8 Budget Fixes That Can Free Up Thousands a Year After Age 50
By the time you hit your 50s, your income may be higher than ever but you may also engage in subtle money drains.
The biggest budget problems at this stage are often embedded in habits, subscriptions and long-standing financial decisions that no longer fit your life. Financial experts offer seven budget fixes to free up thousands per year after 50.
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1. Reset Your Spending Baseline To Stop Lifestyle Creep
It's typical for people to fall pretty to some amount of lifestyle creep, according to Andrea Woroch, money saving and consumer expert at AndreaWoroch.com. That can "trap you in the paycheck-to-paycheck cycle and keep you from reaching various goals."
One of the most powerful budget fixes after 50 is recalibrating your spending to match your current goals. By intentionally scaling back non-essential upgrades, you can free up meaningful cash flow without sacrificing your quality of life.
2. Cancel Unused Subscriptions and Audit Recurring Bills
A quick subscription audit is one of the fastest ways to reclaim money, Woroch said. She pointed out that 42% of consumers pay for a subscription service they forgot about and don't use. And 47% of consumers pay for a streaming service they never or rarely use.
Cutting just a few unused services can easily save hundreds per year.
3. Right-Size Your Housing Costs
Housing is often your biggest expense--and your biggest opportunity to save, according to Dr. Chris Mayer, CEO of Longbridge Financial. His research revealed that over 8 million homeowners over age 65 spend more than 30% of their income on housing costs and half of them spend more than 50% of income on housing.
"At the end of the day, it isn't just about downsizing, it's about rightsizing your housing costs to your retirement cash flow needs," he said.
Whether through downsizing, refinancing or leveraging equity, this fix can have the biggest financial impact.
4. Cut Transportation Costs
If your daily routine has changed, your transportation needs likely have too. Reducing from two vehicles to one can significantly lower monthly expenses.
Woroch noted that a retired couple--or even if one partner is retired--may be able to live with just one car rather than two. She said, "This would cut your car payments, insurance and expenses in half."
5. Put Limits on Dining Out and Hobby Spending
You don't have to eliminate the things you enjoy, but putting guardrails around them can prevent overspending. For example, Woroch said that if you love dining out because cooking isn't your favorite activity, "make sure it fits in your budget and that you aren't getting carried away eating out all the time."
For hobby expenses, which can easily mount if you aren't paying attention, she urged setting a monthly cap or seeking discounts.
6. Lower Monthly Bills by Bundling or Negotiating
You may not be able to get rid of some of your biggest bills, but you can try to save money on them strategically. Woroch recommended bundling insurance policies and increasing your deductible to save up to 20% on plans.
The same goes for streaming entertainment bundles and data plans--look to get more for less by comparing plans and providers or negotiating.
For cell phone plans, she said, "Studies show that most consumers use around 15GB of data each month so if you have unlimited data, you're wasting money on a pricey plan you don't need."
7. Use Interest Strategically for Debt and Savings
Improving how your money works for you is a key budget fix that often gets overlooked.
The first thing is to "Stop wasting precious money on credit card interest," Woroch said. While working to pay off a purchase or high levels of credit card debt, she recommending opening a balance transfer credit card where you can benefit from 0% interest for up to 21 months.
If you're saving money, be sure you're taking advantage of high-yield accounts, which she called "free money." These accounts pay a much higher interest rate than traditional banks.
8. Track Your Spending Monthly
Even the best budget fixes won't stick without visibility.
"Scrutinize monthly expenses and list all recurring bills and their associated costs by reviewing your bank and credit card statements," Woroch said.
Using budgeting tools or bill negotiation services can make this process easier and more effective.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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