How To Maintain Your Standard Of Living On A Fixed Income Despite Rising Expenses

One of the must-haves in retirement IMHO is maintaining a budget. Without one, you really can’t make proper judgment calls on your standard of living, especially when you are on a fixed income. I have a budget that I refer to practically every single day (or at least whenever I spend money) My retirement financial life is based upon the passive income that comes into my life on a monthly/semi-annual/annual basis. In other words, I can spend only up to the limit of what dollar amount comes in. If I want or need to spend more, I either have to go back to work (never!) or liquidate some assets.

For example: I needed a new winter coat this season. The keyword here is ‘new’. I wasn’t going to Goodwill or a thrift shop. I wanted brand new. I also wanted a down, full length coat to cope with the brutal northeast winters. I had a pre-fixed price in my head: my budget allowed $100. Most down coats however, are usually priced upwards of $200. What to do? How do I keep my budget intact as well as my standard of living? (a wool coat was not an alternative)

First I researched the down coat and the price. The list price was $180. Once I found the item, I searched for discounts or coupons. Luckily a reader sent me a coupon for 25% off. I also discovered if I ordered the exact coat in misses sizes instead of woman’s sizes, I would save $10 off the cost of the down coat. This and the coupon lowered the price of the coat down to $127.50. This was still above my budget limit. What to do? I looked through my hall closet and found two nearly new winter coats I could sell at my local consignment shop. I got $23.20 for one of them and $43.60 for the other. I now had more than enough money to buy myself a brand new down, full length coat without sacrificing my standard or quality of living.

And that’s how it’s done. And that’s how I’ve been doing it all my life. I’m not afraid of inflation. I’m not concerned about my quality or standard of living. My motto is: there is always a way through the maze. You just have to imagine the end result in your mind and then let your brain figure out the rest.

What did I do with the extra cash I now had once I purchased the coat? I bought myself a brand new, wool hat to go with my new coat. I was actually ahead of the game rather than behind it.

My bills for January 2019 are starting to roll into my mailbox. From what I have received so far, here are the annual increases each category will go up starting on the first of the year:

  1. $212.40 medical supplemental insurance
  2. $578 propane gas
  3. $231 property taxes
  4. $36 internet fees
  5. $235.08 satellite TV
  6. $39.38 sanitation
  7. $135.96 car insurance
  8.  $208 home insurance

So far, I am looking at an annual increase of $1676 to cover my standard bills. That comes to $140 more a month. The above list is NOT taking into account what I pay for food, gas, clothing, haircuts, home maintenance and repairs, all of which we know will be going up. Will my income be increasing next year by $140 a month? I doubt it. So, what do I do to continue to maintain my standard of living as inflation rears its ugly head? The first thing I did was look over my total budget and all of my categories. Was there anything I could cut without feeling any pain?

I lowered my $500 monthly food bill down to $475 but that reduction didn’t last very long. I like to eat, so that move was moot. I tried to cut back on restaurant meals but that didn’t work either. Eating out is a form of socialization for me, so I’m not skipping it. I was able to cut back on vehicle gas but not much. DH and I are already set with our clothing needs for the foreseeable future, so that was another moot point. I just discovered the beautiful benefits of the $40 haircut vs the factory $13 haircut I used to get. This item is non-negotiable. I’m not going back to factory cookie-cutter haircuts. I have a professional cutting my hair and it shows! Now that DH is home more, he’s back to doing all the maintenance, repairs and general property upkeep (this alone was an annual savings of nearly $1,000)

One of our biggest expense categories is TRAVEL. When you’re retired, this is what you do. Our retirement travel dream has always been to own an RV and travel throughout America. (during our working years we did Europe and the Caribbean) The last few RV trips we’ve taken however, astounded me as to how expensive they can be! We only RVed on the coastal shores of Maine for 8 days and that set us back $954 plus $32 in tolls! I calculated, at this rate, we were going to spend at least $5,000 a year on RV travel.


I recently discovered the wonders and the near zero rates national and state parks charge for RV sites and I was able to lower our travel budget line item from $5,000 to $1,932 per year! That’s a savings of $3,068 off our annual budget without any decline in our standard of living or travel expectations! This money goes into a savings account for now!

shopping at aldi using charge card.jpg
Shopping at Aldi using our frequent flyer charge card for double points!

