Which Retirement Expenses Should You Never Cut Corners On?

Ralph
00:00:00

Are you worried about running out of money in retirement? Are you cutting corners on essentials just to make ends meet? Well today, we're getting into the retirement expenses you should never cut corners on. By the end of this episode, you'll learn how to secure a fulfilling and joyful retirement. We're going to cover essential expenses like healthcare, housing, utilities, nutrition, and even talk about giving.

Plus, I'm going to share some practical budgeting strategies and tools to help you manage your finances effectively. So stay tuned as we answer the question, which retirement expenses should you never cut corners on? You don't want to miss this one.

Podcast Announcer
00:00:37

In a world where crushing debt keeps you trapped, where living paycheck to paycheck has become your new normal, and where the dream of retirement seems impossibly out of reach, there's hope. Join financial evangelist Ralph Estep Jr. A man who's walked through the fire of financial failure and emerged stronger on the other side.

Welcome to Ask Ralph, the show where real world experience meets biblical truth to break the bondage of financial despair.

Get ready to take control of your money, break free from the financial stress and align your resources with God's purpose for your life. This is Ask Ralph with Ralph Estep Jr.

Ralph
00:01:14

Welcome to another episode of the Ask Ralph show, where we master your finances from a Christian perspective.

I just want to thank you for joining me today. Thank you for giving me some of your time. Now, if you missed yesterday's show, we talked about how to safeguard family wealth from the grip of slot machines. We talked all about gambling and the addiction and how that impacts both emotionally and financial for a family.

It's a must listen if you are concerned about gambling addiction, or if you know somebody that is going through that, you can check it out and as with all of our episodes at askralph.com. Now today's topic, we've got a listener question that really hit home for me. I work with a lot of retirees and it's about making smart decisions in retirement.
So let's get right to it.

This question today comes to us from a listener named Tammy, and this is what Tammy writes. She says, 'Ralph, I'm a retiree, and I'm always worried about running out of money. I've been cutting corners on everything, from healthcare to groceries.

But I'm starting to feel like I'm missing out on enjoying my retirement. My kids keep telling me to spend more, but I'm afraid of running out of funds. I've seen friends who live like misers and their beneficiaries just squandered away their money. I don't want that to happen to me. I want to enjoy my retirement, but also be wise with my finances.

Can you help me understand which expenses are worth prioritizing in retirement?' And it was signed. Thanks, Tammy. Well Tammy, thank you for reaching out. I truly appreciate your question and you're not alone feeling this way. Many retirees struggle with trying to balance their expenses and enjoying their golden years.

I just had this discussion yesterday with a client that came in for taxes. We were talking about how much she saved and she says, Ralph, you know, I'm so worried about, I'm not going to have enough money. And we sat and we talked about it, I said, there is a very good chance that you're never going to run out of money.

So today, we're going to explore which retirement expenses you should never cut corners on. This is the areas that you shouldn't be scrimping and being so frugal about. And by the end of this episode, you're going to have a clear understanding of how to manage your finances wisely and still enjoy the retirement that you worked so hard for.

So let's start by discussing what I consider the main components of your question Tammy. Tammy, you're worried about running out of money. I get it. That's a tough thing to consider and you've been cutting corners on essentials like healthcare and groceries because you see that as a way to save money.

And this is a common concern among retirees. I see this every day in my practice, but you've got to also remember, it's important to remember that cutting corners on certain expenses can have serious consequence. I'm going to talk about some of those on today's show. So we're going to talk about healthcare.

We're going to talk about housing. We're going to talk about utilities, nutrition, and giving Tammy, because those are all areas where I feel like you've got to prioritize your spending to ensure a fulfilling and secure retirement. And that's my goal for you. I want you to have both a secure and fulfilling retirement.

And Tammy, here's my big takeaway before we even get started. There is hope for you. I'm going to give you some concrete ways to overcome that fear and that anxiety of your situation and help you truly enjoy retirement.

So before we get into it, I just want to give you a quick reminder. If you've got a question about your finances or faith or something in between, just do me a favor and go to justaskralph.com. And I will feature your question on the show. Because the whole point of the Ask Ralph show is to answer your questions and to help you achieve financial freedom. And don't forget, every Tuesday at 1 PM eastern time, I go live with the show. You can join us by going to askralphpodcast.com/live. It's a great opportunity to interact with me, ask your questions in real time. You can join the chat. We've got a really good community growing over there.

Well Tammy, let's get into today's Bible verse. I found this one in the book of Proverbs, chapter 22:29, and it might seem a little off at first, but let me explain. This is what it says. "Do you see a man skilled in his work? He will stand before kings; he will not stand before obscure men." And you might be saying, Ralph, I don't get it today, but I feel like this verse really reminds us to prioritize excellence in all areas of our life. And Tammy, that's what I hear you saying. You want to have an excellent retirement.

You want to have a secure retirement. Well, that includes caring for our bodies and our finances. When we start to think about scrimping and saving on those type of things, we've got to relate back to that Bible verse and talk about that. And this verse directly relates to your question, Tammy, because here's the bottom line. By prioritizing essential expenses, those things that you really need to focus on, you're not just managing your finances. That's part of it. But the bigger thing you're doing is you're honoring God and living out His purpose for your life. And that's what we're all striving to do.

