Resolve to Become Healthier
For many people, healthcare will be one of their largest expenses in retirement. A couple age 65 who retired in 2020 is estimated to need $295,000 to cover medical expenses throughout retirement, according to Fidelity Benefits Consulting. By the way, that estimate does not include any costs associated with nursing-home care. It applies only to retirees with traditional Medicare insurance coverage. It does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care.
Here’s a key to that estimate: It’s calculated for average retirees, but the cost could be more or less depending on where you live, your longevity and your health.
Fidelity says many people nearing retirement underestimate the amount of savings they may need to cover health-care costs. In one poll, respondents guessed that they would need only $50,000.
So to save money, get healthy or healthier. Eat better. Exercise. Your health can have a big impact on your wealth.
Set a threshold for your big purchases. It’s one thing to spend $20 at Target on a whim, but if you ever want to buy something $50 or $100 or more, give yourself at least a 24-hour waiting period to make sure you’re reflecting on the purchase. Ask yourself what you’re giving up in lieu of this purchase. Is it going to be that you’re not going to go out for the next month? Where are you going to make up the difference? Because it’s money that hasn’t been accounted for.
We recommend setting your threshold at $50 or $100, depending on your budget. During your waiting period, ask yourself why you want this item and what it means for you — whether you really need it or want it to keep up with the Joneses. If it’s more the latter, remind yourself that when you’re comparing yourself to other people, you’re seeing their best self — not the financial issues behind-the-scenes that make you keep up with them.
If there’s a particular category of your budget that needs scaling back, look at your past spending to set a limit. For instance, if you know you’re spending $400 a month on going out, say, ‘I’m going to cut that in half — I won’t go out to dinner but I’ll go out to lunch and brunch with friends.” So, have a conversation about where you’re willing to make adjustments to meet this goal.
Plan for the Holidays
Time goes by quickly; look how fast last year went. This is the perfect time to plan for this year. Determine your holiday budget based on what you spent last year. Examine who you are buying for, food, travel, entertainment, decorations, postage, etc., and start saving. If possible, start shopping now. It will give you time to look for deals as well as purchase that perfect something without all the holiday stress.