While retirement often means living on a reduced income, financial experts say there are many ways to stretch the budget and help get the most out of available funds. One of the most important tools is to have a budget and review it regularly.
Start by identifying essential expenses, such as rent or mortgage payments, other housing expenses, basic groceries and utilities. These are typically fixed costs which must be paid each month, and they quite rightly take precedence over other discretionary items. After deducting these essential expenses from the available retirement income, account for any discretionary spending like entertainment and travel to get a sense of the monthly budget. To help the discretionary budget go further, look for opportunities to save on those costs.
"Being retired typically means having more flexibility, which makes it easier to take advantage of savings during off-peak periods, such as mid-week use of popular attractions, or travelling in the middle of the day," says Raymond Chun, senior vice president at TD Canada Trust. "Planning these activities in advance can save money, while allowing you to budget for costs in advance."
Other ways to stretch the budget further include taking a look at tasks that used to be outsourced, like gardening or cleaning, for example. With the additional time we get in retirement, the cost of continuing these services may no longer outweigh the time required to accomplish them on our own. Also, look at how your lifestyle change impacts the use of regularly subscribed services, like telecom, or public transit.
"Ask yourself," Chun suggests, "do I really need all that mobile data if I'm going to be spending more time at home where I can use WiFi instead?"