So today I am grateful for the wisdom and guidance God provides through His word.
That is really our rock. That is our center. That's the way we start our process. It reminds us about being excellent stewards of our resources that He's given us. And this wisdom helps us make informed decisions about our finances while still living, fulfilling lives. That's His goal for us. He wants us to be wise stewards, but He also wants us to live fulfilling lives.

Well, let's get to today's show. I want to share a story about one of my retired clients. We'll call him Mr. Johnson. You know I don't use real names. Well, let's just say his name is Mr. Johnson. Now, Mr. Johnson was one of these guys that always lived sort of a frugal life.

He was very careful with his money. He saved diligently while he was in his working years. He put that money away in retirement and he was so proud of his retirement savings. He would meet with some guys from church and they would go out to breakfast sometimes and he was always talking about how he started early and he saved and he really focused on the importance of that wise stewardship.

But then when he retired, he became increasingly worried about running out of money. He had worked so hard and he didn't get that the people around him didn't even have anywhere near the savings he had. But once he retired, he said, you know, he would say to me sometimes he say, Ralph, there's nothing else coming in.

I'm just so worried that I'm going to run out of money. So we started cutting corners on everything. He started cutting corners on healthcare. He started cutting corners on his groceries. He confided with me, said he would skip doctor's appointments to save on copays. And then when he'd go to the grocery store, he'd buy the cheapest food available.
Didn't matter about the nutritious value. He just wanted to make sure it was cheap. He had a home that was paid in full, but it became to, it started to fall into disrepair because he didn't want to spend money on maintenance. Truth to be told, he lived like a miser. He's always anxious about his finances.

Can you relate with that, Tammy? Can anybody else listen and relate to that? I know people in my life that act like this as well. So just one day, his daughter called me. They both were clients of mine and she was concerned about her father's lifestyle. She told me, Ralph, she says he's missing out on enjoying his retirement.

He worked so hard to set aside that money. He was so proud of it. But he's not enjoying his lifetime. His health is deteriorating because he's really being too cheap. He's not going to the doctor. He's not getting the medications that he needs. And she was very honest. She says, Ralph, I just don't want to lose him.

I want to spend more time with him in his golden years. And I said, all right, well, let me see what I can do. So the next time I met with him. I explained to him, I said, listen, your daughter is really concerned about you. And he was kind of taken aback by that. He says, what is she concerned about? You know, I'm fine, Ralph.

I'm fine. But I explained to him, Mr. Johnson, I think you're got your priorities a little bit askew. I think you got your priorities in the wrong places. And he was kind of taken aback at first, but I think he kind of wanted to have this discussion, but didn't know how to have it. So we discussed those healthcare expenses.

I'm going to talk a lot about this today. We talked about his housing expenses. We talked about utilities. We talked about nutrition. We talked about what he was eating. And we also talked about giving because as you know, I feel like that's a central core of what we should do. Just yesterday, this client I was talking about earlier, we're talking about how much he has in retirement.

She said something fascinating to me. She said, Ralph, one of the amazing things, and I had told her about doing this a couple of years ago. I said, as you're starting to take required minimum distributions, one of the things you could do is you could assign that directly to a charity. It's called a QCD. Qualified Charitable Distribution.

And we were just talking as she was leaving after getting her taxes done. And she says, Ralph, it's amazing. The more generous I'm getting, the better I feel. And it seems like my portfolio is growing. So when I talked to Mr. Johnson, we nailed down all those different areas and I showed him how cutting corners in these particular areas could have serious consequences.

And that's when he said to me, he said, Ralph, you're right. I've been skipping my annual checkups and I've noticed my health's a little bit shaky. It's starting to decline. He also mentioned that he had a leaky roof. He had some windows that had some drafts in them. But he was afraid to spend the money.

And he said to me sometime, he said, Ralph, I'm living on the cheap and unhealthy food is what I do just to save a few bucks. And I kind of delved in a little deeper. I said, well, Mr. Johnson, why are you living like that? I mean, you have a really good retirement nest egg. And he shared something. He said, I want to make sure I'm leaving something meaningful to my daughter.

And man, I heard him loud and clear when he said that. And I felt for him. I said, you know, I get it. Here's a guy that had worked so hard, but he wanted to give that something when he was gone to his daughter. And there's biblical, you know, it talks about in the Bible to leave your children's children in inheritance, but we needed to find a place of balance.

I'm going to talk a lot about balance today. So we created a budget. We created a budget that allowed him to cover these essential expenses while still enjoying retirement. And at first he was very hesitant. He said, Ralph, you know, I just don't know, you know, yeah, that the copays are expensive and I have this Medicare donut hole thing.

I've got supplemental insurance. And he went down the whole litany of things that most of my retirees talk about. But he begrudgingly sort of bought into the approach. And after just about four or five months, he came back to me and said, Ralph, he says, you were so right. I went to the doctor, she managed my medication some. I started taking medications again that I needed to take and his health improved. He said, Ralph, I'm starting to enjoy life again. I'm spending more time doing things that I really enjoy. And his daughter sent me an email. She says, Ralph, I don't know what you did, but man, my dad is a different person.

So his daughter was just absolutely thrilled with the transformations she saw. And if you think about it, if we step back and really look at Mr. Johnson from the outside. That pain he was feeling, that fear, that's real. But the problem was he was missing out on the joy of retirement because of this fear of running out of money.

He was living in constant anxiety. Are you listening to this? Are you living in that same anxiety? He was worried about whether he would have enough money to cover his basic needs, but he was neglecting his basic needs so that he was going to live a less prosperous life. He was going to live a shorter life.

