13 Things Frugal People Always Do When They First Retire
People often think that frugal people are always saving money to splurge after their retirement. But those who are money-wise don’t believe in overspending even post-retirement.
In fact, now that they are on a fixed income, they tend to plan more meticulously. Here’s how a frugal person would act after their retirement:
1. Reevaluate Their Budget
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Frugal people always try to stay ahead of their budget. Incomes go severely down post-retirement and people will primarily depend on their pensions to get by.
Those who are frugal will take this change into account beforehand and reevaluate everything first thing after retirement. They will try to locate where they are and will be financially in the future and plan their expenses accordingly.
2. Optimize Healthcare Expenses
Healthcare costs go up with age. This can make it difficult to cover everything when on a fixed retirement income. Frugal people try to optimize their healthcare plans by researching well and choosing the most cost-effective insurance available. They also make ample use of Health Savings Accounts (HSAs) if available.
3. Downsize Their Living Space
Retired folks rarely have children living at home. The frugal ones among them will take this chance to downsize their family home immediately from four to five-bedroom places to two to three-bedroom ones. This will not only bring down maintenance costs but also help them build a nest egg they can dip into in case of emergencies.
4. Develop a Withdrawal Strategy
Money-wise people don’t make random withdrawals, especially after they retire. Instead, they develop a withdrawal strategy based on their updated income. They budget well and set an amount aside for basic necessities plus leisure and emergencies.
5. Pursue Cost-Effective Leisure Activities
Frugal people often pursue cost-effective leisure activities. This means that even when they choose to play, they ensure they get their money’s worth. So, they’ll often choose beach outings and lively get-togethers at home to fancy restaurant visits and expensive amusement parks.
6. Maintain a Long-Term Perspective
Frugal people maintain a long-term perspective whenever they are making decisions, especially monetary ones. They try to prioritize what is needed immediately over what can wait. If this means putting off a family vacation or two to renovate their bathrooms, so be it.
7. Build and Maintain a Social Network
After retiring, people are often surprised by just how much free time they suddenly seem to have. Frugal people will often use this time to build and grow their social network. This not only helps them maintain a healthy social life but also builds a community that can come to their aid when needed.
8. Test-Drive the Budget
As we mentioned before, a money-wise person will always set a budget for everything. While these budgets may have some leeway, they set the expectations of the budgeter. After retirement, one is on a fixed income that’s often much lower than their pre-retirement salary. So, they will want to tweak their budgets to make up for the lost income. They will also always plan ahead of time and ensure that they test their budgets before deciding anything.
9. Sell Unnecessary Items
A lot of one’s stuff turns unnecessary when one retires. Work desks and computer chairs, for example, become redundant. A lot of suits and shirts become useless too. If you and your partner both used individual cars, you can get rid of one and put the money toward a nest egg instead of pouring money into unnecessary upkeep. Basically, frugal folks will get rid of unnecessary clutter while ushering in cash instead.
10. Scope Out Side Hustles
No matter how well one may plan their retirement budget, things may still go suddenly south, especially with the continued inflation. So, while retirement may feel like one never has to work another day in one’s life, reality is, in an emergency situation one may have to resort to taking up some side or part-time gigs.
Fortunately, technology has ensured that no matter what sector you worked in, you can earn some quick bucks from the comfort of your home. Frugal people are well aware of this and often try to plan ahead and scope out gigs that suit their expertise and desires.
11. Keep Cooking
A major portion of one’s expenses in the U.S. often goes into groceries. And the amount one needs to buy the same groceries is ever-rising. On a fixed retirement income, it only makes sense to budget one’s food expenses well. Frugal people will try to keep their food expenditures low by rarely eating out. This does not mean they will stop going out entirely. Instead, they prefer homecooked meals over regular takeout.
12. Look for Senior Discounts
Frugal folks already love discounts. Once they retire, they are more than happy to ask for extra senior discounts everywhere they go. They are very aware that a lot of places and events have such discounts even if it isn’t usually advertised and they are not afraid to bring it up.
13. Have an Emergency Fund
Frugalists would have been saving all their lives, especially pre-retirement. Does that mean they stop saving post it? No, sir. Instead, they ensure that at least a percentage of their new fixed income goes into savings and various funds. After all, there is no such thing as too big an emergency fund, especially for the common folk.
