleaning, repairing and so on. Although it’s not a romantic idea, moving to a smaller accommodation might be the right thing to do. Alternatively, you could rent a part of your house to tenants which would guarantee you a passive income every month.
There are different ways of cutting your household expenses once you retire and no matter what option you choose, it all starts with a careful and realistic assessment of your current budget.