But with that guidance and he embraced it, we had a well thought out plan. He was able to overcome this fear and live a more fulfilling retirement. And let me just tell you, Tammy, you can overcome this situation too. It's okay to be cautious. It's okay to be measured. All those things are fine with your finances, but you can't let fear dictate your decisions.
And by prioritizing these essential expenses, which I want to talk about next. You can enjoy your retirement while still securing your financial future. So Tammy, listen to me, there is hope for this and I've got a solution.

So let's talk about some action steps based on your major expenses.
I'm going to break down what I see your major expenses are and I'm going to talk about where it doesn't make sense to scrimp or be frugal in these areas. First one's health care. Listen to me on this one. Don't skimp on quality healthcare insurance or preventive care. This is what Mr. Johnson was doing.

He was skipping those visits. He was skipping that lab work. He was not taking all the medications that would really give him a better health situation. You know, do those regular checkups, do those annual screenings because they can catch potential health issues early. They can save you money in the long run.

I did an interview with my doctor just a couple of weeks ago. And we talked about that whole idea of preventive care. What did they say an ounce of prevention? It's the truth. You can catch things early like diabetes or high blood pressure or heart disease. They call those things silent killers. Boy, if you go in and get your regular checkups, get that regular lab work done.

And the problem is if you don't catch these things, they will truly impact your life and they will give you a negative retirement. So don't ever skim on quality health insurance or preventive care. I've had so many clients say to me, Ralph, I'm just doing the Medicare thing. I'm not doing the copay. I'm not doing the secondary insurance.

And I say to them, but why do that? Invest in yourself, invest in your healthcare. So that's the first one. Second one's housing. Now this one might seem obvious, but you need to ensure that your home is safe. Make your home comfortable, make it accessible. A lot of people don't want to talk about this, but you need to make those necessary modifications to accommodate your mobility challenges.

Hey, as we all get older, we're going to have those challenges, even if you're a marathon runner, even if you take great care of yourself. I see this at myself at 52, what I could do 10 years ago, I can't do now. It's a limited thing, right? But as you get older, that starts to grow. Well, you've got to make sure that your housing is set up
to handle that. So do those maintenances, do those repairs. I remember at one point before my mother passed away, and it'll be two years. I can't believe it in March. It'll be two years coming up. But I remember she had a second floor master bedroom and she used to tell me all the time. She goes, Ralph, as I get older, and these steps she had, man, it was like 14 steps and it was like climbing a ladder.

And I said to her one day, I said, mom, I said, why do you want to maintain this house with those steps? Well, you know, I just don't know about moving. It's a lot of expense and all this kind of thing. And I said to her, I said, why don't you look for a ranch house or a house that has a first floor master bedroom?

Because I could see as she was getting older, unfortunately she was taken from us. It didn't really impact her. But it might impact you. It might impact you, Tammy. I don't know what your living situation is, but make those necessary modifications, have that long term view. And I'm going to dare say something.

Don't wait till retirement to do it. When you're working and you're starting to figure out like, what does your retirement look like? Start thinking about that housing. Do you need the big house? Do you need the four bedroom house? Do you need the outside maintenance? I don't know about you where you're at Tammy, but in our area, a lot of these 55 and older communities are really starting to grow because they really got the point of, you know, somebody else handles the outside maintenance.

They've got very efficient things in them. So that's the second thing. And that is this housing. Ensure your home is safe, comfortable, and accessible, and make the necessary repairs. Let's talk about utilities because if you're going to have that house, you better have utilities to it. So prioritize that heating bill, cooling, electricity, all the things and water.

Because these things are crucial for your wellbeing and they should not be compromised. I can still remember when my wife and I bought our first home, we bought this house in a development, not far from where I'm at even today. I've kind of lived in Delaware my whole life, but we were looking at this house.

It was right next to a big County park. And these folks that were selling this house had actually lived there since it was built back in the 19, I guess, early 50s, late 40s, probably the early 50s. And so we really liked this house. It was a nice split level house, but we went into this house.

They had no air conditioning. And these folks were in their late 70s, early 80s. I don't remember exactly how old they were. And as part of the sales process, they wanted to do one of these radon checks. Now they would open up their windows. They had one of these whole house fans, like in the center of the ceiling on the second floor.

Well, the people came out to do the radon check and they said, listen, you know, you gotta seal up your house. You can't have any windows open. And I'm thinking of my wife. I said, wait a second. They don't have air conditioning. What are they going to do? So it was a sad situation, but they got the test done.

We went and met with them afterwards and they said, Oh yeah, it was a rough couple of days. I mean, it got to be almost 80 in here. And I thought about it. I said, you know what? Spend the money on cooling, spend the money on making yourself comfortable. So do not scrimp on those necessary utilities. Why do you want to live a life where you feel like you can, now, I'm not saying don't push that thermostat up a little bit to save a little money or drop it down in the winter time.

That's fine. You can put a sweater on, you can put a sweatshirt on. I get it. But to not have those basic utilities because you're trying to save a buck here and there just doesn't make any sense to me. Let's talk about nutrition. This is one I see a lot of my retirees battle with. You've got to invest in nutritious food choices.

Now listen, look at me. I'm not the picture of nutrition here, but you've got to make sure you're focusing on plenty of fruits and vegetables, lean proteins, whole grains, and healthy fats in your diet. It drives me crazy when I see people go into these dollar stores to do all of their grocery shopping, cause they're trying to save money.

