ways to spend less http://www.wisebread.com/taxonomy/term/15647/all en-US 6 Ways to Avoid Running Out of Money in Retirement http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-avoid-running-out-of-money-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/ladies_on_bench.jpg" alt="Women on a park bench" title="Women on a park bench" class="imagecache imagecache-250w" width="250" height="127" /></a> </div> </div> </div> <p>Here's a checklist of the key strategies to maintain your spending power for as long as you live. (See also: <a href="http://www.wisebread.com/how-much-do-i-need-to-retire-how-much-can-i-spend">How Much Do I Need to Retire, How Much Can I Spend?</a>)</p> <p>Item #1 is only for people who are not yet retired, but the rest apply to everyone.</p> <h3>1. Save More Before You Retire</h3> <p>This is where most people fall down. It seems like every week there's a new report about how people aren't saving enough. If you're going to have money to spend beyond what you get from Social Security (and maybe a pension &mdash; if you're one of the lucky few who can still expect one), that money will have to come from your savings.</p> <p>The two obvious ways to do this are to either spend less before you retire (thereby freeing up money to save) or work longer before you retire. I recommend the former; anyone can spend less, but a plan to work longer can go awry in many different ways (your job could go away, you could get too sick to do it well, etc.).</p> <p>Useful as it is, though, &quot;<a href="http://www.wisebread.com/just-saving-more-is-not-the-answer">just save more</a>&quot; is by no means a complete retirement plan. A complete plan lets you <a href="http://www.wisebread.com/dont-despair-over-small-retirement-savings">start from where you are</a> and make do with what you've got. Read on.</p> <h3>2. Spend Less After You Retire</h3> <p>Spending less before you retire may be even more important, but that was covered in point #1.</p> <p>Even though it's not as important, <a href="http://www.wisebread.com/getting-by-on-a-lot-less-money-3-ways-its-easier-than-you-think">spending less after retirement</a> has the advantage of being very easy &mdash; your taxes are lower (because you're earning less), and you're able to be more efficient about your spending (because you're not spending a third of your time at work).</p> <h3>3. Find a Way to Earn Money in Retirement</h3> <p>When you think about it, retirement is a funny idea. It used to be that everyone worked as long as they could. When they couldn't hold up to a full day of heavy labor, they worked shorter hours and switched to lighter tasks.</p> <p>With the way work is organized (at least in the United States), it's pretty hard to scale back moderately. You rarely have the choice to work half as many hours for half the money. But you probably don't need to earn anywhere near that much money. Just earning a few thousand dollars a year will stretch your retirement savings much further than you might expect.</p> <p>You can do that a lot of different ways, even something as small as finding a way to <a href="http://www.wisebread.com/make-your-hobby-pay-its-way">make your hobbies pay their way</a>. Wise Bread is full of ideas for <a href="http://www.wisebread.com/getting-by-without-a-job-part-2-boost-income">earning a little more</a>.</p> <h3>4. Invest for Income</h3> <p>Early in your career, you probably want to <a href="http://www.wisebread.com/the-false-goal-of-maximizing-investment-returns">invest for maximum growth</a>. But well before you actually plan to retire, you should start shifting some of your investments toward income &mdash; because income can be spent without depleting your capital.</p> <p>That isn't the fashion these days. The modern wisdom of retirement planning is to figure that you can spend some of your capital every year, on the theory that <a href="http://www.wisebread.com/the-end-of-the-4-rule">your money only has to last the rest of your life</a>, and you're not going to live forever.</p> <p>But investing for income, and then holding the line on spending beyond that, is much safer.</p> <h3>5. Monitor Your Assets in Retirement</h3> <p>Since you can't know the future, there's no way to be sure that your portfolio will achieve any particular investment return, nor that it will support any particular spending level. But you can know the recent past.</p> <p>Your portfolio will decline if the assets you've invested in go down. It will also decline if you're spending capital faster than it's growing.</p> <p>If you've got a diversified portfolio with a strong income component, you don't need to worry about day-to-day portfolio fluctuations. But year-to-year <a href="http://www.wisebread.com/pay-attention">portfolio fluctuations need to have your attention</a>.</p> <h3>6. Respond to Changes</h3> <p>When you see a decline in your assets (either because your spending is outstripping your income or because the markets have moved against you), find additional ways to economize.</p> <p>This is really the key action for avoiding running out of money in retirement &mdash; if your capital is declining at an unsustainable rate, spend less.</p> <p>There are a lot of ways to spend less, both on an <a href="http://www.wisebread.com/emergency-belt-tightening">emergency basis</a> and over the <a href="http://www.wisebread.com/living-cheaply-for-the-long-term">longer term</a>.</p> <p><em>This post was prompted by a headline I saw for an article that offered four ways to avoid running out of money in retirement. &quot;Four?&quot; I thought. &quot;I can beat that! I'll write an article about <strong>five</strong> ways to avoid running out of money in retirement.&quot; Then, once I started writing it, I found there were six.