Everyone has wants and desires that extend past their basic needs into the realm of fun and enjoyment. However, if you have too many of these “fun money” expenses or they are way too expensive for your fixed income lifestyle, it might be time to get rid of a few in order to make your budget stretch a little further.
“You may still be able to dine out occasionally if your budget allows, but it should be mainly reserved for special occasions,” said Todd Stearn, the founder and CEO of The Money Manual .
If you think cooking will cost the same or similar, think again. Stearn pointed out that the USDA expects grocery prices to decrease by 0.4% in 2024. Meanwhile, they also expect the cost of dining out to increase by 4.7% over the same period.
That means that you can save big by cooking the vast majority of your meals at home.
To make cooking at home feel more special, Stearn suggested looking up recipes for dishes similar to some of your favorite restaurant meals.
“Just be mindful of ingredient costs,” added Stern. “And weather permitting, something as simple as dining al fresco or having a picnic can make a home-cooked meal feel more adventurous.”
Delivery Services
Uber Eats, Doordash, Grubhub and other food delivery services can be just as expensive as going to a restaurant and should be cut from your “fun money” according to Laura Redfern, a certified financial planner and certified financial transitionist at Shadowridge Asset Management, LLC
As Redfern explained, “… we’ve all become accustomed to these convenient food delivery apps, but have you looked at how much they cost?
“Many people don’t even realize how much more they are paying when they use these services, when compared to just picking up your order yourself. And that’s not including gratuity.”
If you’re unable to pick up your food, Redfern recommended asking a friend or neighbor to help out and then reciprocating when you can.
She said, “When you are living on a fixed income like a Social Security check, it can help to get creative by thinking about bartering rather than paying cash.”
From streaming services and magazines to software and professional association memberships you won’t need in retirement, Stearn said canceling all unnecessary subscriptions can save you a considerable sum.
“It’s easy to forget about subscriptions you have on autopay, especially when they don’t involve receiving a physical product in the mail,” he said.
“Setting aside a little time to go through your bank statements looking for these subscriptions and canceling them could add up to big savings each month.”
Gifts and Presents
If you’re living only on Social Security, Redfern advised keeping track of your spending on gifts, whether it’s for grandkids, friends or even pets.
She said, “Stop before you buy and ask yourself, are you purchasing this out of habit? Out of a feeling of obligation or guilt?”
Then ask, “Is there another way you can express what you are trying to convey through a gift? Can you get creative and make something or repurpose something instead?”
Oftentimes, in Redfern’s opinion, “a handmade gift is more meaningful to the recipient than something that was purchased at a store, anyway.”
Shopping
“Of course you’ll still need to shop for essentials, but if you treat shopping like a fun activity just to get out and wind up buying things you don’t need, that should stop,” warned Stearn.
Instead, he recommended replacing those costly shopping trips with free outings.
“What these might be will vary by your interests, physical condition and location, but they might include perusing the library and participating in free activities there, visiting local parks or hiking trails, participating in activities at a local senior center, or just getting together with friends or family for a movie at one of your homes,” he added.
Travel
According to Redfern, it’s not that you necessarily need to cut out travel from your lifestyle when you are living on Social Security, but you may want to reevaluate how you travel and spend.
“Hotels and airfare are usually the 2 biggest expenses when you travel,” said Redfern. “To cut back on these, think creatively.
“Can you pick a destination where you will be able to stay with family or friends? Can you use points or miles? Can you find special deals and discounts? Could you drive rather than fly to wherever you are going? Once at the destination, can you find free activities?”
Redfern also said that it helps to think about why you’re traveling in the first place.
“Is it to see or experience something specific to that locale? Or could you find a different destination that accomplishes a similar experience — like going to the beach — but is cheaper?” asked Redfern.
Personal Transportation
You may not think of a car as fun, but if you’re married with two vehicles and at least one of you is retired (or retiring), Stearn said it may be worth considering whether one vehicle could meet your needs.
“Many couples keep both vehicles after retiring without giving it much thought,” he said. “But even if one or both cars are paid off, the maintenance and insurance are unnecessary expenses if one car would do the job.”
According to Redfern, this is particularly true if you are leasing a vehicle.
“… in your working years, you may have been able to afford a new car every few years. When you are living on Social Security, that’s probably not the case,” said Redfern.
“I am seeing many families consolidate from two cars to one car these days, and making it work just fine. Eliminating a car payment can save you hundreds of dollars every month. That’s pretty significant for someone on a fixed income.”
On the other hand, Stearn noted that continuing to socialize as you age is important, so you shouldn’t stop leaving the house to save money.
“But if the reality is that you only leave home a handful of times per month, it may be worth considering whether you need a vehicle at all,” he continued. “You might want to do the math and see how much public transport or a ride-sharing service like Uber could save you each month.”
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