Well, guess what? Most of these dollar stores don't have fruit. They don't have, now they might have canned fruit. They don't have fresh vegetables. They have canned vegetables, but they buy this garbage food at the dollar store. It drives me crazy. And it just has such a negative impact on their health, but their whole idea is, well, I've got to save money.
I've got to do this. I'm a big, I just dislike dollar stores from their very core. I've done a show about that. I encourage you to go check it out, but maintain your nutrition. It's going to help you live a longer life. It's going to help you live a more fulfilling life. Because it's a simple truth that what goes in is going to fuel that engine. If you're putting garbage into your body because you're trying to save a nickel and dime here, your body is going to not be as efficient as it could.

And finally, we arrive at giving. Like I mentioned yesterday, when I was talking to this client, you got to continue tithing and supporting charitable causes. You might say, Ralph, wait a second, dude, I'm living on what we all hear, you know, I'm living on a fixed income. Well, guess who's providing that income to you.

Giving back is an act of worship and it's a reflection of your gratitude for God's provision. Even when you're in retirement, God is still providing for you. And here's an absolute truth bomb. Most churches are counting on their older and established members to keep things going. I do the finances for a couple of churches.

And I will tell you, the older folks in the congregation are generally the people who are keeping the missions going. So don't scrimp and save on that. Continue to make that generosity. As I said, my client yesterday, she said to me, she says, Ralph, it's funny. Now, of course, this is world logic.

She's a Christian person. She understood where we were going with this. And she says, it's amazing. The more I give, the more I receive. I'm like, yeah, exactly. That's biblical. And in the end, Tammy, it's all about finding balance. These action steps will help you find that balance. You'll be able to enjoy your retirement while maintaining a secure financial future.

It's all about being financially responsible and enjoying the fruits of your labor. Look, you work so hard to get here. So enjoy it. I'm going to make a little caveat within reason. Don't go crazy and go taking trips here and there and spending money like you're a fool. I'm not saying that at all. So you might be thinking, Ralph, that's great.

Okay. I get it. Here's the things I shouldn't scrimp and save on, but you keep on talking about budgeting. How do you do it? So Tammy, I've got some practical budgeting strategies that can help you navigate your retirement. And these are my basic budgeting steps. They kind of relate to everyone, but I'm going to sort of hyper focus these on retirement today.
Number one thing that's important. You start off with the facts, identify your income sources. Now, if you're retired, that's going to be a budget with things like social security benefits, pension payments, annuity payments, investment income and any other source of income you might have. Listen, I've got a lot of clients that are still working.
I've got a lot of clients doing what we call side gigs or side hustles to just, you know, to enhance some of their income. But that's where it starts. So Tammy, in your particular situation, make a list of all your income sources and the amount you receive from each one, because this is going to give you a clear picture of how much money you have coming in each month.

And that's what you're going to need to start that budget. The budget top line for most budgets I've ever worked with, and we'll call it an intentional spending plan. I like that even better. Starts off with the income side, the revenue side. So that's the first thing. Identify your income sources. Second thing, list your essential expenses.

List all of your essential expenses. These are the things that I will dare say are the costs that you can avoid. These are the things we've talked about. Healthcare, housing, utilities, groceries, food. These are the things that are crucial for your well being. Now you noticed I said essential. That's the key to this.

These are your needs, not your wants. We're going to talk about that in a few minutes. So let's take a little bit of a look at what I consider essential expenses.

Here's my list of what I'll call Ralph's essential expenses. And I mentioned this before.
Healthcare is number one. Have good medical insurance and go use it, pay those copays, pay those deductibles and make sure you're living a healthy life going and getting those out of pocket expenses covered with the things that you need to benefit your health. That's where it starts. Second thing, housing. You got to put this is one of your crucial things, whether it's a mortgage payment or a rent payment, budget those property taxes, budget that home insurance.

And here's what a lot of people neglect. Budget an amount for maintenance costs every month. That way you've built it right into your intentional spending plan. The next thing is utilities. That's the electric, water, heating, cooling, make sure they're reflected in your budget. Again, I consider these essential expenses.

Let's talk about nutrition. Now, you notice I didn't use the word the grocery, but that's really what I'm talking about. But I want to start with a framework. I want to have a mindset that we're going to eat nutritiously. So I'll call that my nutrition expenses. That's your groceries. That's any of the supplements you take to really make your body work well.

Another thing you want to include in your essential list is transportation. Maybe that's car payments, insurance, maintenance on your car, budget that. And if you're living in the city and you take public transportation, put that into your budget as well. Look at how often you travel, build that all into your budget.

And last but not least, and you know, I'm still talking about essential expenses. Build that giving part, those tithes, those charitable donations, and any financial support you provide to family and friends. Yes, you heard me right. Any support you provide to family and friends, because maybe like a lot of my retired couples, maybe you help your grandchildren with education costs, or maybe you help a friend with this or that.

Build that into the budget and build that into the essential part of your budget because that's important to you. So Tammy, make a list of all your essential expenses and the amounts you spend on each one. Put those down line by line, because this is going to help you understand where your money's going and ensure that you're covering all the basics.

So now we've talked, we started with income and now we've handled those, what I call essential expenses. Now you're left with the allocation of discretionary expenses. So once you've covered all those essential expenses, now you can start having some allocation for discretionary things. So now we've moved beyond the needs and now we're moving into the wants.

