Wednesday, October 23, 2013

Responsible Spending when Every Day is a Saturday

The other day I read something likening every day in retirement to a Saturday, which is the day when most people tend to do most of their discretionary spending.  It was a warning about the potential for overspending in retirement, a time when many of us may find ourselves with more time on our hands than money.  And that time can prove potentially dangerous to our finances when we’re looking to fill it with things that cost money like shopping, traveling, and home or yard improvement projects.  Therefore, it can be important to the health of your retirement fund to find ways to restrain your spending when every day seems like a Saturday. 

As a self-employed individual who works from home, I often feel like the days blend together.  And with plenty of extra time on my hands around the house for potential spending, I have created a few rules to restrain myself from blowing extra cash and that I plan to take with me into retirement.

Find cheap hobbies or even ones that make money
Hobbies can be great time fillers and killers.  And sometimes hobbies can even be great money makers too.  From gardening and farming, to painting, writing, and online reselling, not only can certain retirement hobbies keep you pleasantly occupied but from spending money too.

As you might guess, I enjoy writing not only for a living, but as a hobby as well.  It’s a great way to express creativity and keep myself busy and from spending cash doing other things.  I also like doing home repairs, growing our own food, having garage sales, doing a little Dumpster diving, and partaking in other projects that either save money -- or as with garage sales -- sometimes even make us a little extra cash.  And these are all things that I can carry with me into retirement to keep me affordably entertained.

Downsize transportation
Over the years of being a work-at-home parent, I’ve realized that if I don’t have a convenient form of transportation, I’m much less likely to go out and spend money.  After we downsized by one vehicle when I started working from home, my wife used our other vehicle to get to work each weekday.  This meant that not only do we save an extra $1,000 or so each year on not maintaining and insuring a second vehicle, but without that easy form of transportation available, I’m not as likely to go out from sheer boredom and spend money shopping or doing whatever. 

A similar situation could help cut costs in retirement when the opportunity to spend is limited through vehicle downsizing.  If the hubby or wife is out with the car, it can reduce that inclination to head out and spend just because you’re bored.

Budget carefully
For many of us, retirement could be the most important time to budget.  With possibly limited income and plenty of time on our hands to do with as we please, knowing where our money is going and in what amounts can be critical to successful personal financial management.

But even more than just laying out budget numbers to hit, you might find that tracking costs and incomes related to various hobbies could be extremely useful as well.  Knowing how much is spent on certain hobbies, how much income a hobby might bring in, and similar data can provide a better breakdown of what your activities are costing you.  Not only this, but tracking such costs could be helpful when it comes tax time as certain business expenses relating to the earning of income might be tax deductible.  Just as writing is a hobby for me, it’s also my prime source of income, and certain expenses related to the business side of this activity can reduce my tax liability.

Therefore, paying attention to your hobbies in retirement could help you financially in a number of ways.  Not only can they keep you busy and from spending money out of sheer boredom, but they could help you make back some of your costs (from things like resale activities) or even make a little cash in your golden years.


The author is not a licensed financial professional.  The information provided in this article is for informational purposes only and does not constitute advice of any kind.  Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.

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