The other alternative I discovered regarding our travel requirements was the wonders of frequent-flyer miles on our charge cards. For years hubby and I had been acquiring non-expiring miles. We have enough points accumulated to go to Las Vegas this year (and rent a car and drive to The Grand Canyon), Bermuda next year and probably Aruba or Mexico the following year. Heck, we might even go to South America. We haven’t decided. All for free (we just have to pay the taxes on 2 round trip tickets at a total of $22.50. That’s it)

Lastly, let me emphasize the holistic benefits of sales, sales, sales. As long as you are buying whatever it is you would normally buy, but now you are buying it on a sale, you are saving actual money. Again, a good friend alerted me to an up and coming Italian Food Sale because she knew I was scheduled to cook several lasagnas for a holiday party. I was able to save 50% on the required ingredients (plus I bought a little extra to store in our freezer). I actually saved an authentic $39.50 off this required food purchase!

Thanks to a tip, I saved $39.50 off a required holiday party shopping list!

Personally, I’d say DH and I are doing better, despite inflation or any rise in our expense categories. The trick is to set up a budget, look over your expenses often and when you see a rise in one category, if you do not have the income to meet the increase, deduct something in another category to offset the rise. The other alternative would be to either work or sell an asset. The last alternative would be to do without the item but that’s a personal choice. I like the quality of my life right now, as it is. It took me a while to get to this standard of living and I’m not reducing it nor going without anything. I’m not giving up a thing. I’m just finding another route through the maze.

Live well and prosper, my friend. Live well and prosper.

And if you know of a bargain someone can benefit from, share! We’re all in this together!



  1. Hi Cindi, WOW! You really are being hit with inflation! Did you shop around on the auto and home insurance increases? I keep getting better rate quotes mailed to me. So I got all of these bills and it’s unbelievable but some went down and it balance the ones that went up and the total increase $120 annual. I had already covered with switching to higher interest and so the excess will stay in my account making more interest for the next year when I lose my $600 retiree HRA from my husbands’s old company.
    The Italian festival at ShopRite continues next week and instead of Galbani the same prices are on Polly-O brand. One of their deals is buy 6 Tuttarossa tomatoe 28 oz cans and pay only 79 cents a can. They have a gift card promotion get a $10 ShopRite coupon good the next week only when you buy $50 Home Depot and Lowe gift card. Their competitor Stop and Shop starting Friday Nov 9 through the next Thursday is running buy $100 in a larger variety of gift cards and get a $20 coupon off groceries that prints on your receipt. They have the best advertised turkey price at 39 cents lb. limit two when you spend only $25 dollars. I will use the $20 coupon for Other Thanksgiving and holiday baking needs-McCormack extracts that are also on sale $2 off each and walnuts. All of this I purchase using my rewards credit card to buy and get 3.5% back. I love love sales too! And I will put one of the turkeys in the freezer for January when I pay off the charges to lower my food bill that month. And make lots of soup to keep a cold away and stay warm. Sincerely, Lara


    • Lara, I already switched to new home and car insurance companies. I’m saving thousands of dollars with that. BUT, each year the new companies raise their prices. They have NOT, however even come close to how high those bills used to be.
      I’m loving the 39 cents for turkey!!!!! I’m going to check that out. is the sale now???


    • Hi Lara. I do the same exact thing. But do I really want these people to know no one is home? That’s the tricky part.
      I know I should get rid of cable/satellite but hubby likes his particular shows and I really don’t want him to be without them. He enjoys his TV time. He’s worked hard all his life. If it makes him happy, then all the more.


  2. I prioritize now pampering myself with the fastest internet, IPhone 8Gplus for great pictures and larger screen after an emergency only flip phone for twenty years, unlimited long distance calling and I don’t know how many channels as long as I have PBS, Hallmark, Food, Comedy Central,DIY, and HGTV, and Bravo, I have all I need and I love on demand that fits my schedule. IMHO Nick and you deserve cable. Travel is the whipped cream on the hot fudge sundae, fast internet the hot fudge,but cable is the daily dose of ice cream. sincerely, Lara


    • Hi Lara. I only watch ‘cable (it’s really satellite) to view the daily local news. After that, I’m on Netflix. They have their own Xmas movie series and I’m loving that right now! Plus I get to see the latest on Richard Madden, the next new James Bond. Oh yes! (in a Netflix series entitled ‘Bodyguard’)
      I have my eyes set on the latest iPhone Xs, because of the advances in the dual lens and related photography software. No more clunky cameras for me anymore. The only luxury want I have on my wish list is just one thing: a massage. Gotta have one by my birthday!