You might say, Ralph, what are those things? Well, Tammy, I've got a list here for you. Number one, entertainment. Because you're retired and living on a fixed income doesn't mean you shouldn't have any entertainment. So build in some what I call discretionary expenses, like dining out, movies, concerts, and other leisure activities.

You don't have to break the bank on that. I've done shows about how you can do those freely. There's a lot of places where they get free concerts. You can find leisure activities. It don't cost a lot but build something into that discretionary budget. Second thing is travel. A lot of my retired clients, you know, they want to go see their family.

They want to go see their grandkids. They want to go take that time they've never been able to take while they were working because they didn't have that week off or those two weeks off. They didn't have the time to travel. So build that into your discretionary budget, things like vacations, trips, and any other travel related expenses.

Maybe you'd like to go see this particular thing. Maybe you have that bucket list, build that into the budget. Another thing is hobbies. You know, now you're not working, you're going to have more time for hobbies. Those are activities and interests that you enjoy in your free time, build that into your budget.

A lot of people don't think about that, but build that in. If you're a crafter, build those craft expenses in, maybe you'd like to, you know, whittle wood and do all that kind of stuff that my grandfather did in the wood shop. Build that into it, put that into the budget. Another thing that I'll put under discretionary, you know, some of this could be essential, but personal care. Put the haircuts down, do the grooming and any other personal care expenses. If you've got pets, I would put that stuff here too, because your pets are going to need to go to the vet. Maybe you have a pet that needs to get clipped. We've got a big German shepherd. She isn't clipped. My wife just brushes her off every day.

And it looks like something died when she gets done. There's hair everywhere. So Tammy, getting back to your particular question, this is where you make a list of all those discretionary expenses and any amount you spend on each one, because this is going to help you understand where you can cut back if you need to.

See, we're talking about the discretionary point. So if you find yourself in a particular month where things are tight and you're having a hard time meeting those crucial expenses, those essential ones, this is the area of the budget you can look and say, well, you know, yeah, I really can't afford to eat out this month, or I really can't afford that entertainment.

I was thinking about taking that trip, but I'm going to put that off because I had something come up in repair of the house, or I had this medical expenses, medical tests that wasn't covered by insurance, but the doctor really said I needed it. So this is where you can go look at those discretionary expenses and say, okay, yep.

You know what? I can scrimp and save here. You notice I didn't say scrimp and save on the essentials. I said, scrimp and save on the discretionary. Because this will help you enjoy your retirement and it ensures that you're spending money on things that bring you joy and fulfillment. So now that you've done those things, I think the next big step, and a lot of people don't do this, is create a savings plan.

You might be saying, wait a minute, Ralph, I'm in a point of saving. I'm in a point of spending my savings. But see, that's where I think you're making a tactical mistake because it's important to have a savings plan even in your retirement budget. Yes. You heard me right. That means setting aside money for emergencies.

Those unexpected expenses. I'm gonna talk a little bit about in a few minutes and any future goals you might have. Just because you're retired doesn't mean you still don't have some saving goals and see so many people, so many of my clients miss this step in their, what we'll call spending days. But it's so important because things happen, unexpected things happen.

There are emergencies you're not planning for. So Tammy, aim to save a certain percentage of your income each month, just like you did when you were working. You put a certain money aside. Maybe you're putting that into your retirement. But this will help you build that financial cushion. It's going to help you ensure that you're prepared for any unexpected costs that might come up.

And the next thing you absolutely need to do, this is the number five on my list here of action items. You got to review and adjust your budget regularly. Review and adjust that intentional spending plan because it's not a set it and forget it. Things change. The last couple of years we've seen inflation.

It's affected my retired clients I think more so than anybody, because their income is sort of limited. They're not seeing that big increase in their retirement money. They're not seeing that big increase in their pension or in their social security, but they're certainly seeing the big increase in the costs.

So you've got to look at that on a regular basis. Maybe once a year, maybe every six months and make sure it still aligns. Make sure the numbers still work. I've worked with clients that had a budget and they were living by the budget, but they didn't realize, or they didn't adjust their budget to reflect the fact that, hey, groceries are now 30 percent more and that's under the essentials.

So they had to look for ways to cut back on some of that discretionary spending. It meant maybe going out every other week or finding free concerts and things like that. But you need to set aside some time each month or each quarter to review your budget. Look at those income and expenses. Make sure that the things are still holding and the values and the amounts that you're allocating still make sense.

And then make any necessary adjustments. You know, it's not like your budget is one of these things where you have a stone tablet and you're out there chiseling in the stone and it's going to be a one time thing. Your budget could change month to month. I think the framework stays the same. I think that the way we've put it together, the structure stays the same.

But when things change, things change. Like you might have a medical condition now that requires more medical. Maybe there's some ongoing treatment. Maybe there's physical therapy. My client yesterday that we were talking about, she just had hip replacement surgery. Well, now she's got copays for physical therapy.

She might have some additional medication. But if you review this, it'll help you stay on track and help you make better, more informed financial decisions. So now let's talk about how to do that. Let's talk about some budgeting tools and resources that are available. There are a ton of these. There are many resources and tools available to help you create a budget.

I'm going to talk about some of the expense calculators and all that. I'm going to talk about some actual apps. I'm not going to spend a lot of time talking about this because I don't want to bore everybody. But there are some online tools that can help you estimate your retirement expenses and plan accordingly.

