Doing more with less has never been so enjoyable.
That’s all, folks. For those of us over sixty, the dream of an easy retirement is now officially deader than a doornail.
According to the Pew Research Center, two thirds of us are having to say farewell to the lifestyle we’d hoped to have at this stage of our lives, as we’re already falling behind financially. And, the Fidelity Investments company paints an even worse picture — according to them, half of us aren’t even on track to afford basic expenses later in life.
Blame the decline of pensions, the errors of the other political party, the economy, bad luck or ourselves, but it doesn’t change our bank account balances. At this stage, there is only forward. And the good news is there are a number of ways we can do more with what we have. They all fall into the tried-and-true bucket of earn more and spend less, but in this case — with a creative twist.
Earn more
You don’t need to take on the stress of a full-time job to gain a massive financial edge from a little extra income. Remember, it’s not just the amount of the paycheck that’s working for you. If you earn a dollar, you are also saving a dollar that would have come out of your retirement plan. Hold onto that saved dollar for 9 years and by the magic of compounding, at an 8% growth rate that dollar becomes two. So, one dollar is actually worth three in the context of your retirement plan. And, if you haven’t already claimed Social Security, generally, the longer you can delay the better it will be for you in the long run. Can we say win-win-win-win?
1. Keep working — but on your own terms
If this feels like familiar advice, here’s the creative part. Sure you can apply to become a Wal-Mart greeter, but even better, you can have the best of both worlds with income and freedom offered by freelancing — or even starting a small business — based on your unique experiences and knowledge. There is an unprecedented boom in freelance work, driven by a shrinking skilled workforce, websites that cater to independent workers, and a boom in entrepreneurialism. As a bonus beyond just the extra cash, many people find they truly enjoy the ability to be challenged, rediscover their creative passion and make an impact, while being their own boss.
> Check out Moxy Marketplace to read more about this trend and eLance-Odesk to see what the brave new world of online freelancing looks like.
2. Tap your home
For those of us who occasionally kick ourselves for not saving more, it’s only fair that we also pat ourselves on the back for the decision to buy our home. Ninety percent of our age group owns property, and this gives us lots of creative options to get more money. Certainly, we can employ standard tactics like downsizing, but these days we can also list an empty room on Airbnb, earning money and keeping life interesting by meeting new people from distant places. And then there is the reverse mortgage option, which can turn home equity into a persistent paycheck or an emergency fund, while eliminating monthly mortgage payments at the same time. While these loans aren’t the right choice for everyone, for some of us they’re like suddenly discovering we have extra gas in the retirement tank.
> Check out Airbnb to see how much you could earn sharing your home and the Reverse Mortgage Calculator to estimate how much cash you could access from your house.
Save more
With all due respect to Benjamin Franklin, as we mentioned earlier, a penny saved is more like two pennies earned, once compound growth is applied. In fact, the math is even a little better than that because money saved isn’t taxed. But if the idea of saving brings to mind dreary images of grocery store circulars, senior discounts and setting the heater to permanent indoor sweater weather, take heart. Your creativity can come into play in a big way here too.
3. Prioritize experiences
There is now extensive research to show that money only buys happiness up to a point. Once a certain level of financial security is reached, more money does not increase our happiness. We’ve all experienced this — the rush that comes with shiny new possessions fades nearly as fast as the high from a glazed donut, whereas experiences result in lasting satisfaction. So consider doing things more often than buying things. Make it easy on yourself by skipping the mall and unsubscribing from catalogs. It’s easy to think you deserve a new purse or power tool, but what you deserve even more is freedom from financial anxiety. Instead, spend time taking classes that stimulate your brain and doing activities that stimulate your muscles. Whether you enjoy painting or biking or gardening, fishing or knitting, you will get more happiness from experiences than from goodies. Similarly, gifts of time at the playground, pulling weeds for a friend or a homemade dinner usually provide both us and those we care about greater, lasting happiness than expensive gifts.
> Check out Entrepreneur to read more about the positive impacts of experiences over material goods.
4. Travel smart
With the concept of experiences in mind, travel is often one of the most nourishing. But you don’t need to go far to reap the benefits — there are a wealth of places within an easy drive of your home if you get a little creative. Maybe it’s the local history museum, state park or lighthouse. Maybe it’s a motorcycle rally or craft fair or diner with the best patty melt in three counties. If you do decide to go farther afield, consider taking the time to carefully research airline fares. Traveling off-peak, via regional airports and with less well known airlines can often result in half-price fares and occasionally quarter-price fares. And beat those extra fees by packing light bringing your own food on the plane. As for where to stay, if friends and family aren’t a good option, check prices for rentals such as AirBnB against expensive hotels. Even better, consider a housing swap where you and another traveler agree to switch houses over the same time period.
> Check out the TravelChannel for more travel tips and Home Exchange to see if housing swaps are viable in your area.
5. Stay healthy
There are plenty of good reasons to prioritize your health, but in case you needed another nudge, your finances will thank you for it too. Studies show that unexpected medical expenses are our number one financial fear — for good reason. The good news is much of our health is within our control, as are the benefits of investing in our health, even bit by bit, stack up like a bodily version of compound interest. Every walk around the neighborhood, healthy meal and extra hour of sleep you add to your life will mean fewer prescription drugs and hospital visits you’ll need to pay for over your lifetime. Not only will you be more physically able to make the most of life, you’ll have more money to enrich your lifestyle.
> Check out this UK National Health Service article on tips to improve your health.
