How retirees can cut expenses

With few opportunities to boost our income, it's time to think about lowering expenses.

Those of us who are pushing 60 have seen a lot of economic ups and downs. The latest down was one of the worst, and one of the longest-lasting. Data released this week shows the economy is still struggling. Home sales decreased in March and the four-week average number of people filing for jobless claims increased by 5,500 to 374,750.

With few opportunities to boost our income, it's time to think about lowering expenses. No one wants to give up the things they enjoy, whether it's membership to a health club, an occasional trip to the mall, or the comfort of air conditioning in the summer. But sometimes we pay for things we don't really use. Here are a few places to look for cuts that will not slice into your lifestyle.

1. Insurance. Have you ever joked that you're worth more dead than alive? Then maybe you don't need life insurance. If your kids are grown up and no longer dependents, life insurance may be a needless extra. Also, check the deductibles on your auto and home insurance. You can save hundreds of dollars a year by increasing your deductible from $250 to $1,000. And if your kids are no longer on your auto policy, the chances of an accident are diminished. Also, if your car is five or more years old, consider going without collision insurance.

2. Food. Do you find yourself scraping vegetables into the garbage, or throwing out moldy bags of unidentifiable leftovers from the back of the refrigerator? Approximately 25 percent of the food we purchase goes to waste, according to the U.S. Department of Agriculture. Consider cooking smaller portions, and store leftovers efficiently in the front of the icebox, where you will remember to eat them. Pick one night a week to feature leftovers for dinner. Also, resist the call of bottled water and turn on the kitchen faucet.

3. College tuition. One sure way to save money is to send the kids to a state university, rather than a private school. According to many employment experts, there is no advantage to a good, but second-rate private college over a state university when it comes to landing a job or gaining admittance to graduate school. If your children insist on a private education, encourage them to apply to several schools where they exceed the admissions requirements. Many private colleges, such as Union College in New York and Brandeis University outside Boston, hand out money to attract top students.

4. Vacation. Go out of season. Head for the beach in May, or wait until October. It's less crowded, less expensive, and often just as warm. Take advantage of destinations close to home, and save on airline tickets and car rentals. Even with gas at $4 a gallon, it's far less expensive for two to four people to drive than fly. Use some of the money you save to pay for a nicer hotel.

5. Community resources. You already pay taxes to support your local library. So, rather than buying a new book, go get one for free. Instead of paying for Netflix, borrow a DVD from the library. Many communities offer adult education classes, ranging from foreign languages to ballroom dancing. Try a cooking class, or brush up on your computer knowledge or home-improvement skills. Your community likely has concerts and arts festivals scheduled during the summer. And instead of paying up for major league baseball tickets, take your family out to a minor league ballgame.

6. Go green. Those of us who remember the 1970s know how to turn off the lights and dial down the heat and air conditioning. But a lot of people who grew up during the energy glut of the 1980s and '90s haven't had this experience. Show your kids how to open a window, or how to change an energy-wasting incandescent light bulb to a more efficient CFL bulb. And while you may not want to spend the money to trade in your SUV for a gas-sipping hybrid, you can save on gas by adopting some hypermiling techniques. Don't sit idling for more than one minute, avoid jack-rabbit starts, and keep the speedometer under 65 miles per hour. Also, try to consolidate trips. According to government figures, it costs about 50 cents a mile to drive your car, so avoiding a couple of trips per week can add up to significant savings.

Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement, and other concerns of baby boomers who realize that somehow they have grown up.



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