Spending wisely is a good habit in all stages of life, and retirement is no exception. This includes being frugal. Some things are worth being frugal over far more than others. The trick is to know when to take that extra savings step.
There’s no specific formula to decide when being frugal has gone too far, but if it costs you more time, effort, and money or doesn’t make you feel good, it’s probably not worth it. Avoid these frugal habits if you want to live your best life while being careful with your money.
1. No Hobbies
One of the best parts about retirement is finally having the time you want to dedicate to your hobbies. Taking art classes, building on the collection of your favorite item, or gardening are some examples of hobbies that cost money.
Refusing to invest in your hobby makes life sad, depressing, and more than a little dull. Engaging in a hobby can make you feel happier and improve your well-being. Enjoy it and if you don’t have one, find something that brings you joy.
2. Selling Your Car
Owning a car during your working years is a necessity for most commuters. Once you retire, there’s no need to own a car because you’re not driving back and forth to work, right? That depends on how often you drive.
Just because you’re not driving to a job five or more days a week doesn’t mean you should sell your wheels. Do you drive to doctor appointments or to visit family and friends? If you need to drive routinely, then it’s best to keep your car.
3. Cheap Health Insurance
Opting for the least expensive health insurance coverage is an easy way to save money, but it’s not advisable because it could come back to haunt you in the event of a catastrophic, unexpected illness or injury.
Cheaper health insurance plans may have a low upfront monthly cost, but they usually don’t have adequate coverage and have substantially higher copays and coinsurance amounts. If you need to use the insurance, your out-of-pocket expenses could be enormous.
4. Excessive DIY
There’s nothing wrong with completing little do-it-yourself projects around your home. It can be a rewarding activity that saves you money. The problem comes in when you try a project that’s too complicated.
Unless you’re trained in the building trades, attempting large DIY repairs, upgrades, or additions isn’t a good idea. Some things you can do yourself. But for major projects, leave those to the professionals who have the skills and knowledge to do them well.
5. Extreme Couponing
Coupons are an excellent way to save money on household goods and services, and their use is encouraged as much as possible. The problem with extreme couponing is clipping coupons for a discount on goods or services you don’t want or need.
For example, if you find a coupon for $2 off a jar of olives but you never eat them, then why would you spend money on them? Save the coupon-clipping efforts on products and services you actually need or use.
6. No Pets
Deciding not to own a pet while working a full-time job is logical, especially if you work long hours and otherwise live alone. Pets like dogs and cats thrive on interaction with their humans, and not being there isn’t helpful.
Retirement is the perfect time to adopt a pet. They’re excellent companions, and there’s evidence of the health benefits of pet ownership, like an increased feeling of well-being, less anxiety, and decreased blood pressure.
7. DIY Car Maintenance
Commuting to work meant a certain degree of wear and tear on your car, and that required routine, professional car maintenance from time to time. Being retired may put less mileage on your vehicle, but you still need to maintain it.
If you happen to be a trained or self-taught auto mechanic, you can ignore this advice. But if you can’t tell a head gasket from a carburetor, then it’s in your best interests to continue having the professionals perform routine maintenance on your ride.
8. Hunting for the Cheapest Gas
Gas prices fluctuate so much it’s hard to keep track of its ups and downs and who has the lowest price. You’ve probably filled up at one gas station and then driven a few miles away to see the gas price at another station is lower.
That may incentivize you to drive around looking for the cheapest gas prices, but how much gas are you using just by driving around? Avoid this by downloading a smartphone app that tracks and gives you the gas prices in your area, saving you time and mileage.
9. Hiring on the Cheap
When there comes the time that you need a professional to perform a task, there’s something to be said for getting what you pay for. The most expensive isn’t a guarantee of top quality, and the cheapest doesn’t mean the work will be shoddy.
In these situations, do your homework and check out the potential candidates. How much experience do they have? What kind of feedback do they have from other customers or clients? Choose the best candidate, not just the cheapest one.
10. Always Buying Generic
One of the first rules of being frugal is to buy generic brands over name brands when possible. It’s a great way to save money, especially on your grocery bill. There are times when buying generic just won’t do and you need to buy the name brand.
Candy is one of those things that you just don’t get the same experience when you buy generic. If you have a favorite brand of gourmet chocolate candy or jellybeans, by all means, permit yourself to splurge and enjoy!
11. Buying Second Hand
Purchasing gently used items is good for the environment and saves money. Coats, clothing, and some household items are great to purchase second-hand. But not everything should be purchased in used condition, regardless of how much money is saved.
Used mattresses are a definite no-no because they’re unsanitary. And who knows what organisms are living in them? Area rugs are something else you don’t want to buy used because you have to pay to get them cleaned, which can cost as much as a new rug.
12. Buying the Cheapest Items
Unless you’re wealthy beyond imagination, you’re probably looking for bargains wherever you shop. This is a good policy, except when you buy the cheapest item on the shelf, without taking its quality and longevity into consideration.
Oftentimes the cheapest item on the shelf is poorly made. You’ll save a few dollars at that moment, but it’ll cost you more in the long term when you have to replace the item because it didn’t last very long. Spend the extra money upfront to save money later.
13. Not Traveling
Working a full-time job limited the amount of time you could spend on leisure travel. Retiring frees up a great deal of time, allowing you to travel more than you probably ever could before. Concerns about finances may curtail your ability to travel the way you want to.
You may not be able to afford that first-class flight to Hawaii, but you can take advantage of discounted airfares. You can also find reasonable prices for cruises or cross-country trains. Prefer traveling by car? Go on a day or overnight trip.
14. Not Dining Out
We all know that the cost of a meal for two at a sit-down restaurant can equal several days' worth of groceries or that a latte from your favorite coffeehouse is about the cost of one-quarter of a tank of gas. It’s a rational choice to prepare your meals and beverages at home.
There’s more to life than always making rational decisions. You may not be able to afford to dine out every night of the week and have a latte every morning, but that doesn’t mean you have to deprive yourself of the small joys in life.
