Once you enter your retirement years, you will probably face a fixed monthly budget. Hopefully you’ve spent years preparing for retirement, so that you can enjoy a comfortable income. Even so, you might find that your budget doesn’t cover the lifestyle you had anticipated. If this happens to you, it could be because you’ve fallen victim to some of these common budget traps.
High fees. Banks and credit card companies make a lot of money from hidden fees. Even “free” accounts will sometimes charge you for writing too many checks, failing to charge a specific amount, failing to maintain a certain balance, or making other “mistakes” which shouldn’t cost you money. Check your account statements carefully, and complain about unreasonable charges. You can often get these charges removed. If not, consider switching banks or credit card companies. Just remember to investigate the new bank’s policies first, so you don’t trade one bad apple for another.
High interest rates. It’s so easy to swipe a card and walk away with an impulse purchase that many of us rack up high credit card balances. But remember that once you had months or years of interest, that great deal isn’t looking so terrific anymore. Don’t charge more than you can pay off each month, and come up with a plan to pay down those high balances. Maintain a good credit rating so that you can switch to a lower-interest card.
Unnecessary subscriptions. While you’re checking those credit card or checking account statements, look out for monthly subscription charges. We often sign up for various monthly services, thinking a few dollars per month sounds reasonable. But if you’re no longer reading those magazines or using that video service, the money is wasted and the charges are hurting your monthly budget.
Utility bills. At least once per year, shop around to see if you can get a better deal on your phone, internet, and cable bills. Ask yourself if you really use all of those movie channels. Consider bundling services to save money. Try out a prepaid cell phone plan, which can cost about half the amount of a contract phone plan (and the service is usually just as good). Many people throw away large sums of money on entertainment-based utilities that they don’t really use.