How Living Frugally Earned Us a Comfortable Retirement Where Prices Are High
States like Florida and Arizona have long been hot spots for retirement, due in large part to the warm weather.
However, that doesn’t necessarily make them retiree-friendly. Cost of living can be high in these popular, sunny locales.
Money pro and Smart Money Squad member Paul Vachon shared why he’s one of the many Americans who plans to settle down in Arizona and how he’s making it happen despite cost of living being on the rise.
One of the best perks of living in Phoenix is the weather: beautiful blue skies and warm sunny days. We love taking walks and enjoy outdoor activities, so the mild climate is an added bonus for us. it’s also one of the main reasons we are planning on retiring here.
In fact, according to a recent GOBankingRates Study, if you live in Phoenix you can expect sunny days 85 percent of the year with an annual average temperature of 76 degrees. Phoenix’s mild climate is a major reason it is a top destination for retirees.
Read More: Our Road to Retirement: Driving the US to Find the Best Places to Retire
Cost of living is another factor the study took a look at — an important consideration in deciding where to retire. I was surprised to learn our hometown of Phoenix has a cost of living index of 113 and the average annual expenditures for people 56 and older are $55,982. Midland-Odessa is right at the median cost of living for the U.S. at $49,542 in expected annual expenditures.
Even with the higher cost of living, we are still looking forward to a comfortable retirement in Phoenix. Here is how we’ve made a frugal lifestyle work for us and how you can too, especially if you’re considering settling down in the Southwest.
More on Retiring: How Much You Need to Live Comfortably in 50 Major US Cities
Smart Shopping
Buying quality items for the best price has always been a mantra of mine, as quality items tend to last longer and save money over time. Finding which products perform best can be a challenge, so that’s why we turn to sites like Consumer Reports for their product reviews and ratings. We like using the reviews to narrow our search down to a couple models before heading to the store to check them out in person.
I love a good deal, and finding the best prices has gotten much easier with apps like ShopSavvy that let you compare local prices on your smartphone with a quick scan of a barcode. Recently, I was able to get a better deal on software at BestBuy by using the app to request a price match from the salesperson. Many stores will price match, so it always pays to ask.
By doing a little research before making the decision to buy, I feel we have purchased better quality products and saved money at the same time.
Avoiding Expensive Credit Helps Us Live Within Our Means
Avoiding the use of credit cards to finance purchases has helped us control our spending habits. We choose to pay cash or take advantage of zero- or low-interest financing when making major purchases. Another benefit of paying cash is that it automatically keeps us from overspending. If we can’t afford to pay cash for the item, we set up a savings goal so that we can purchase the item without using credit.
Recently, we purchased a 2018 Honda Civic EX and were able to take advantage of manufacturer financing with a low rate of 1.9 percent. We were also able to negotiate a great price because we brought a copy of the dealer invoice with us.
DIY Is a Family Tradition That Saves Me Money
I enjoy fixing things around the house and have tackled many DIY projects over the years. I learned those skills by working alongside my father as a young boy on repair projects at our home in the suburbs just outside of Pittsburgh. I didn’t realize it at the time, but when I was helping my Dad replace spark plugs on the family station wagon or helping to lay tile in the basement, I was learning skills that I would use later in life and that would ultimately save me thousands of dollars.
Today, one of my vehicles is a 2001 F150 and by doing many of the repairs myself, I estimate I have saved several thousand dollars over the years. This past summer, I replaced the entire front suspension and saved around $1,500 by doing the repair myself.
We recently installed wood flooring in our home and saved thousands by doing the work ourselves. The key is to start with projects that are the right match for your skill level — and don’t be afraid to call in the experts, if needed.
Learn: 20 Home Renovations You Can Make for $1K or Less
Making Savings a Priority Has Made All the Difference
Living frugally has allowed us to save money over the years and we have used these savings to add to our retirement fund. In fact, it is these savings that are playing a large part in my plan to retire early. For example, I recently received a substantial salary increase, and rather than spending the money, I am investing it in a Roth IRA. The more you make savings automatic, the easier it will be to develop a saving mindset.
Making smart purchases, paying cash when possible, and tackling home repair projects ourselves has enriched our lives in many ways. It’s also pretty sweet when you see your savings add up.
Click through to read more about how much people have saved for retirement by state.
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This article originally appeared on GOBankingRates.com: How Living Frugally Earned Us a Comfortable Retirement Where Prices Are High
