How to Keep Monthly Expenses Stable in Retirement

In retirement, you’ll likely be living on a consistent budget with fixed monthly expenses. If that budget is ample, you should easily be able to meet all your needs. But if you want to live a more comfortable, confident, financially stable life, you’ll need a plan in place to ensure that your income and budget are able to meet all your needs consistently.

That means you’ll need a plan to keep your monthly expenses as consistent as possible in retirement.

General Principles for Consistent Expense Planning

Let’s start with some of the most important general principles for consistent expense planning and retirement. These core ideas and strategies will help you maintain consistent, reasonable expenses throughout your retirement years and across many different areas of spending.

Cut Back

Minimizing your spending is key to keeping your spending consistent. If you spend less overall and focus on living a minimalist lifestyle, there won’t be much room for your expenses to increase.

For example, imagine the difference between a person who buys groceries based entirely on intuition and a person who buys only what they need. The first person is probably going to see significant peaks and valleys in their ongoing grocery spending, while the second person spends approximately the same amount every month. Much expense volatility can be attributed to unnecessary expenses and waste, so if you remove these from the equation, you’ll naturally be more consistent.

Plan Proactively

Next, try to plan as proactively as possible. It’s impossible to predict everything, and there will always be things you don’t foresee, but the further ahead you plan and the more thoroughly you plan, the more control you’ll have over your expenses. Additionally, you’ll be able to predict and plan for unexpected expenses that may be on the horizon.

Plan Conservatively

Even with proactive planning, there are going to be weak points in your plan. Prices are going to rise in certain areas and you’ll likely face unusual circumstances that you weren’t able to build into your plan.

Accordingly, it’s also a good idea to plan conservatively. In other words, always budget a bit more than you think you’ll need. If something unexpected does increase your expenses, you’ll be prepared for it, and you won’t have to throw your entire budget out to accommodate it.

Prevent or Accommodate Abnormal Increases

Finally, do what you can to prevent or make accommodations for certain excessive, abnormal expenses. For example, if you use your car on a regular basis, eventually, it’s going to need major repairs. But you may be able to delay or even eliminate those repair needs by taking good care of your vehicle and maintaining it regularly.

Now, let’s take a look at individual areas of spending that can be made more consistent through proactive and conservative planning.

Housing Expenses

One of the biggest expenses you’re going to face in retirement is housing. You need a place to live – and it’s probably going to take 30 percent of your gross income (or more). If you’re already living in a house that’s paid off, or if your house will be paid off in the near future, you’ll be in a good position already.

Otherwise, you’ll need to pay close attention to these strategies:

Choose a multi-year lease.

If you’re renting, choose the longest lease agreement you can, assuming you’re not in a position to move in the near future. This will lock in your rent, preventing it from increasing during the term of your lease. There are some downsides to this strategy, of course, but it can keep your core expenses more consistent for longer.

Factor in property tax increases.

Property taxes almost never decrease. Property taxes in most areas increase steadily over time, and they’ll increase even further if the value of your property increases. You need to be prepared for this, even if your house is paid off. Build in anticipated property tax increases to your monthly budget.

Be willing to make insurance adjustments.

Home insurance is another important component of your monthly housing expenses, and it may be rolled into your mortgage. If your expenses increase in other areas, you may need to make adjustments here. Shopping around to discover less expensive providers and making small changes to your coverage may be able to save you significant money here.

Invest proactively in upkeep.

Finally, invest proactively in upkeep. Paying $200 a year for HVAC maintenance and routine service is very consistent and predictable, and even more importantly, it could prevent you from having to pay $5,000 or more for a major replacement.

Utilities and Basic Necessities

Utilities and basic necessities aren’t something you can cut out of your life, but there are key strategic areas where you can increase consistency and save money.

Reduce reliance on paper products.

Chances are, you’re already spending too much money on paper products. With a bidet attachment, you’ll be able to eliminate the…