There's websites like Merrill Lynch has one, NerdWallet's got one, even Citizens Bank offers some retirement calculators that can provide some valuable insights. I'm not endorsing any of those. I'm just saying they're there. There are a bunch of budgeting apps. I'm going to spend a couple of minutes now talking about some of these because most of my clients said are a little bit older, a little retired.

They still have a good technology connection. You don't have to use technology. This can be something that's scratched out on the back of a napkin as long as you have an intentional plan. But some of these budgeting apps will really help you refine it. They'll help you measure, they'll help you stay on track that will be set savings goals and most importantly, stay on track for what you're trying to accomplish. So let me cover some of those here. One of the other things you want to do, excuse me, I'm going to cover those in a few minutes. One of the other things I think you really need to focus in, and this is thing a lot of people don't spend the money here.

I think it really makes sense to hire a financial advisor. And a lot of people say, Ralph, you know, yeah, that's a lot of money. They charge me a fee for what they make. Yes, they do. But here's the deal. You need to work with an advisor to get personalized guidance on your retirement, on your retirement budget, on your retirement spending.

They can help you make it better. They can help you fix those corners. It's like taking a piece of sandpaper to a piece of wood, they can make it look really nice. They'll give you that ongoing support because listen, this is not your area expertise most of the time. Now, if you're a retired financial advisor, you can ignore me on this one, but most people aren't.
This client I had in yesterday, great example of this. She works with somebody I recommended. She goes and meets with him a couple of times a year. The thing I love about her is then she comes in and says, Ralph, what do you think about what he said? And for the most part, we're on the same page. Sometimes we have a little bit of a difference.

This is a critical step that so many people overlook. They're so scared of spending a little bit of money and it's just a little bit of money, but it is a great amount of peace of mind you can get for that. So here are some things I promise. I talk about some specific budgeting apps because we live in a world of technology.

And these apps, some of them are fantastic. I'm going to mention one. I mention several of them, and I'm going to tell you about why I think they're so good for retirees. And I'm not endorsing any of these, I don't have an affiliate link with me. There's no profit motive here. I'm just throwing these out there as I prepared for this show. I found some of these that I wanted to share with you.

The first one is called Mint. And why I think this one's great for retirees is it has a user friendly interface. It's very easy to use, but it has some really good comprehensive features. It sends budget alerts when you're approaching or exceeding your limits. You set that budget and it'll tell you, Hey, guess what?

We're getting close on the utilities budget this month, or more importantly, we're getting close on the entertainment budget. We're on the travel budget. And it is absolutely great for tracking income, tracking expenses, and putting all your investments in one place. Remember, as I always say, what gets measured, gets done.

So if you can use this app to keep track of all that, it's going to make that budget comparison however often you look at it a lot easier. The next one is called You Need A Budget. YNAB. Now, this is why I think it's great for retirees. It uses what's called a zero based budgeting approach. Which just means it doesn't have any built in fluff.
It's highly customizable. And I think I like about this one it does offer some educational resources to help you become a better budgeter. It actually has some tutorials in that, and it is a great thing. And that's why I think this one's kind of more focused on the budgeting aspect. It's great for doing detailed and flexible budgeting.

So that's YNAB, You Need A Budget. Another one is called Personal Capital. Now, I think this one's great for retirees because it excels in investment tracking. If you're one of these people that really wants to track your investments, you want to be laser focused on, I got several clients that use this particular one.

It offers some free retirement planning tools, and it gives you what I call a holistic view of your financial situation which makes it easy to look at where you stand. I did a short video the other day talking about net worth. So it really kind of focuses in on that one. Another one is called PocketGuard.

Now PocketGuard is known for its simplicity and ease of use. And I've never actually used PocketGuard, but it helps you set spending limits. It sends reminders of your upcoming bills. And as we get a little older, that's probably not a bad thing to have to just give us those little nudges. Hey, don't forget this is due and that's due.

And it tracks your income and expenses, which I think is very, very important. Now, Dave Ramsey also has one, and I'm not a big Dave Ramsey fan, but I think he has his place. It's called EveryDollar. And again, it uses this zero based budgeting approach, and he claims to have a use an easy user interface.

And it's based on his principles, his financial principles of emphasizes living debt free and saving for the future. So if you buy into his approach, then this might be a good one for you. And the final one I'm gonna talk about next is called Goodbudget. Now, Goodbudget is good for retirees because it kind of uses that same envelope system.

I talked about this on the show the other day, my mother's father and mother, my grandparents on my mother's side, they totally used that envelope system. Whenever my grandmother would get paid or my grandfather would get paid or they'd get their social security or their pension money, my grandmother had the envelopes, you know, the envelope for groceries and the envelope for repairs and maintenance, the envelope for our, what she called it our fund money and the envelope for, you understand. All those types of things.

Well, this Goodbudget kind of uses that same approach. The thing I like about this one, it syncs across multiple devices. So you can have it on your smartphone, you can have it on your tablet, you can have it on your computer, and it gives you a bunch of detailed reports and charts. And it's great for detailed and shared budgeting with maybe your spouse or your partner or something along those lines.

And again, I'm not endorsing any of these. Take a look at them. You can go to their websites. A lot of them have free trial offers. You can test them out and each of them has their own strengths and features that can be particularly beneficial for a retiree. So Tammy, you might want to look about these.

The key is to find the one that best fits your specific needs and preferences. Now everybody's different. I say it on the show all the time. There's no cookie cutter approach. Well, now let's get to where the rubber meets the road. Let me tell you about what Ralph feels are some good budgeting tips for retirees.

