Giving up the daily grind for retirement means a complete change in lifestyle. This means that how you spend your money will change too: for instance, you’ll need less money for work-related expenses like commuting or work clothes but you’ll need more money for the things you finally have the time to do, like hobbies or travelling. If you’re smart, you’ll carefully budget your retirement income so that you can live the post-work life you’ve always wanted. Here are 20 tips for budgeting in retirement.

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Know your income
As with any budget, your retirement budget depends on how much money you actually have. Make a list of all your sources of income during retirement, including pension and investments, to get an idea of what you can spend. If you’ve started planning early enough, you’ll be able to retire with less money.

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Know your essential monthly expenses
Your essential expenses are the things you pay for that you can’t do without. These include housing, food and utilities. Once you know how much you spend on essentials, it will be easier to see where to cut costs.
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Cut your grocery bills
There are many ways to save on groceries. For instance, you can save money by buying in bulk, by buying fresh from the market, by being on the lookout for special offers and by using coupons. Here are some more easy ways to save $20 this month.

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Save on utilities
Reducing your utility bills can make quite a dent in your essential monthly expenses. Ways to do this include changing to energy-saving appliances and light bulbs, weatherproofing your home so you’ll spend less on heating and cooling, and learning habits that will use less water and energy.
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Downscale your home
Another way to save is to reduce your housing costs. Now that you’re retired, you probably don’t need that big house with its expensive upkeep. Consider selling it and moving into a smaller, less expensive condo or apartment.

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Earn income from your home
Another possibility is to make your home earn you an income, so you’ll have more money to spend on other things. Rent out rooms to lodgers, for example, or list your house on a site like Airbnb and rent it out when you’re travelling.
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Relocate
Now that you’re not bound by work obligations, you have the freedom to live wherever you want. If you relocate to a cheaper city or even one of the many cheap global retirement spots, you can make your retirement money last much, much longer.

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Know your required non-monthly expenses
Non-monthly expenses are those things you pay for once or twice a year. These include property taxes, your car registration and insurance premiums. Once you’re worked out how much these will be, divide the costs by 12 so that you know how much to set aside every month to save up for them.
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Consider how you will spend your time
When the bulk of your day isn’t taken up by work anymore, you’ll find other ways to spend your time. These will change your spending habits too, so you need to budget for your hobbies, extra travel, and so on. Just make sure you haven’t made any of the costly mistakes that can ruin your retirement.

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Don’t forget the tax man
Unfortunately retirement doesn’t rid you of your obligations to the tax man. Know what income is taxable and how much you’ll be required to pay and then factor these costs into your budget. It will also help to know the tax tips that will help save your nest egg.

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Remember healthcare costs
When you work out your budget, remember that your healthcare costs will now be higher. Your employer probably won’t contribute to your extended health insurance premiums anymore and as you get older, you’ll need to spend more money on treating those aches and pains too.
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Know your non-essential expenses
Non-essentials are those things you pay for that are nice to have but that you can actually live without. Keep the receipts every time you spend money and use them to work out how much you spend every month on things like take-out coffee. This will help you see where you can reduce costs but remember to be realistic and not fall for the ridiculous ways people try to save money.

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Cut your non-essential monthly expenses
You probably pay monthly bills for things that you don’t really need, such as gym memberships or comprehensive cellphone packages. Simply downgrading to a more basic package can save you quite a lot of money in the long run.
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Use an online budget calculator
An online budget calculator is a handy tool to help you keep track of your money during retirement. Several banks offer budget calculators on their websites or you can opt for this easy-to-use one from the Financial Consumer Agency of Canada.
Once you've got your budgeting down, here are some ways to make the most of a tight budget.
Once you've got your budgeting down, here are some ways to make the most of a tight budget.

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Have an emergency fund
One thing that shouldn’t change from your budget when you were still working full-time to your post-retirement budget is that you need to have an emergency fund. Set aside an amount of money every month for those unplanned expenses like emergency home repairs.

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Make money from your hobbies
One of the best ways to make your budget balance is to increase your income. Now that you don’t spend your days at work, you have more time for hobbies and these can earn you an income. Even if you don’t turn your love of knitting into a side business, selling some of your creations will pay for new yarn, so your hobby won’t cost you too much.
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Find a part-time job
There are some great jobs for retirees that will help you increase your income without taking too much of your time and energy. Working part time will also keep you mentally stimulated and help you adjust to post-work life.

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Use your seniors’ discounts
One of the best things about being older is that seniors can get discounts on everything from transport to movie tickets, restaurant meals and shopping. Find out which senior discounts are available in your area and don’t be too proud to use these.

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Travel in groups
You finally have time for that trip through Europe but can you afford it? Instead of making your own way around your destination, consider going on an organized tour, which often works out cheaper. You may even want to consider going on off-the-beaten-path cruises to save some money.

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Sell your junk
It’s amazing how much stuff you can accumulate over a lifetime. It’s also amazing how much some of your junk can be worth. Sell those surprisingly valuable things lying around your house and earn some extra money while getting rid of clutter.
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