How To Save Money In Retirement
When retirement comes around, and a regular income stops, it is more important than ever to maximise incomings and minimise outgoings. There are many ways to do this, and Paul Lewis gives us some of his best tips on saving money in retirement.
Step 1: Keep track of spending
Keeping track of spending is one of the most important things you can do. Write down everything you spend money on so you know exactly where it goes. Small sums like £20 have a habit of disappearing very quickly without you even noticing.
Step 2: Look after the pennies
The little things such as a coffee and newspaper on the way to work build up very quickly. This example can be the equivalent of a pay cut of over £300 every year. This is money which could be in a pension. Always try to bring supplies such as food and drink from home, and when shopping buy cheap, such as loose veg rather than packaged.
Step 3: Change banks
Get the best bank account for you, and do not think you must remain loyal as they won't to you. If your current account is not earning at least 4 or 5 per cent, then change it - this may well involve online banking.
Savings should be earning at least 6% interest, and check that they still are every 6 months to a year.
It is important to never go overdrawn, and if you think you might, warn your bank to see if you can sort out an arrangement.
Step 4: Cancel life insurance
You only need life insurance if you have a dependant partner or children. Once you reach retirement age, chances are no one will still be relying on you. If this is the case, you can cancel your life insurance.
Step 5: Say no to warranties
Modern products do not go wrong that often, and the retailer is responsible for the first year anyway. Extended warranties are simply a waist of money.
Step 6: Energy saving
Look at switching your supplier for gas and electricity. Try online to find one that suits you, and opt for the cheapest supplier. It may well be best to have your gas and electricity supplied separately.
Step 7: Direct Debit
Direct Debits are good because you never miss a payment, and it is often the cheapest way to pay. Arrange these for all your utilities.
Step 8: Sort out debts first
Before investing in anything such as pensions or savings accounts, always clear your debts first, as it will only be harder to clear them in retirement.
Never pay the minimum ( paying off £1000 on a typical credit card at this rate would take twenty-one years!)
Step 9: Say no to instant credit
Say no to credit generally, but especially instant credit. "Pay nothing now deals" are mainly tricks. Always try to buy from your savings, and if you really have to borrow, only ever use a bank loan or your credit card.
