Living on a reduced income can be daunting, but there are ways to cut costs.
While some lifestyle compromises must be made, living frugally in retirement doesn’t necessarily mean reducing your quality of life. To avoid spending more than you need to, consider these five tips to ensure that you only pay for the things that are really important.
1. Manage bank fees
Keeping your finances in order is the best way to ensure you enter retirement on a strong footing. Now that you are earning less, you’re hopefully going to be spending less, so you should review the types of credit cards and bank accounts you need. For example, do you still need your Qantas frequent flyer credit card if you won’t be spending regularly enough to accrue points? Perhaps consider going for a fee-free card. The same goes for your bank accounts. Why pay unnecessary account fees? You can find out which accounts don’t charge a monthly fee on CHOICE’s website.
2. Assess your household costs
When looking for simple ways to save money, reducing your household utility costs is a great start. You can save on water and electricity costs by shopping around for a better deal with each energy supplier. To compare energy offers in your area, visit the Australian Government's Energy Made Easy website. Taking shorter showers, turning appliances off at the switch and closing gaps around windows and doors to trap in the heat are also good habits to adopt.
3. Make the most of your Seniors Card
If you’re entitled to a Seniors Card, you may be eligible for discounts on energy and water bills, as well as reduced council rates, stamp duty concessions, cheaper registration, free ambulance and discount prescriptions through the Pharmaceutical Benefits Scheme. You can register for discounts on your utilities by phoning your energy and water companies and informing them that you’re eligible.
4. Check in with Centrelink’s Financial Information Service
Because you don’t know what you don’t know, a Centrelink Financial Information Services officer (FISO) can help you understand your financial situation properly and assist you in making informed decisions about investments and financial issues, now and for the future. This is a free and confidential service for all Australians. You can make a booking through the Department of Human Services website.
5. Review your insurance policies
With premiums rising all the time, it pays to review your insurance policies and get the best deals – especially before entering retirement. Whether it’s your health, life, home contents or car insurance, different providers will offer different options and it’s your job to investigate which one will be most cost-effective for you. A phone call to your insurance company to advise them that you’re looking to switch to a company offering a better deal can sometimes result in the offer of a lower premium. If you’re unsure about how to begin reviewing your policies, this insurance guide can help.
When it comes to preparing for retirement, these steps may seem small but they can end up saving you a lot of money, making life in retirement much more affordable.
This material contains general information which has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this advice you should consider its appropriateness having regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that impact your financial and legal circumstances.
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