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-essential-truths-for-a-successful-retirement">7 Essential Truths for a Successful Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees">Boost Your Retirement Savings: Avoid 401(k) Fees</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-thoughts-everyone-has-their-first-day-of-retirement">6 Thoughts Everyone Has Their First Day of Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-calculate-future-value-and-why-it-matters">How to Calculate Future Value, and Why It Matters</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement part-time job retirement planning ways to spend less Thu, 20 Sep 2012 10:24:42 +0000 Philip Brewer 954554 at http://www.wisebread.com 4 Quirky Ways to Spend Less and Kick-Start Saving http://www.wisebread.com/4-quirky-ways-to-spend-less-and-kick-start-saving <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-quirky-ways-to-spend-less-and-kick-start-saving" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6709439335_04bc5a04f8_z.jpg" alt="man in mid jump" title="man in mid jump" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Starting a savings plan can be fraught with stress and anxiety. People worry about not saving enough, not being consistent, giving in to spending temptations, and not knowing how to invest what they save. The whole enterprise is enough to leave some people stuck in a chronic state of analysis paralysis.</p> <p>For beginners, the best approach is to make saving less work and more experimental. Dip your toes in the water by trying some unorthodox methods of spending less and saving more money. Granted, these ideas might not fully fund that retirement plan or turn your job into just a 9-5 hobby, but they might make saving more fun and pave the way to more serious strategies. (See also: <a href="http://www.wisebread.com/5-easy-ways-to-add-50-to-your-pocket">5&nbsp;Easy Ways to Add $50 to&nbsp;Your&nbsp;Pocket</a>)</p> <h3>1. Choose a Denomination</h3> <p>How many quarters pass through our fingers in a year? How many five dollar bills do we touch in a lifetime? What if we decided to eliminate one denomination of currency from our consumer lives and made a silent promise to never spend it? Experiment with how this would work for quarters (no more quarters for vending machines; no more quarters for parking meters; only the nickel slots in Vegas, etc). Save &lsquo;em all in a big Mason jar and count how much money you accumulate each month. Or, go big &mdash; make fives your target. Over time, those Lincolns would surely become synonymous with saving, and pocketing them would become second nature.</p> <h3>2. Impose a Spending Moratorium</h3> <p>I have enough shirts for two men. I have shirts for every season and nearly every occasion. I could, without a moment&rsquo;s discomfort, choose to not buy another shirt for two or three years. Try it yourself &mdash; choose a category of spending and take a month off (or a quarter&hellip;or a year). How much could you save if you abandoned an entire category of spending like footwear or movies at the theater?</p> <h3>3. Decide to Buy Used</h3> <p>Similarly, consider creating or expanding entire categories of things you buy used. Buying second-hand shoes, for example, can sometimes creep people out. But choosing lightly worn, well-cared-for, and clean used shoes can be a real money saver. Try it; you might like the fit. Or consider sourcing eBay, Amazon, your local <a href="http://www.wisebread.com/to-buy-or-not-to-buy-criteria-for-thrift-store-clothes-shopping">thrift store</a>, or garage sales for books (the old printed kind) and make the $14.99 new ones a thing of the past. As you score more great deals, expand your categories, and save more.</p> <h3>4. Create Spending Limits for Common Items</h3> <p>We all have certain financial boundaries or thresholds we typically don&rsquo;t cross. I&rsquo;m out of my comfort zone if I pay more than $6,000 for a <a href="http://www.wisebread.com/guide-to-buying-a-used-car-without-going-crazy">used car</a>, and I get a little shaky if my share of a dinner out exceeds the $15 mark. But how much could we save (and how relatively painless would it be?) if we created hard-and-fast spending limits for things we buy every day? Impose a Monday through Friday lunch limit of $3.50. Decide to never pay more than $20 for a pair of jeans. How much more could we sock away if we adjusted those limits downward every six months? Create a few spending limits and experiment with the lower end of your thresholds. Throttle back.</p> <p>Deciding to spend less and save more doesn&rsquo;t have to be stressful, and you don&rsquo;t have to do it perfectly. Success lies in dedication to the experiment &mdash; seeing what methods work for you, finding out what your spending triggers are, and deciding the best way to turn a few quirky ideas into a full-fledged savings strategy that fits your personality.</p> <p><em>What novel ideas have you had about ways to spend less? Have any of your friends ever responded with &ldquo;You do what?!&rdquo; when they hear about your latest savings strategy?&nbsp;</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/4-quirky-ways-to-spend-less-and-kick-start-saving">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-more-by-avoiding-multiple-bank-accounts">Save More by Avoiding Multiple Bank Accounts</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-get-paid-for-saving-money">6 Ways to Get Paid for Saving Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/zen-and-the-art-of-hiding-money">Zen and the Art of Hiding Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-iq-test-how-healthy-are-your-bank-accounts">Financial IQ Test: How Healthy Are Your Bank Accounts?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-to-consider-before-you-open-an-online-savings-account">4 Things to Consider Before You Open an Online Savings Account</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Budgeting buying used savings accounts ways to spend less Mon, 26 Mar 2012 09:48:30 +0000 Kentin Waits 913173 at http://www.wisebread.com