Spend or Save? Smart Money Management to Enjoy Life in Retirement
For retired baby boomers, creating a financial plan can be tricky. You’ve saved up for retirement and want to make sure you stay on secure financial footing. At the same time, you deserve to enjoy yourself, which sometimes means spending money. So, how do you achieve this delicate balance? Start by looking at your savings and making sure you’re protected for the future. Then you can come up with a plan that allows you to spend wisely on what matters most.
Are You Protected Financially?
Before you can determine your budget for fun, it’s important to make sure you’re covered financially, now and for your future. One of the biggest expenses retirees face is medical care, and if you don’t have the right coverage, you could face medical costs that significantly throw off the rest of your plans. If you haven’t signed up for Medicare, don’t wait to research plans and sign up. Online resources can be incredibly helpful at guiding you through the process of enrolling for Medicare, as well as finding supplemental plans to get help paying for other medical expenses like prescription drugs, vision and dental care.
Along with the right medical coverage, it’s also good to think about the care you want to receive in the future, because long-term care costs can affect your nest egg. To make sure your savings are protected, look into the benefits of long-term care insurance and how it can help pay for assisted living if you need it later in life. When doing your research, resources like Consumers Advocate are valuable for finding information on the best long-term care insurance companies.
Do You Have a Budget?
Once you’ve taken care of these financial responsibilities, you can set up your budget. Retirement is a unique stage in life, so it helps to use a guide like this one from The Balance. Doing so helps you see your financial picture more clearly. You may even want to use a money saving app to track expenses and make it easier to stay within your budget
With your overall budget in mind, consider these tips for balancing frugality with fun:
Spend Less Every Day: Whether it’s necessary expenses like food or extras like travel, you can be money-smart by getting discounts on just about anything. The Huffington Post recommends getting an AARP membership, which offers discounts on services, travel, restaurants and much more. You can also do a web search and even ask around at local establishments to see who offers senior discounts.
Save vs. Splurge: You probably have ideas for how you want to enjoy retirement, from everyday things like hobbies to bigger goals like travel. The key is to find ways to save on some, while splurging on others. For example, if travel is high on your list, taking a big trip may be splurge-worthy. To do this without busting your budget, Kiplinger recommends giving yourself plenty of time to pay for your big trip. On the other hand, you may find that taking a road trip will be just as rewarding as something more costly like a cruise or international travel. The main thing is to consider what matters most to you and how you can do it while staying on budget.
Think Outside the Box: Another key to living your best life without going over budget is to have an open mind. You know how you expect your retirement to look, but what if there are options you haven’t considered? If your dream is to travel, maybe you could go RVing full time. Or you might be able to turn a hobby into a source of income. This next stage in life is full of possibilities, and thinking outside the box can make your dreams a reality without depleting your savings. Finding that balance between spending and saving isn’t always easy or straightforward. The thing to keep in mind is that you always have options. With careful planning and a little creativity, you can absolutely enjoy life now while also preserving your finances for the future.