7 Frugal Habits You Need After 65, Finance Experts Say (2024)

When you're over the age of 65, it's more important than ever to make smart money decisions. This may mean managing investments, delaying social security benefits for a bigger payout, or continuing to earn some form of income into your senior years. In fact, financial experts say that a handful of lifestyle changes will help you stretch your budget, increase your financial freedom, and reach whatever goals you might have for this next chapter of life. Ready to start saving? These are the seven frugal habits to begin now if you're over 65.

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1

Live in a right-sized home.

7 Frugal Habits You Need After 65, Finance Experts Say (1)

As you enter your senior years, it's important to lay a financial foundation that will set you up for success. Erika Kullberg, an attorney and personal finance expert, says that living in a right-sized home can help you lower one of your biggest overhead expenses—your rent or monthly mortgage—which can help free up money for everything else.

"One of the most important changes seniors can make is downsizing their living expenses, such as housing costs and utilities. This can play a major part in making your retirement more comfortable and stress-free," Kullberg tells Best Life.

She adds that seniors should "strongly consider" either moving to a smaller home or a more affordable neighborhood to lower their monthly expenses.

7 Frugal Habits You Need After 65, Finance Experts Say (2)

One of the best ways to save money in your senior years is to make a financial plan and stick to it, says Jordan Mangaliman, CEO of GoldLine Financial Services in Fullerton, California.

"Seniors should maintain a detailed budget to track expenses and income," says Mangaliman. "This habit helps them understand where their money is going and enables adjustments to ensure they can cover essential needs without overspending."

If you're not sure where to begin, setting a one-time appointment with a financial planner may help you re-orient yourself to this next financial chapter.

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3

Regularly review your spending habits.

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Once you've set a budget, you can ensure you're sticking to it by regularly reviewing your spending patterns. In fact, the experts say this is one of the most important frugal habits you can adopt after the age of 65.

"Reducing spending on unnecessary items can help seniors stretch their retirement savings," says Kullberg. "They should very clearly prioritize needs over wants, constantly be on the search for discounts and deals, and continually foster a mindset of conscious spending."

Mangaliman agrees that it's important to take regular inventory of your finances and to cut out any monthly expenses on things you're not using. "This habit ensures they are not paying for services or subscriptions they no longer need, helping to free up more money for savings or other priorities," he says.

4

Curb—or budget for—impulsive spending.

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After reviewing your finances, you may notice that you spend a good deal of your money impulsively. Mangaliman says that past the age of 65, it's especially important to rein this type of spending in.

"Seniors should practice restraint when it comes to impulse purchases," he tells Best Life. "Waiting before making a buying decision allows them to consider if the purchase is truly necessary or if there are more cost-effective alternatives available."

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5

Try meal planning and prepping.

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According to data from the Bureau of Labor Statistics (via Retire Guide), American seniors spend an average of 25 percent of their monthly budget on food. That's why Kullberg recommends meal planning, which can help bring down spending at the grocery store.

By planning your meals ahead of time, you'll be able to reduce food waste that throws away your hard-earned money, spend according to your budget, and curb your take-out habit—all while eating healthier.

6

Look for deals on healthcare expenses.

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"Healthcare expenses can quickly eat into retirement savings as you age," says Kullberg.

The finance expert recommends reviewing Medicare coverage options, utilizing preventive care services, comparing prescription drug prices, and looking into supplemental health insurance plans to help control out-of-pocket costs. "Having an HSA from your working days would certainly help here as well," she notes.

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7

Utilize senior discounts and benefits.

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Finally, if you're not taking advantage of senior discounts, you're leaving money on the table. The experts say that by looking for these types of offerings, you can be frugal with your money and still maximize fun.

"Many businesses offer discounts and benefits specifically for seniors," notes Mangaliman. "Establishing a habit of seeking out these discounts can help seniors save money on various expenses such as groceries, travel, and entertainment."

Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.

7 Frugal Habits You Need After 65, Finance Experts Say (2024)

FAQs

How to be frugal in retirement? ›

  1. Target Proportionally.
  2. Choose a Lifestyle.
  3. Downsize for Savings.
  4. Trim Transportation Costs.
  5. A Frugal Approach to Food.
  6. Help Yourself to Better Health.
  7. Entertainment Options.
  8. Clothing and All the Rest.

How can I finance smartly? ›

How to be smart with money: 5 helpful strategies
  1. Set goals to help with planning. ...
  2. Build a budget that works for you. ...
  3. Find your financial comfort zone. ...
  4. Be intentional with your money. ...
  5. Make your journey personal.

Can I live on $2000 a month in retirement? ›

Retiring on a fixed income can seem daunting, but with some planning and commitment to a frugal lifestyle, it's possible to retire comfortably on $2,000 a month. This takes discipline but ultimately will allow you to have more freedom and happiness in your golden years without money worries.

What is the 3 rule in retirement? ›

The 3% rule in retirement says you can withdraw 3% of your retirement savings a year and avoid running out of money. Historically, retirement planners recommended withdrawing 4% per year (the 4% rule). However, 3% is now considered a better target due to inflation, lower portfolio yields, and longer lifespans.

What is the 50/30/20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

What's the smartest thing you do for your money? ›

10 Smartest Ways To Make Your Money Work for You, According to Experts
  • Open a High-Yield Savings Account. ...
  • Create Specific Financial Goals. ...
  • Automate Your Finances. ...
  • Plan for Each Dollar. ...
  • Get Rid of Your High-Cost Debt. ...
  • Invest in Real Estate. ...
  • Invest in the Stock Market. ...
  • Invest in S&P Funds.
May 30, 2024

What is the 30 day rule? ›

The premise of the 30-day savings rule is straightforward: When faced with the temptation of an impulse purchase, wait 30 days before committing to the buy. During this time, take the opportunity to evaluate the necessity and impact of the purchase on your overall financial goals.

What is the 70% rule for retirement? ›

The 70% rule for retirement savings says your estimated retirement spending will be 70% of your pre-retirement, post-tax income. Multiplying your post-tax income by 70% can give you an idea of how much you may spend once you retire.

What is the cheapest way to retire comfortably? ›

  • Pay Attention to Spending. Take a careful look at what you buy each month. ...
  • Keep an Emergency Fund. When living cheaply in retirement, it can be helpful to have funds set aside for unexpected expenses. ...
  • Plan Meals. ...
  • Live in a Low-Cost Area. ...
  • Buy and Sell Secondhand. ...
  • Travel on the Cheap. ...
  • Take Preventive Steps.

How much do I need to retire frugally? ›

To help simplify, start by setting a savings goal based on a multiple of your current salary, based on your age. If your plan is to live a more frugal lifestyle in retirement, then your final goal might be eight times your salary saved by the age of 67.

What is enough money to retire comfortably? ›

By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.

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