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Getting by on Less

Ron Wayne

I LEARNED TO LIVE a lot more cheaply after I lost my job at age 58—and that’s allowed me to retire with a less-than-average income.

After getting laid off, I spent 18 months searching unsuccessfully for a position that reflected my experience and education. I ended up taking an administrative office job at 40% less pay.

Although I was already a thrifty and cautious person, my life became a lot leaner for the next four years, until I retired at 64. Here’s how I coped:

Housing. Living by myself in a two-bedroom condo, I decided to take in a roommate. I didn’t really want to be sharing living space in my 60s, but my roommate’s rent helped a lot over the next three years.

Transportation. I took advantage of free bus passes subsidized by my employer for my work commute, thereby saving on parking and gas. I had to get up extra early—and get home late—to catch the bus on my route, but it helped to preserve my paid-off 2007 car.

Medical. For many years, I’ve had a CareCredit card to pay for extraordinary medical or dental expenses. I’ve always made sure to pay it off before any interest accrued. I’ve also tried to stay healthy through diet and exercise.

Groceries and household items. I planned all my meals and shopped prudently for groceries, going to several stores each week. I took lunch to work every day except on paydays. I also discovered that most of the household items you can buy at dollar stores are just as good, or almost as good, as those at higher-cost stores.

Vacations. I went away for a couple of long weekends each year to places within easy driving distance. I usually stayed with friends or family.

Entertainment. I never had anything more than truly basic cable, even when I was making more money. No CNN, Weather Channel, MSNBC. But I soon cut the cable entirely, and did so earlier than most people. Also, I rarely went to restaurants, bars, movies, concerts or plays.

Clothing and gifts. I’m a huge fan of off-price stores such as T.J. Maxx, Marshalls and Ross. I haven’t paid full retail prices in many years. And you might be surprised at the nice items, and even new things, that you can find at thrift stores.

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When my employer offered a modest incentive to retire early to reduce expenses during the pandemic, I was happy to leave. I’d determined that my Social Security and state pension would almost equal my take-home pay. Both checks are heavily based on my earlier years in the workforce, when I had a much higher salary.

In my first year of retirement, I have—mostly—been able to live even more cheaply:

  • I have more time to plan and cook homemade meals, so I no longer rely on frozen fare as often. I also see the value in making larger meals and freezing portions. I wrote about cooking in retirement for Medium.
  • I can wear pretty much the same clothes all the time, so I’m not buying much new.
  • For entertainment, I subscribe to five streaming channels and still pay less than my previous cable bill.
  • I no longer have a roommate. Some good news: My condo’s value is finally showing some decent price appreciation.
  • Unfortunately, I felt the need to buy a newer car, as I wrote about back in October. That means I now have a car payment, but I also have a more reliable vehicle. In retirement, I have the time for long road trips, instead of flying and renting a vehicle. And I’m thinking of camping more often on trips because the Honda Fit can be adapted for sleeping. Most important, in these days of shocking gas pump prices, it gets 33 mpg in the city and 40 on the highway.
  • As my retirement has been entirely during the pandemic, I got used to eating almost all my meals at home. I could never live on my income if I went out to restaurants as often as most people do. When I did go out to eat a few times earlier last year, I could never finish my portions. Not only do I save a lot of money by rarely eating out, I’m also saving calories, too.
  • I have to pay a lot more for medical insurance. My old employer’s subsidized coverage cost me just $50 a month. But my Medicare Part B climbs to $170.10 a month in 2022. I chose a Medicare Advantage plan when I turned 65 last summer, which has no premium. So far, coverage has been okay. I took advantage of the one-time opportunity to transfer part of my IRA into a health savings account without tax penalty. Fidelity Investments provides a convenient debit card linked to this account.

Inflation, of course, makes my low-cost retirement more challenging. That’s why I write a Medium blog and freelance for HumbleDollar and other sites. I don’t expect big windfalls, but it’s nice to have extra pocket money.

Ron Wayne spent 26 years working for newspapers in Pennsylvania and Georgia before becoming the editor in the University of Florida’s main news office. During his 10 years working there, he earned his master’s degree in mass communication and taught as an adjunct in the College of Journalism and Communications. Since retiring last fall, he’s enjoyed a simple life, including reflecting on his experiences on Medium.com. Check out Ron’s earlier articles.

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R T
R T
6 days ago

I have just discovered this website and it’s just great! I love how candid and detailed the articles and comments are. I’m nearing retirement and generic advice in the typical articles you read online or even in books is just not enough at this point. How I got here is – I saw R. Wayne’s “I learned to live more cheaply…” article reposted on yahoo news (from MarketWatch) with a reference to the original article on Humbledollar.

On the MarketWatch posting one of the readers discussed his own situation. Laid off at age 52 from a 175K managerial job in IT. He was unable to find a new position. Severance (200K) and unemployment ran out. They refinanced the house to reduce the mortgage payment and relied on his wife’s PT job for insurance. He got a job at a Home Depot store for 5 years. Then at age 59 he got a $20/hr help desk job.

