Stepping into retirement brings along a bunch of changes in your bank account. For starters, you can say goodbye to daily commuting costs when you stop working. Plus, now that you’re spending more time at home, you can also cut down on some extra expenses, like professional clothing, restaurants, and pet services.
A tip for you: Check how much you need to retire with a $100K lifestyle!
Want to know more? Discover how to achieve guaranteed growth on your savings without putting your principal at risk!
When it comes to deciding which bills to cut first during retirement, it largely hinges on your own financial situation. But for many new retirees, there’s typically one clear winner that allows you to save without cutting into your comfort.
Generating passive income doesn’t have to be a hard task. Seriously, you can kick things off this week!
The Top Expense to Ditch: Selling the Second Car
If you previously needed two cars to navigate juggling work schedules, now that you’re both home all day, it might be time to live the single car lifestyle. Ditching that extra car payment—along with its associated fees, insurance, gas, and upkeep—can instantly buff up your finances in a major way.
According to the AAA’s 2025 Your Driving Costs report, owning and operating that new car costs an average of $11,577 per year, which folds down to about $965 each month. This marks a decrease compared to last year’s cost of $12,297, thanks to factors like lower depreciation and fuel prices.
Of course, as experts point out, your actual expenses can swing widely depending on car choice and upkeep expenses. But even spending just half of the average on your second car, you might find yourself spending around $480 monthly—which could be spent more effectively on essential things like housing, utilities, groceries, and health care.
As a bonus, you could use the cash from selling that second car to pay down debts or boost your savings!
More Expenses to Consider Cutting in Retirement
If a second car isn’t on your list, here are some other areas where you can trim your expenses for a healthier financial future during your retirement:
Dining Out
Eating out is more of a luxury than you may realize, and axing it from your routine can result in significant savings. If you’re not feeling like cooking, many grocery stores offer prepared meals that can save you a lot compared to restaurant prices.
Impulse Buys
It might be tempting to treat yourself to spontaneous purchases, whether they be last-minute road trips, the newest gadgets, or kitchen tools. Remember, retirement is the phase when it’s essential to practice financial restraint in these areas.
Traveling During Peak Times
When you were busy working, traveling often meant battling crowds and skyrocketing prices during weekends and holidays. Now that your schedule is more flexible, consider planning your trips during weekdays or less busy seasons to save big on lodging, airfare, and transportation.
Wrapping Things Up
Slashing unnecessary costs in retirement doesn’t mean sacrificing your quality of life. By letting go of that extra car and other non-vital expenses, you’ll free up funds that can bring peace of mind and a strong financial backbone for a secure and comfy retirement.
This article was originally published on GOBankingRates.com: The Top Expense to Eliminate in Retirement without Losing Your Lifestyle
