Many Americans live on a fixed income when they retire, but staying frugal doesn’t mean you have to make sacrifices and much as it means making savvy financial choices. Considering the average retired worker earns an estimated $1,872 a month from Social Security in 2024, many retirees have to live frugally to make ends meet. Even those who have other sources of income might still strive to keep costs low by cutting out unnecessary or expensive purchases and hobbies.
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According to a report from the Social Security Administration (SSA), approximately half of Americans aged 65 and older rely on Social Security benefits for half of their total monthly income. Another quarter relies on those benefits to make up a staggering 90% of their monthly income.
If you’re retiring on a tight budget, consider avoiding these 10 things that frugal retirees don’t waste money on.
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Boats
There may be no more of a cliche retirement purchase than buying a boat once you leave the workforce. Something about heading to sea has its lure and luster, but the hidden costs that come with such a big purchase will make it hard to keep your finances afloat. Buying a boat for $90,000 and only using it once a month is quite a big expense to swallow if you are living off of Social Security.
Resort Living
Yes, resort living is a luxury, but it may also be a financial money pit from which you cannot escape. Fine dining, housekeeping, valet and concierge services are all lovely amenities, but not necessities when it comes to sticking to a budget. It’s best to keep these stays for vacations rather than living accommodations to avoid both high costs and a bit of redundancy.
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Dream House
Buying your dream home may seem like the perfect retirement plan, but living beneath your means will help you stretch your benefits much further. Instead of building an expensive house where you can incur unexpected contracting costs or property taxes, staying in a home you’ve already paid off paints a prettier financial picture.
Excessive Dining Out
In the U.S., the average cost of a single meal at an inexpensive restaurant is reportedly about $20. A meal at a mid-range restaurant is about $35-$40.
While even frugal retirees still go out to eat on occasion, they’re more likely to cut back on dining out and stick to planning and cooking meals at home. Not only can they save money this way, but they also get more control over what — and how much — they eat.
To put this into further context, data from the U.S. Bureau of Labor Statistics shows that the average American consumer (all ages) spent about $9,985 on food in 2023. This includes $6,053 on food at home ($504 monthly) and $3,933 on food away from home ($328 monthly).
While frugal retirees will still have to make up for some of the “food away from home” expenses with their grocery bill, eating at home can cut costs down substantially.
Costly Hobbies
Some hobbies are much more expensive than others. For example, GOGO Charters estimates that the average cost of a one-week U.S. vacation is $1,984 per person. Overseas trips can be much more expensive, especially if there aren’t any direct or budget-friendly flights available.
It’s not just travel, though. Many frugal retirees will also avoid hobbies and interests that come with ongoing or excessive costs. Whether that’s skiing or photography, if the money required is on the higher side, they’ll often stick with cheaper options. Or they’ll find ways to keep costs low, such as by borrowing equipment or using what they already have.
Impulsive Online Purchases
A Capital One Shopping survey from May 2024 found that the average American consumer spends roughly $282 a month on impulse buys. That’s about $3,384 a year. For retirees who are trying to keep to a tight budget, this is simply too much.
Of course, that’s not to say that frugal retirees are totally immune to impulse purchases. It’s also not necessarily a bad thing to treat yourself every now and then. The problem comes from making frequent impulsive purchases. Even if each one seems relatively small, they can quickly add up to hundreds or even thousands of dollars.
High-End or Designer Clothes
Dressing well or replacing tattered old clothes that no longer fit is one thing. Spending a ton on designer apparel is another.
For many frugal-minded individuals, including retirees, this is one area that’s generally avoided. After all, spending $500 or more on a Versace T-shirt isn’t very feasible when income is limited or when you’re trying to ensure you’re leaving behind a substantial inheritance for your loved ones.
Many retirees will stick with more affordable brands, including non-name-brand options, to save money.
Home Upgrades
In February 2024, Fannie Mae reported that roughly 80% of Americans aged 60 and up own their home. But that doesn’t mean those same Americans want to spend a ton on maintenance, repairs and upgrades. Homeownership already comes with a whole host of other costs, including property taxes and insurance.
According to Angi, the average cost of renovating a home in 2024 falls somewhere between $19,526 and $87,972. That’s a hefty chunk of change for anyone, but especially frugal retirees. If a renovation can be avoided, chances are it will be.
High-End Electronics
There’s no real reason to discard old electronics when they already work perfectly well, especially for frugal retirees. Whether it’s a computer monitor, speakers or a television, if it’s getting on just fine, they’re more likely to stick with it until it’s not.
Electronics can easily run hundreds or thousands of dollars. Even a simple computer monitor starts at around $100. Higher-end models can be much more expensive than that.
Smart TVs are also on the pricey side. At Best Buy, for example, you can find them for anywhere from $1,000 to over $3,000. Unless it’s seriously time for an upgrade, it’s often simply not worth the cost.
New Vehicles or Fancy Cars
Like many other adults, retirees often need a vehicle to get around. But that doesn’t mean they’re spending tens of thousands of dollars on a new car every few years.
AutoInsurance.com reports that, on average, the majority of people stop driving at 85. If you retire at 70, you’ll still have about 15 more years of driving left.
While it might make financial — and practical — sense to get a new (or lightly used) vehicle in your 50s or 60s after retiring, it’s generally better for your wallet if you stick with the current model. The exception, of course, is if it no longer runs or has major safety issues.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 10 Things Frugal Retirees Never Waste Money On
