Retirement should be relaxing and stress-free. But, retirees are not immune to rising costs. Once you’ve paid for all your necessary expenses, you might have less money for discretionary expenses than you originally planned for.
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If your retirement budget is tight and you’re on a fixed income, you might want to consider cutting back on your wants so you have more money for your needs, such as housing, groceries, utilities and healthcare. According to U.S. News & World Report, there are many ways to do just that.
Here are six expenses that are a drain on a retiree’s finances:
Debt
Debt is typically one of the biggest contributors to financial trouble, especially when you’re retired.
Credit card debt, mortgages, auto loans, the cost of a second home, and other debts all chip away at your monthly budget.
The sooner you can eliminate your debts, the sooner you can spend on what you enjoy most, whether traveling, dining or your favorite hobbies.
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Housing
Whether you own your home or rent, housing costs are likely one of the largest items in your budget. Once you’ve paid off your mortgage, you may have money left over to budget for other spending categories.
However, don’t forget to account for the cost of property taxes, insurance, ongoing maintenance (especially if you live in an older home) and utilities. If you still rent, you’ll have to budget for a monthly housing payment indefinitely.
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Entertainment
Dining out, going to the movies, happy hour with friends and other leisure activities are great. But, if they’re eating up too much of your monthly budget, you might have to cut back.
Consider going out to eat just once or twice a month and going to the movies only on discount days. Small changes to your entertainment spending can give you more financial breathing room.
Travel
Travel can be enriching, both personally and spiritually. But, experiencing new cultures and destinations can also be very expensive.
Consider traveling in moderation if you’re a retiree on a fixed income. If travel is important to you, you can cut back on other spending categories so you have more discretionary income to get out and see the world.
Inflation
The effects of inflation are unavoidable, whether you’re retired or not. The cost of just about everything is up. In the post-pandemic world, we’ve experienced record-setting inflation which is particularly detrimental to retirees on a fixed income.
If you find yourself with a tighter budget than usual, consider taking on a side hustle or part-time job to help make ends meet.
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Supporting Family Members
Providing financial support to family members in retirement could jeopardize your financial security. Whether it’s taking on the cost of housing, education, or long-term care for your family members, it’s important to discuss the terms and limits of your finances in advance.
Perhaps you provide a limited amount of financial support, such as giving a small amount of money to each of your adult children toward the purchase of their first homes.
This way, you can still help your family while maintaining financial security throughout your golden years.
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This article originally appeared on GOBankingRates.com: 6 Ways Middle Class Retirees Are Bleeding Money Every Month
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