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living beneath your means

An Essential Life Skill for Retirees

by Norma Jackson Goldman


For more information about the Board of Retirement, call (877) 767-7738.


WE'VE ALL HEARD STORIES about people who “live above their means,” which is a polite way of saying they spend more than they earn. This practice is widespread in America today, with the average person spending $1.20 for every dollar earned. This pattern of behavior results in massive debt.

As people age, they fall naturally into a pattern of living that doesn’t vary a great deal. For example, they eat the same food week by week, dine out at the same frequency, spend the same on clothing, and their driving habits (gas consumption) are pretty much the same. These habits paint a picture of predictable spending. This is true for most people, regardless of income.

Those blessed with good spending habits usually are not found among those who live above their means. In contrast, they have learned to routinely spend less than they earn. It is their habit to save and/or invest, and over time they build up a cash reserve for emergencies (which occur with alarming regularity).

Others, who do not have good spending habits, or who ignored the good advice of godly parents and teachers, find themselves in debt, struggling financially. Learning to adjust your lifestyle to fit your income is not a skill that comes without struggle—trial and error—but it is one of the most valuable life skills a person can learn. In retirement, this skill becomes even more essential. The following principles will help anyone develop this skill.

(1) Create a written spending plan.

Creating and living by a written spending plan (a budget) is a proven formula for financial success. It allows you to measure those predictable expenditures against available income, urging you to make needed changes to reach the financial objective of spending less than you earn. Spur of the moment temptations will be easier to dismiss, because you’ve already determined how money will be spent. Whatever the plan, at least 10% of your total income must remain unspent, set aside for future needs.

(2) Practice the art of saying “not now.”

Saying no to a purchase today doesn’t mean you’ll never be able to buy that item; it just means the merchandise will have to wait until it fits into your spending plan. Missing a trip with friends or an extra night at your favorite restaurant doesn’t mean you won’t be able to enjoy that activity later. It only means you will have peace of mind when some unforeseen emergency arrives, because you saved today.

(3) Make a habit of reviewing priorities.

A careful spending plan establishes priorities—what comes first, what comes next, and so on as you allocate dollars to giving, living expenses, and saving for the future. Review those priorities often because your needs will change during retirement. Escalating costs (who ever imagined gasoline would cost more than three dollars a gallon), a rise in taxes, and increased medical expenses are common examples of how spending allocations change over time.

(4) Re-think housing needs.

Many retirees discover that caring for a large house and yard is a significant challenge in light of health issues. Paying someone else to do the upkeep is often cost prohibitive. It doesn’t make good economic sense to keep a big house for the 2-3 times each year when your children visit. A two-story house may wreak havoc on knees and hips in future years! It may be time to purchase a smaller place.

Following these simple principles will go a long way toward reducing living expenses, creating the financial cushion needed for future expenses, and insuring that you are living well beneath your means!


About the Writer: Former magazine editor Norma Goldman enjoys a free-lance writing career in her retirement. She lives in Nashville, TN.
For more information about the Board of Retirement, call (877) 767-7738.


©2007 ONE Magazine, National Association of Free Will Baptists