A basic rule of budgeting is to spend less than you make, but this can be challenging for seniors who are on a fixed income. You may have to be more cautious about spending these days, but you also want to enjoy retirement. There is a way to find balance – it just takes careful budgeting and smart solutions that cut major spending categories.

Healthcare

Healthcare costs make up a significant portion of many senior budgets. One issue is that healthcare is complex, so many seniors simply accept these expenses as non-negotiable. However, there are many ways you can cut healthcare costs, including choosing a different insurance plan.

While traditional Medicare may be more affordable month to month, there are gaps in coverage that can leave you with out-of-pocket costs. This is why some seniors are actually better off choosing a Medicare Advantage plan that includes more expansive coverage, like prescription medications, along with vision and hearing benefits. It’s a smart way to take better care of your body as well as your finances.

Auto Insurance

Auto insurance is another expense you have to have (as long as you drive a car), but that doesn’t mean it has to be a fixed expense. If you haven’t reviewed your auto insurance recently, the Insurance Information Institute recommends taking a peek.  

By examining your policy, you might discover countless ways to save. Bundling policies, protecting your car with an anti-theft device, driving infrequently, and having a safe driving record are just a few examples of how you can qualify for a lower rate. The best way to ensure you’re getting the best possible rate is to compare prices, and even ask for quotes from a few different insurers.

Housing

You have to live somewhere, so housing is clearly an expense that’s hanging around. According to USA Today, retirees who pay off their mortgage may spend less overall, but you still have taxes, insurance, maintenance and utility costs. However, one of the easiest and most effective ways to cut these costs is to adopt more energy-efficient habits at home, greatly reducing what you pay for utilities.

Food

Yes, food is a necessity, but with the right shopping strategies, grocery spending is a category that’s easy to slash. There are plenty of ways to spend less on groceries without missing out on the things you love. These can be small savings, like bringing your own bag to get a discount or learning how to use coupons to their max. 

Fun

When you save money on all these necessary expenses, you’re left with more money that can go towards extras. But don’t worry – there is just as much savings potential when it comes to the cost of fun stuff, and this includes everything from restaurants and shopping to travel expenses. 

You can always look for coupons, but the best way to save is by taking advantage of senior discounts. A quick web search will turn up lists of senior discounts at chain retailers, but the best approach is to always ask. And if you’re a member, AARP offers many discounts you can access, too. 

As much as it helps to cut big bills like health care, don’t underestimate how saving on these smaller, everyday expenses adds up. Your income may be fixed, but remember that most expenses aren’t. Cutting where you can is the best way to stay under budget and leave more left over for the fun stuff.

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