As soon as boomers achieve retirement, they start living a frugal life. While the decision may appear logical because they now have limited income to manage their day-to-day expenses, some habits don’t deliver the desired results. Here’s a list of 12 frugal habits that rarely pay off boomers in retirement so you don’t repeat the same mistakes.
Selling Their Car
Some retirees prefer selling their cars because it saves them a lot of money. Not having a vehicle helps them save money on maintenance, vehicle insurance, fuel, etc., significantly boosting their savings or disposable income.
However, there are downsides to it. If you live in an area with poor public transportation, traveling to meet friends or family, going grocery shopping, attending routine checkups, etc., can become challenging. Things can worsen in case of medical emergencies, causing retirees more stress, panic, and even financial distress. Downsizing the vehicle can be a better option than selling it.
DIY Repairs without Proper Skills
Maintaining a property isn’t cheap. According to a report, homeowners spent approximately $6,000 on average on their home repair and maintenance in 2022. $1,953 was spent on unexpected repairs, while the regular maintenance averaged $2,467. So, it’s understandable why retirees prefer doing repairs independently.
However, trying to cut down money on necessary maintenance can cause more financial damage than good. When retirees repair things without adequate knowledge, skills, and resources, they may increase the intensity of the existing damage. For instance, trying to fix a broken water line instead of calling the plumber may damage the other water lines, causing even greater financial damage.
Hiring Cheap Labor
One of retirees’ most common mistakes is hiring cheap labor over qualified professionals to finish their tasks. While it may appear financially viable, this short-term saving can easily be eclipsed by long-term costs.
People good at their work don’t work for cheap rates. When you pay slightly higher to skilled professionals, you’re paying to ensure the problem is fixed for an extended period. If you have budget constraints, look for affordable quotes instead of hiring the cheapest option available to save money.
Neglecting Good Medical Insurance
Some employees receive healthcare coverage from their employers during their active work years, but the coverage ends during their retirement phase.
If you don’t cover yourself under the right medical insurance plan, you are more likely to face challenges while seeking quality treatment. 65-year-olds retiring today will require approximately $165,000 on their healthcare during retirement. Failure to have sufficient funds can make healthcare inaccessible, worsening health conditions in retirement years. Hence, ensure you don’t try to save money on medical insurance because it can backfire.
Clipping Coupons for Non-Essentials
Couponing is seen as a smart way to save money, but retirees don’t realize that it encourages unnecessary spending. Some retirees end up purchasing non-essential items because they had a good deal. If you want to save money during retirement or be mindful of spending, ensure you don’t buy anything simply because of an offered discount.
Coupon clipping often leads to impulse buying, damaging your financial health. Use coupons on items you would have purchased anyway (even without any discount) instead of using them for irrelevant purchases.
Buying the ‘Cheaper’ Items
Every penny counts during retirement, so retirees often try to buy cheaper products to save money. However, it can cost them a lot of money in the future. There are specific product categories where every person should choose quality over price.
Always choose quality products if you’re buying electronics, tools, kitchen appliances, insurance, professional services, car seats, mattresses, and footwear. For instance, buying cheap power tools over quality ones can lead to injury, and choosing a low-priced mattress may fail to provide the desired comfort and support.
Not Pursuing Hobbies
Many people work extremely hard so they can enjoy a comfortable and leisurely life during their retirement. While it is the best period to indulge in hobbies, some retirees try to save money by not spending on their preferred hobbies.
Surprisingly, spending money on hobbies can benefit them more. Research proves that taking time out to do activities you love significantly improves your mental health and overall well-being. It translates to fewer health challenges, so you don’t end up paying hefty fees for treatments, such as mental health therapy.
Driving Long Distances for Cheaper Gas
Another tactic some retirees use to save money is by driving longer distances for cheaper gas. It may look like a good decision, but it doesn’t make much difference.
One vehicle owner revealed he never followed this tip because the chances of finding gas cheap enough to justify the extra gas burned to reach the station is slim. The effort isn’t justified either. Hence, retirees should stop traveling to distant gas stations for cheaper gas.
Hoarding Items in Bulk
Buying items in bulk is a hallmark of various retirees as they believe it will help them save money and enjoy great deals. In reality, it puts them under more financial strain. When you buy excessive items in bulk because of an offered discount or an irresistible deal, you also need additional storage options. Bulk buying often leads to higher food wastage and pushes people into a never-ending loop of overconsumption, causing financial strain.
Refusing to Outsource Household Chores
Retirees should spend more time participating in activities they enjoy, not household chores that may drain them. While retirees don’t necessarily take up work during retirement, outsourcing household chores can still benefit them by preserving their mental and physical energy. It can help them stay active and healthy, reducing their need to spend on unnecessary medical expenses.
Avoiding Technical Upgrades
Technological upgrades may seem unnecessary to some retirees, but they shouldn’t be neglected. Saving money by sticking to old tech-enabled devices isn’t smart because the benefits are almost insignificant. Spending money on necessary technical upgrades can simplify retirees’ lives by facilitating smooth connections with friends and family.
It also benefits them by bringing healthcare to their fingertips via telemedicine facilities on smartphones and keeping them entertained through numerous digital content options.
Neglecting Paid Financial Advice
There is a myth that professional financial advice is only for working professionals. It often makes retirees DIY investors instead of seeking financial advice from qualified professionals. Some even avoid it to save money. However, this frugal habit can cost you more money, especially if you have investment income lying in your account.
Professional financial advisors can suggest safer investment options to make your money grow over a period, making your retirement years more comfortable. Making uninformed investments or financial decisions may make you lose your savings, causing irreversible financial damage.
