A nancially secure retirement involves more than building a substantial nest egg.
To maximize each dollar, it also requires adapting long-time spending habits to a retiree’s new way of life.
Adjusting to this new normal isn’t always easy, especially when a little retail therapy is a tempting excuse to get out of the house.
“Many of the retirees I interviewed have the same structure of spending that they did when they were working,” says consumer psychologist Kit Yarrow in an interview with USA Today. In her book, Decoding the New
Consumer Mind: how and Why We Shop and Buy, Yarrow analyzes the motivations and behavior of thousands of consumers,includingretirees.Shecautionsthatwhen consumers are anxious, isolated or bored, they may try to ll the void with a trip to the mall.
To avoid shopping pitfalls, here are eight tips for smart retirement shopping:
1 CREATE A NEW BUDGET
Reconsider your priorities, including the possibility of scaling back to a more affordable lifestyle. List essentials and factor in the unexpected—like car repairs—and then calculate your disposable income.
2 STICK TO YOUR SHOPPING LIST
Many stores are designed to encourage impulse buys.
En route to the paper towel aisle, consumers may pass by enticing items, landing at check-out with unplanned purchases like a new TV. Linda, a retired educator, invokes the 24-hour rule and heads home whenever she’s gripped with the urge to buy. “About 99% of the time, I never go back,” she says.
3 BEWARE OF BARGAINS
Retailers lure in bargain hunters with the “great deal.” For retirees on a tight budget, discount havens such as dollar stores may be treacherous—everything is so inexpensive that it’s a license to stock up.
4 DON’T CONFUSE SOCIALIZING WITH SHOPPING
Retirees who feel isolated may head to the store to socialize. Instead, consider more rewarding options that are free—volunteer in your community or join organizations that interest you.
5 DON’T LET STRESS DRIVE SPENDING
Yarrow’s research shows that anxiety can dictate spending, prompting unnecessary austerity or impulse buys. This is especially true for retirees who tend to be more anxious than non-retirees. By following the 24-hour rule, you won’t end up with a budget-busting item that sits in your closet.
6 AVOID MAKING SHOPPING YOUR NEW “JOB”
Yarrow cautions that tracking down an item or best deal may provide a sense of accomplishment, but the more people shop, the more they buy.
7 PICK A FRUGAL SHOPPING COMPANION
Consider the kind of shopper you’re heading to the store with before inviting this person along. If your friend has expensive tastes, you may end up spending more yourself. Linda recalls the time she almost splurged on a pricey item when her thrifty companion announced, “We’ve got to get out of here!”
8 KNOW HOW TO SPOT A GENUINE DEAL
Not all bargains are a spending trap. By comparing prices online, you may nd signi cant savings on everything from airfare to car insurance to housewares. And continue comparing while walking down store aisles. Check out a competitor’s prices on your smartphone, and show the clerk. Many retailers will price-match on the spot to win your sale.
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The opinions voiced in this material are for general information only and are not intended to provide speci c advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your nancial advisor.
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