  3. Girlfriend, you are singing my song. I have NEVER not had a budget and I never understood other adults who said they didn’t have one. If you don’t have a budget how can you know if you can afford to go to the movies or buy a new pair of shoes?

    I’m with you on the haircuts. About three years ago I started going to a real stylist, after a lifetime of Supercuts, and I have never looked back. Also, a couple of years back I hired a housekeeper who comes in twice a month. That’s plenty often for a couple of old folks. I have forgotten what a vacuum looks like. 😀 Of course, if catastrophe should strike, I could, and would, live without both of those things.

    We have traveled so much that we can’t think of anywhere else we want to go. We’ve been to Europe a number of times and can no longer take those really long 10-12 hour flights in coach section. I would love, love, love to fly business class for long distances but that is something we’ll never spend money on, so those flights are out.

    We’re on the west coast and go to Hawaii at least once a year. For the last five or six we’ve never gone without having the hotel or the flights paid for with credit card points. How sweet it is.

    And, like you, when one category of expenses rises in the budget, I jimmy things around in a different category until it all fits.

    I always thought budgeting was fun.


    • Budgeting IS fun, Anne. You get to do what you want and you get to choose how you will do it.
      I’m liking this Bermuda thing. I used to go every year for my college spring break. We’re going next year and truthfully, we might start going every year. It’s not too far for us and it sure beats out Florida! Especially when we can rent a moped and pretend we’re youths again. LOL!
      I haven’t gotten to the housekeeper stage yet. But each time I have to mop my kitchen floor, I’m getting closer to picking up that phone!
      Thanks for your comment.


      • Hey thanks for the heads up on Bodygaurd and Christmas movies. I will watch them at my son’s. I loved Amazon Prime series Jack Ryan I binge watch it and the Marvelous Mrs Maple.

        Liked by 1 person

  4. When I was 51 my kids were done with college and on their own and I let go of the spreadsheet. We were such creatures of habit and longtime savers first that we didn’t have to track everything. I then only tracked net worth and achieving financial goals each year.We always lived below our means. We had reached the “enough “ stage ready for retirement. We talked about our retirement dreams and wish list and prioritize what we would do each year with our extra passive income. Eighteen months later My DH started his fight against his end disease. Life throws curve balls but I negotiated through the grief and financial lean years. I discovered brokerage CDs in 2010 with better yields. 2013, At sixty, I realized my new pension and passive income put me at more then enough. No more worrying. No need to budget. I still like to get a good bargain though.Now flash to 2016 I am loving the new rewards credit cards, bank bonuses, grocery offers. It’s fun to make money from these offers. And then 2017 -higher interest rates and then 2018 a new money mentor, the retiredIBM exec and I am in a whole new financial adventure while continuing my old habits. I decided how much risk I am willing to do for a higher yield and drew a line in the sand. I set new money goals and a dream wish list. Spent $16,000 of the capital gains on this list. And then we had a market setback but I have learn to hold the course and put on hold doing more on the list. So only time will tell what life throws my way. I know I never want to go back to work or have a written budget that creates IMHO a sense of failure if I don’t make the pre chosen spending. I never want to have to rob Peter to pay Paul again. I want to be able to pursue creative outlets or travel if the mood strikes me. It’s a different mindset and Freedom, then thrifty or frugal. I am trying to get comfortable with this new mindset. No worries. YES! Lara


  5. Hallelujah! Saving money on what I need or want has become a game rather then a necessity to cover my cost of living. It only took like Forever for me to realize I have arrived at abundance . Lara


  6. From Retirement Manifesto :
    “Dave Ramsey quote is “Live like no one else, so later you can live like no one else.” Pretty catchy, actually.

    But What Does It Mean?

    The first part is pretty obvious (live below your means), but how does one go about the “So Later, You Can Live Like No One Else” side of the equation?”
    Let the benefits of living below your means reap dividends you can enjoy in retirement.” Lara


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