24 Expenses to Cut and Put into a Retirement Fund

If you’re getting closer to retirement and know that you’re going to be on a very tight budget, making tweaks to your lifestyle and pinching pennies here and there may free up more money to put away in a retirement fund. Better to make sacrifices now than be left wanting in the long run. And it’s easy. Just see how many of the following types of expenses you can cut or trim right now. Cutting expenses doesn't have to be complicated and you don't necessarily need more income to save extra money. Financial experts also recommend putting away the money you want to save right away, possibly in a separate account, to avoid spending it later. Here are some more tips for spending less.

1. Get Rid of Storage Rental

Clean out your garage and make room for what you pull from storage. First, get rid of what you don’t really need to keep in the storage room. When money’s tight – or you foresee money being scarce in your retirement years – it’s time to stop hoarding. Have a garage sale and make some extra cash by selling what you never use anyway. Storage rates are expensive, and if you can’t take out everything, you can at least downgrade to a smaller and less expensive storage unit.

2. Become a One Car Household

As we get older we wander less and when we do, it’s usually with a partner. Let's face it car payments are expensive. Consider sharing a car, especially if one or both of you works from home. Uber is just as efficient in cases when you absolutely need to transport yourself from one place to another and the lone car is not at home. If you absolutely need more than one car, get a multi-car policy at the very least. You’ll save a bunch of money.

3. Drop unnecessary Insurance Coverage

If your car is worth a couple of thousand dollars, you’re wasting money on full coverage auto insurance. Chances are that after paying the deductible, you’ll get very little back, the market value of the car to be exact. You can check to see how much your car is worth by visiting Kelley Blue Book. You won’t need collision and comprehensive coverage if your car is valued below $4,000. You may, however, consider buying a roadside assistance rider as your car ages and becomes more prone to roadside emergencies.

4. Compare Insurance Rates

Chances are that if you haven’t compared insurance rates for auto, home, renters, commercial and even health insurance, you’re paying too much. These days, you can compare rates for free, and find a reputable insurance agent who can find you discounts and bundle deals to bring down all costs considered.

Some people even find that they save money buying health insurance in the marketplace instead of getting it through an employer, because they meet income requirements that are eligible for state subsidies.

5. Quit Smoking and Drinking

Not only do smoking and drinking shave years off your life, they are expensive and cause expensive health conditions down the line. If you’re already concerned about retirement funds being insufficient, the last thing you want is to have to deal with chronic liver or heart disease caused by drinking and smoking. Vaping is also not a safe alternative to smoking cigarettes. Drinking is also linked to obesity and is deadly for people who are diabetic.

6. Stop Buying Coffee

Stopping the $4-6 drain on your wallet each morning is perhaps the easiest way to cut costs with little effort. You’ll save even more if you make more stops throughout the day. All you have to do to not feel deprived is to figure out which type of coffee you like and prepare it at home. You don’t even need to invest in an expensive coffee maker, when a French press does it better anyway. For making iced coffee, the granulated instant varieties at the grocery store will work wonders if you use a frother.

After you add up how much money you’ve been spending on buying coffee at the coffee shop, you’ll find that you will still save, even if you buy expensive coffee to make at home.

7. Streamline Cable and Streaming Services

First, you’ll have to cut the cable. For those of you who grew up with cable TV the adjustment will be hard but not impossible, once you get used to streaming services. If you spend money on both, you’re just flat-out wasting money. Streaming services are by far less expensive than cable, but even then you need to be mindful of not subscribing to too many, because the monthly bills will add up.

8. Stop Eating Out

The food you prepare at home will consist of better quality ingredients and will be healthier than your options at restaurants. It’ll cost less, and there’s also no tipping involved. The prices on menus have gone up with inflation, so when you consider how much you’ll save eating in, you have a substantial amount of money to put away.

9. Stop Ordering Takeout

Eating in doesn’t mean getting Doordash or UberEats, both of which add taxes, fees and tips to the total amount. There’s a minimal cost difference between eating out and ordering in. Just make your own food, or at least buy frozen entrees. The savings are worth the extra effort.

10. Move to a State With Lower Taxes

Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming do not have state income tax. Some states have flat taxes while others have an income threshold that must be met for paying no taxes. Most states have different tax brackets, but their rates differ. Do the research based on your income to see where you would be willing to move, to save the most money. If you work from home and have the freedom to do it elsewhere, it makes little sense why you’d live in a high-tax state, unless it affords you the lifestyle you want. If saving money is more important to you at this point in life, maybe it’s time to shift priorities.

Property taxes are also a consideration, and they range from 0.23 (Hawaii) all the way to 2.23% (New Jersey). Your property taxes may be bundled into your escrow account or if you’ve paid off your mortgage, you receive a bill each year. See how much you can save by living elsewhere.