He ended the comment on a happy note. Now he is 62 and things are comfortable. He sold his stock in Home Depot to buy a Mercedes convertible and has started traveling.

This has been in my head for two days now.
1) I could see myself being laid off short of retirement but less marketable because I’m also in a technical manager role with high seniority. We do have a 6 months emergency fund and 1yr plus severance with an insurance allowance is standard. But am I really ready if there’s a gap in timing?…More research and planning is on deck.

2) Am I the only one that feels like he shouldn’t have sold his stock to buy the convertible? Has he really learned the lesson from his surprising strife from the last 10 years?

Jonathan Clements
Admin
Jonathan Clements
6 days ago
Reply to  R T

I’m with you: I wouldn’t have bought the convertible given that his financial situation sounds perilous. But maybe he and his wife have more money than the brief description suggests.

David G
David G
7 days ago

You said you once had a renter but no longer. If you’re looking for occasional side money, consider renting out that room occasionally as an airbnb rental. I do that with a room in my house which has access to its own private bathroom and private outside access when they want without every having to come over to my side of the living area. If your condo is set that way, and if you’re only interested in occasional money on a monthly basis, just open it up for a rental for one or two weekends. That’s why I like it, I can set or block dates, control how much I charge, and choose who decides to rent it for a night or two based on their reviews from other hosts.

Ronald Wayne
Ronald Wayne
7 days ago
Reply to  David G

Great idea! The only issue is that the condo has just one bathroom, and I’m just too old to be sharing one any longer.

Mathew Thomas
Mathew Thomas
8 days ago

Its so hard to live below your means. Living paycheck to paycheck hurts. Why does it feel like all that one is doing is paying credit cards and mortgage, college tuitions. it sucks that I saved over $2 million in my 401K but cant touch it until I am 65. I feel that all I do is pay bills and will never be able to spend the money when I retire.

Ben Mealey
Ben Mealey
3 days ago
Reply to  Mathew Thomas

Hi Matt, you might be interested in a 401k 72t.

Ronald Wayne
Ronald Wayne
8 days ago
Reply to  Mathew Thomas

Sounds like a secure retirement is ahead of you! Congrats!

rayanmiller6303
rayanmiller6303
10 days ago

I just turned 58 really like my job but could easily have retired a year ago if it wasn’t for how much we like to eat and drink out. MINT reminds me each month how much we spend on this.

Ronald Wayne
Ronald Wayne
8 days ago

Whenever I do splurge on take-out as I did with some gift cards recently, I continue to be surprised at the portions and how much salt is used. I had Mongolian Beef from PF Chang’s and it was super salty. It takes effort and time, but making your own meals is so much healthier.

corrupt
corrupt
12 days ago

I wasn’t laid off, but I did go to half time for a year, and quarter time for a year before retirement. It definitely helped me adjust to spending less before I was forced to.

NGA nguyen
NGA nguyen
12 days ago

Hello, can you use the fund from Health Savings Account to pay for health care monthly premium such as Medicare Part G plan? Also, how much can a person transfer part of your IRA to HSA? Is there a limit amount that is allowed?

wtfwjtd
wtfwjtd
11 days ago
Reply to  NGA nguyen

HSA money can be used to pay for Medicare Part B premiums, but not Medigap premiums. The maximum allowable transfer from an IRA to HSA is whatever your plan’s limit for the year is, depending on if it’s a family plan or self-only plan. This can only be done once, and when done counts towards that year’s contribution limits.

evan rayers
evan rayers
13 days ago

If your electrically inclined (Utube it) a roku express device plugged into HDTV’s of any sort accepting HDMI inputs provides near 100channels. Free, no monthly charge for basic.

Luckily I know a bit about autos, rebuilding them from the crankshaft@14.
I despise auto payments & insurance. A new car to me is a 2010, or older!
I had takeout food in the 80s. Paying X2+ for nourishment I find wasteful.

I like your blog!
Good luck & best wishes…

Ronald Wayne
Ronald Wayne
11 days ago
Reply to  evan rayers

thanks!

Mik Cajon
Mik Cajon
13 days ago

I’m glad to read you ditched the cable news…seems like a waste of money to be told how to think and live…happiness is a choice.

kristinehayes2014
kristinehayes2014
13 days ago

Congratulations on your retirement. I have taken advantage of many of the same frugal living tips you list in your article. My husband and I rarely eat out. We buy most of our clothing at Costco. I’ve become a pro at taking advantage of free, or low cost, introductory subscriptions to streaming services. I pay nothing, or a minimal price, for the first month or two and then cancel before the service reverts to the regular price. We’ve enjoyed binging many excellent tv series using this strategy.

I admit to actually enjoying trying to live as frugally as possible. It’s a bit of a game at this point.

Ronald Wayne
Ronald Wayne
11 days ago

Indeed. I look at my budget as a challenge! I love getting bargains!

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