And I've assembled these over the last 30 years of working with people. I've seen what works. I see what doesn't work, but these are some tips to help you create and manage your retirement budget.

And these aren't necessarily specific things, but these are just like big picture things.
The first thing, hear me on this one. You got to be realistic. When creating your budget, be realistic about your income, be realistic about your expenses. This isn't a time to overestimate your income or underestimate your expenses because you have this pie in the sky belief that things are going to be beautiful and it's all rainbows and unicorns.

Be real. I talk about it on the show all the time. Just the facts. What is your income? What are your expenses? When you're creating a budget, one of the things that I think is great to do is go look at the last 12 months of your income. Go look at the last 12 months of your expenses and then create your budget because you want to have a budget that's achievable and sustainable.

If you have lies in it, if it's like the wishing pie in the sky things, it's not going to work. It's not going to help you. Yes. You'll have a nice budget. You can say, Oh, the percentages make sense. And boy, we can do this, but if you're not going to do it, don't put it into the budget. Use your best estimates, but use the facts.

That's so number one, be realistic. Second thing, and I think you're hearing me, what I'm saying today. You got to prioritize those essential expenses. If nothing else, make sure you're covering all your essential expenses before allocating anything to those discretionary expenses. Listen, that's a hard thing to accept, but the truth is this. Income minus essential expenses, whatever's left, that's what you got for discretionary spending.

Well, if there's nothing left then you're going to have to figure out how to make it work. Maybe you've got to go get that second job. Maybe you've got to go find other ways to get income. Maybe you need to downsize. I've talked about this on many shows. But by doing this, by prioritizing those essential expenses, you're going to ensure that you're taking care of your basic needs and securing your financial future.

And you got to put those all into the plan. That's why I said, be real, be truthful, put all of those things in a plan. Look at the last 12 months, Oh yeah. I hadn't thought about Christmas gifts. Oh, I hadn't thought about birthday gifts. Oh, I hadn't thought about travel that we always do with a church outing.

I mean, there's all kinds of things that you can do. Now, another part of the process is where you decide to cut back. And I'm going to tell you, don't cut back on essentials, but do cut back on those non essential expenses. Look for areas where you can cut back on these. This might include, you know, maybe you don't have as much entertainment costs.

Maybe you limit your luxury purchases. Here's a pet peeve of Ralph's. Cancel those unused subscriptions. That's where you're going to find the places to cut. Don't cut into the essentials. You're not going to cut into the income. You can't cut into the essentials either. That is so important. Don't be like Mr. Johnson. Don't cut those annual visits. Don't scrimp and save on repairs and maintenance to your house. Another big thing and hear me on this one too. You got to plan for unexpected expenses. Make sure you have that savings plan. Make sure you have that emergency fund. Yes. Keep that emergency fund growing in retirement.

It is so crucial. I don't know how many times I've held, or I give you an example of this. One of my good friends, Bob. He's one of my Facebook friends. He's been a client of mine for many years. We talked, we got to dinner with him and his wife and those kinds of things. Well, yesterday put on Facebook that his refrigerator freezer died.

Well, guess what? He wasn't expecting that. That was an unexpected thing. So set aside a certain amount of money each month for emergencies, or we're creating a separate emergency fund, make it hard to get to, but do that. And last but not least, seek professional advice. Tammy, if you or other people listening to this are struggling, maybe you can't figure out how to create, or maybe you've got the budget, but man, I'm just having a hard time implementing this, Ralph. I'm having a hard time managing my retirement budget. Seek professional advice. Yes. It might cost you a little bit of money. But think about the peace of mind. Think about the anxiety that'll break, because listen, if you have anxiety, that's going to lead to negative health effects as well. And working with a financial advisor, I'll tell you how you can work with me a little bit later in the show, that can provide you with guidance and support

you need to make informed financial decisions. And we all want to make these. So Tammy, here's my big takeaway. And I think I've made it very clear today. If you follow these tips, you can create a budget that helps you manage your finances effectively, and you can enjoy your retirement to the fullest. You can stop worrying about it.

You can stop having that anxiety. You can stop feeling like, Hey, I'm going to run out of money. Because the truth is working with somebody like me or building your own budget, you can figure out how you may not even have to tap the capital. You might not even have to tap the principle of your investments.

If you set your budget correctly, you may be able to very well live off just the income from those, but it takes an investment in that intentional or that budget plan.


Now, if you want to go even deeper, as if I hadn't gone deep enough, you can go look at our blog post for today.

And you can check out this for every day we do a show. I also write a blog post. I put in there my references I put in there my resources. You get to that by going to askralphpodcast.com/blog. That's why, like I said, I share more details, more resources, can show you how to create, manage your budget retirement effectively.

Again, every day, askralphpodcast.com/blog. Well, let's get to our reflection questions. You know, Tammy, I always like to end with some reflection questions so we can go back and kind of think through the things we talked about and I'm gonna give you a quick recap here in a few moments as well, but here's three reflection questions.

Number one. And this is all part of that budging process. What are your main income sources in retirement, and how much do you receive from each one? That is the starting point. Write them down. Maybe you do a required minimum distribution once or twice a year. Write it down. Put it into the budget and understand the impact of that. Second thing.
And this is crucial. List out your essential expenses and write down how much you spend on each one of them. That needs to be your starting point because you're not going to get to that discretionary part until you list out the essential ones and list them all. And then third reflection question for today.

