As you settle into retirement, you think you’ve got all your retirement planning in place, right?  You’ve got your 401k and IRA accounts perking along just fine.  But what about your retirement spending plan?

No matter the extent of your retirement financial resources, it’s also wise to develop a strategy for downsizing your day-to-day spending habits now that you’re not earning a salary.  That’s where your retirement spending plan comes in.

We turned to best-selling author and financial ace Suze Orman for some user-friendly and (practically) painless recommendations for controlling your spending in retirement.

“The less you spend today, the less you will need to support yourself tomorrow,” Orman says. And reducing your spending to a “doable” level can help you find funds to help you ease into a retirement state of mind—paying off credit cards, bumping up your monthly payments to shorten the time on your mortgage and finding the right long-term care insurance coverage.

In a nutshell, here are Orman’s three rules for “making more of your money by spending less.”

  1. Live below your means but within your needs. What? Simply stated, “spend what you need, not what you can afford.” This idea works, not only for day-to-day expenditures, but for big purchases (like a new car), as well. Maybe you can afford the high payment, but why not find a car that meets your needs that you can pay off sooner? Who wants to spend their retirement making car payments? And don’t forget that high-end luxury car comes with high-end maintenance costs!
  1. Test your spending: is this a real need or just a want? Although this may appear to be a “no-fun” rule, Orman illustrates with real-live experiences. “A want is eating out at a restaurant. A need is buying food at a grocery store. A want is a short vacation trip. A need is buying medicine at a pharmacy,” she states. Got it? Orman suggests just trying it for a few months to find out how much money you can
  1. Learn how to get as much pleasure in saving as you do out of spending. Another miserly ploy? Not at all! “Saving money is not an act of denying yourself,” says Orman. “It’s how you can bring more confidence and calm into your life because you’re not overextended. Celebrate your savings!”

Here are some more ways to reduce the cost of retirement without sacrificing your quality of life:


Reduce your housing costs: Moving into a less expensive home can significantly reduce your retirement expenses. You can go from four bedrooms to two, or move to an area with a lower cost of living and lower taxes. Find a place with a smaller yard (or no yard) so your lawn maintenance costs are lower.

“Downsizing can have a tremendous impact on cost savings during retirement,” says Eric Bailey, founder and CEO of Bailey Wealth Advisors in Silver Spring, Maryland. Utility bills are generally lower in homes that are smaller and in better climates where you don’t have to spend a lot of money to keep your home heated.

Sell a vehicle. Your household may no longer need two vehicles once you don’t need to commute to work. Getting rid of one vehicle can reduce your costs for gas, maintenance and auto insurance. In a community with good public transportation options you may even be able to get by without a car.

Be more energy-efficient. You may be able to reduce your retirement expenses and help the environment at the same time! Installing solar panels, automatic lights and smart thermostats could help minimize your energy costs throughout retirement.

If you are planning to move in retirement, “One way to cut costs immediately when you downsize is to look for an eco-friendly or green home,” says Jordan Sowhangar, a wealth advisor at Girard in Souderton, Pennsylvania.

Also, look for more energy-efficient appliances, including your refrigerator, washer and dryer. “By and large, you can cut utility costs by 20% with new, higher-efficiency products,” Bailey says.

Shop for lower-cost services. Many people stick with the same service provider for years because it’s too much of a hassle to quit. Now that you have some time on your hands, spend a few hours looking for a better value.  It could save you hundreds or thousands of dollars annually.  Look for less expensive options for cable, telephone and internet services.

Consider whether your Medicare prescription drug plan or Medicare supplement plan is the best priced for your situation. Think about refinancing your mortgage, finding more affordable auto insurance and shopping around for lower-cost bank accounts or investment company fees.

Use senior discounts. If you’re willing to admit your age, you may qualify for a senior discount on many of your purchases. “Don’t shy away from saying your age,” Sowhangar says. “Senior citizen discounts are everywhere – restaurants, travel places, clothing stores, hotels and movie theaters. My mom shops at a certain grocery story because there is a senior citizen discount. Brag about your age.” Some senior discounts are not widely publicized and may only be available to those who ask.

By creating a retirement spending plan and downsizing your expenses, you will have more money to enjoy your retirement. You can use your savings to boost your bank account, or put it aside for a vacation, a night on the town, or to support your retirement hobby.  Sounds like a pretty sweet deal!