11. Downsize

Maybe it’s time to sell the multi-bedroom home you have or just a smaller plot of land may be easier and cheaper to maintain. There are different ways of downsizing, but all are worth the consideration, especially if the family is not intent on passing down a generational home.

12. Cancel Subscriptions

Do you opt for free trials and forget to cancel the service? It’s a drag to do but check your credit cards to see which apps and websites you’re getting charged for that you forgot all about and never use. Did you sign up for a workout channel for a New Year resolution you didn’t stick to?

If you have several services you don’t use, you may save $50 or more a month canceling them all.

13. Shop Efficiently and Cost-effectively

Make lists and create a budget. This includes clothes shopping and grocery shopping and even shopping for vitamins. Figure out what is left after paying the bills. Next, transfer what you can into a retirement savings account. Whatever is left is for food and other necessities. Do some research to find out where you can shop most cost effectively. For instance, consider your household size and see if shopping at a wholesaler like Costco may save you money. If you live alone, see if you’d save buying pre-packaged veggies at Trader Joe’s versus buying each type of vegetable you want in your new recipe? See if you can find comparable outfits to the ones you want for a much cheaper price using Amazon Lens.

14. Use a Rewards Card

First don’t use a credit card unless it’s a rewards card. Set up your account to offer the types of payments you put on a card. Just try not to carry a balance because interest fees will be added on.

15. Take Staycations Instead of Vacations

It’s easy to spend a couple of thousand dollars per person on airfare and hotels. It’s just as easy to take a large chunk of that money and put it away. Keep a portion of the allotted vacation fund to do fun stuff near home. It’s always nice to support local businesses while staying ahead of the game financially.

16. Don’t Buy the Latest Phone

The average new phone costs $832.⁽¹⁾ Upgrading your phone every year may be a bad idea and not doing it would save you in the long run. In many cases, year-to-year upgrades are not significant enough to spend upwards of $1200 for the latest and greatest.⁽²⁾ You don’t need the new flip phone or a new iPhone. You just don’t. Put away the cost of the new phone instead!

17. Don’t Buy Excessive Data Storage

Although you’ll be saving one or two bucks a month, that’s an easy $12 to $25 a year that may add up with other little tweaks you make to your monthly budget.

18. Quit Your Gym Membership

Do more outdoor activities that count as exercise, like hiking or cycling. Also, your streaming services may offer yoga and mat Pilates classes and so much more. You may need to pay for a membership, but if it costs less than your gym membership, you’re still saving money.

19. Stop Paying for Personal Trainers and Classes

Even more expensive than a gym membership is a personal trainer. Fine, it makes sense to hire someone for a few hours to create a workout plan but do you really need someone working out with you several times a week? It’s so expensive! Maybe hire a trainer each time you want to take your game up a notch, but not every workout. For those who love their yoga classes, we know each class can cost anywhere from $20 to $25. If you’re practicing several times a week, consider buying a class bundle or an unlimited pass, depending on how often you go to the studio. Or better yet, sign up for the Gaia channel as part of your streaming services. You may pay less than $10 a month for yoga classes online.

20. Buy a Less Expensive Phone Plan

Do you really need unlimited data usage? Also, there are many phone service providers out there and discount plans as well, like Mint, U.S mobile and Consumer Cellular. There is also the option of buying a family plan, which will reduce costs all around. Depending on your income you may also be eligible for a state subsidized plan. In California, for instance, there is LifeLine, which offers free phones and plans to those who qualify.

21. Curb Impulse Buying

Pay bills before buying fun stuff. Also, set a certain number of hours as the waiting period before making a purchase. Don’t get swayed by flash sales either. As tempting as the savings may be, it’s best to buy when you know you have the cash so the balance doesn’t accrue interest on a credit card. In fact, having online shopping is dangerous for this reason alone – it’s so accessible.

However, if you set a 24-hour wait period (48 hours is best), you can keep the item in your cart and deliberate on whether or not you really need it. It could be money you can stash away when you really do.

22. Lower Your Energy Usage and Utility Bills

Buy energy-saving LED bulbs and make sure you only have the lights on in rooms people are occupying. Lower your water heater settings a notch or use a smart thermostat, and use cold water as much as possible to conserve energy. Unplug devices when they are not in use, and buy energy-efficient appliances. Check the insulation around windows and doors, to make sure there are no leaks. Change air filters and service your HVAC system regularly. Taking shorter showers and use a ceiling fan instead of air conditioning in summer to reduce expenses.

23. Move Closer to Work

If you have to work in the office, consider how much you’re paying in gas and wear-and-tear of your vehicle and tires as well as more frequent oil changes. Maybe it’s time to move closer, especially if you anticipate staying at that job for years.

24. Find Inexpensive Hobbies

Instead of joining the country club, collecting or skiing, how about some less expensive hobbies, like hiking, gardening, reading, writing or meditation. A library card at your local library is free!