What action steps are you going to take today, tomorrow, and this week to create and manage your retirement budget? I know a lot of people listening to this, Tammy, I don't know if you've got a budget, but a lot of people listen to this. They don't take the time to sit down and do that and say, Oh, I just, Ralph, I don't understand how to do it.
I've given you a very basic plan of how to do it.

And listen, I know this, managing your finances in retirement can be overwhelming. That fear of running out of money is real. And it's understandable that you might feel anxious about making the right decisions.

I get it. I deal with this every day, but here's the thing. You don't have to navigate this alone. You don't have to do this on your own. Just imagine for a moment, imagine a life where you can enjoy your retirement without the constant worry of this financial instability. Manage being able to prioritize your health, prioritize your home, and prioritize your loved ones without cutting corners.

That was the whole point of today's show. And just imagine if you will, the peace of mind that comes from knowing you have a solid financial plan in place. And see, that's where I can help you. That's where I come in. With my expertise and guidance, we can work together to create a tailored financial plan that addresses your unique needs and your concerns.

Not everybody else's, these are yours. I'll work with you. I'll help you identify your essential expenses. I'll talk about what those look like. I'm gonna help you optimize your budget. And I'll help you ensure that you're making the most of your retirement income and your retirement lifestyle. But see, here's the thing you got to understand.

It's not just about the numbers. If that was it, that'd be simple. I say that on the show all the time. Numbers are simple, but it's not just about the numbers. It's about empowering you to make informed decisions. Knowledge is power. It's about finding ways to live with confidence and most importantly, to enjoy the fruits of your labor.

It's about transforming that anxiety that you're feeling right now. Tammy, I heard it loud and clear in your question. It's about transforming that anxiety into assurance and listen to me on this one, and that fear into freedom. Yes, you can take that fear and make it your biggest asset make it freedom.

So when you book a call with me, we'll dive deep into your financial situation. We'll discuss your income sources. We'll talk about your expenses. We'll talk about your goals, think about those big, hairy, audacious goals. We'll create a budget. It's not just a list of numbers. It's not, it's going to be so much bigger than that.

It's going to be what I'll call the roadmap to your dreams. And here's the brilliant and beautiful takeaway. We're going to ensure that you're not just surviving but you're thriving in retirement. Doesn't that sound good? Because I've seen firsthand how proper financial planning can change lives. I've seen the relief on my client's faces when they realize that they can afford to live comfortably and enjoy their retirement.

It is like an explosion of positivity. It's happened so many times here in my office. I had it happen yesterday with another couple that's getting close to retirement. They're going to go buy their dream house and I've helped them get to that point. See, I've seen the joy that comes from knowing they can provide for their loved ones and support the causes they care about.

I helped Mr. Johnson do that. I helped him build that legacy for his daughter. And I want that for you. I want that for you, Tammy and everybody else listen, I want you to experience that same relief and that same joy. So don't let fear and anxiety control your retirement. Don't let the worry of running out of money keep you from living the life you deserve.

Take that first step towards financial freedom and peace of mind and book a call with me today. You do that by going to askralph.com. The top of the screen, you'll see a button that says, book a call with Ralph. If you don't forget it, you can go right to our show notes, but do that. Book that call today and let's work together to secure your financial future and make your retirement dreams and your retirement years truly golden.

So hear me, if you're ready to take control of your finances, if you're ready to transform your retirement and move beyond that fear and anxiety, head over to askralph.com and book your call and let's turn your financial concerns into confidence and your dreams into reality. And one more thing. If you find value in today's show, if you're finding value in the show, I really would like you to consider supporting us.

You can go right to askralphpodcast.com/support. You can make a one time support. I would love for you to be a member of the team so that we can take those supporting people and find more people and go find more people with a message of reach more retirees, reach more people who are just starting out or all those people who are struggling.

That's why we ask for support because we want to take this message to a broader range of people. We want to be on more platforms. We want to develop more content. So I would really appreciate if you consider supporting the show. And again, you do that at askralphpodcast.com/support. Well, thank you for joining me today, but I want to recap just some main takeaways from today's episodes.

These are the things I really want you to think about and sort of reflect on. Number one thing, prioritize your essential expenses. We talked about this. Healthcare, housing, essential utilities, nutrition, giving that's thing number one, prioritize those things. Second thing, use those budgeting tools and apps.

Look at the one that works for you. Create that realistic budget. Continue to save for emergencies, and seek professional guidance if you need it. And I'm going to encourage you to do it because you're going to find value. If you've got to spend a couple bucks, Hey, guess what? It's money well spent. That peace of mind is worth it.

So thank you for joining me today on the Ask Ralph show. I hope you found this information helpful and encouraging. That is one of my goals. I want you to be encouraged when you're listening. And remember, you're not alone in your financial journey. I'm here to help you and support you every step of the way.

And like I said earlier, if you've got questions you'd like me to answer, go to justaskralph.com or join us live on Tuesdays at 1 PM. Again, that's at askralphpodcast.com/live. And tomorrow we're going to have a fun show. We're going to discuss whether diligence and discipline can slash your grocery bill, your shopping bill.

It's one you don't want to miss. It's a replay of our live show we had from last Tuesday. It was a great interaction between Craig, my guest host, and I. And as I close, remember this. My passion is to help you achieve financial success. I want to see you live out your dreams and I want to see you grow in your faith.

And I know together, working together, if you want to be a part of this, we can master your finances from that Christian perspective. So God bless you and have a great day.

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