7 Tips for Retiring on a Shoestring Budget

With stock market fluctuations and rising prices, you may be retiring with less income than planned. Covering day-to-day expenses can seem tough on a small budget, especially if you are receiving less than you did during your working years.

Learning how to live cheaply in retirement is possible, however, and could help your savings last longer. Try these frugal living tips when managing a small budget during retirement:

Take a careful look at what you buy each month. “Divide your expenses between fixed and reducible so you can pivot, make changes or plan for upcoming costs,” says Chantel Bonneau, a San Diego-based financial advisor for Northwestern Mutual.

Fixed expenses are set costs that don’t frequently change, like a mortgage payment or utility bill. Reducible items might be a cable package you no longer need, subscription services you don’t use or clothing purchases that could wait until a later date. “Know what it takes to live your life so that you’re clear what you have to work with,” Bonneau says.

When living cheaply in retirement, it can be helpful to have funds set aside for unexpected expenses. If you don’t have an emergency savings account, look for ways to establish one. You’ll be able to tap into it if an unexpected repair comes up. Keeping extra funds on hand can help you avoid going into debt in retirement.

Frequent grocery trips for a few items often leads to a higher food bill. Instead, consider spending one morning thinking about what you want to eat during the coming week. After making a list, look for sales and discounts on those items to help you stay within your grocery budget.

If you’re currently in an area with a high cost of living, it may be wise to think about places in the country where it’s easier to live on less. A move from an urban district to the suburbs could reduce costs. Downsizing is another option. If you want to save on taxes, you could look for a place in a state with lower taxes.

To go a step further, you might consider a college town in one of the lower tax states.

“In these towns, you will usually have good health care options, particularly if there’s a medical school at the university,” says Michael Gerstman, CEO of the Dallas-based retirement planning firm Gerstman Financial Group. “Additionally, there are loads of low-cost dining out options and no- or low-cost entertainment options.”

You might be able to attend concerts, plays or festivals for free. Many university cities also offer bike trails, walking paths and low-cost gym options.

Besides buying secondhand, you might be able to sell what you don’t use. Take note of what you see while shopping at thrift stores and browsing online for previously owned housewares. You might realize you have extra items in a closet or garage that are still in good condition to list for sale.

With the flexibility of a freed-up schedule, you might be able to take advantage of seasonal deals. Look into house exchanges and house-sitting opportunities as well as other low-cost ways to see the world.

“My husband and I have been able to travel inexpensively around the world by house-sitting,” says Silvana Clark, an adventure seeker in Bellingham, Washington.

You generally need to pay for your airfare to get to the place you’ll be watching, but the lodging is typically provided at no cost in exchange for caring for the household, which might include pets. “We have had ‘free’ stays in Japan, Australia, England, Germany, France and many other places,” Clark says.

In addition, learning about other areas of the world may be as easy as heading to the local library for travel-related books or presentations. Cultural activities in your region, including art festivals and museum exhibits, might be engaging as well.

Caring for your household can help everything last longer. Instead of purchasing a new vehicle, schedule regular maintenance for your current car. Try using coverings for patio furniture to help it stay in solid condition, season after season.

The same is true for your health. Focusing on daily exercise, healthy meals and solid sleep can help prevent higher doctor bills in the future.