15 Spending Habits To Break Before Retirement (It’ll Be Worth It)

MANAGE MONEY - BUDGETING
Don't let these spending habits steal your retirement dreams.
Updated Feb. 21, 2024
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When you plan for retirement, you imagine you will finally be able to relax, enjoy life, and reap the rewards of your years of hard work. 

However, achieving a worry-free retirement requires careful financial planning and, most importantly, breaking unhealthy spending habits that can jeopardize your financial security.

Here are 15 common spending habits to break before retirement. The goal is to provide you with actionable steps to stop throwing money away and pave the way for a financially stable and fulfilling retirement.

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Impulsive shopping

chokniti/Adobe senior bearded father and adult son talking

It’s a good idea to avoid making impulsive purchases by evaluating whether you genuinely need an item before buying it. Delaying gratification can help you save money and make more intentional purchases, not to mention saving more for your future.

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Eating out frequently

Joshua Resnick/Adobe couple having fun time eating burgers and drinking beer

Eating out can be convenient and fun, but it’s often much more expensive than cooking and eating at home. Eating at home can save you significant money in the long run. 

So consider cutting back on eating out — you can even explore your culinary skills while you’re at it!

Accumulating credit card debt

THESHOTS.CO/Adobe senior woman shopping with smartphone and credit card

High-interest credit card debt can be financially crippling, especially during retirement when income may be limited and fixed. It’s easy to make a lot of charges on your credit card, but you might not necessarily have the funds to pay. 

Focus on paying off your outstanding balances and avoid carrying unnecessary debt into retirement.

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Ignoring budgeting

Nebojsa/Adobe couple celebrates success in business by throwing papers

Consider creating a budget to gain a better understanding of your spending habits and make necessary adjustments to align with your retirement goals. A budget lets you track your expenses and make more informed financial decisions.

Neglecting retirement contributions

fizkes/Adobe senior couple pensioners check bills using laptop

Saving for retirement should be a top priority. Don't neglect contributing to retirement accounts like a 401(k) or IRA. 

Also, maximize your contributions to take advantage of employer matches and potential tax benefits for the maximum return once you reach retirement age.

Overspending on housing

twinsterphoto/Adobe senior couple from behind looking at front of house

So many people spend a considerable chunk of their income on rent or mortgage payments, but this can be financially dangerous as you age. 

It’s a good idea to downsize your home before retirement to reduce housing expenses, including mortgage payments, property taxes, and maintenance costs. 

Consider whether your current home suits your needs and whether downsizing is viable.

Buying brand-new cars

Мария Кокулина/Adobe aged man buy car with dealer

While getting a new car is nice, why not consider buying reliable, certified pre-owned used cars? 

New cars depreciate rapidly, and the savings from buying used can be redirected toward your retirement savings. This means more cash flow for you when you’re no longer working.

Ignoring discounts and coupons

NanSan/Adobe mature asian woman using credit card

It’s time to change this behavior. Always be on the lookout for discounts, coupons, and promotional offers. 

Utilizing brand loyalty programs to earn points and take advantage of sales to save money on your everyday expenses is a smart move. This could save you hundreds of dollars per year if not more.

Neglecting insurance needs

rocketclips/Adobe asian woman doctor talking to a senior male patient

Sometimes, you might be paying too much for insurance coverage you don’t need. Try to review your insurance coverage regularly to ensure you have adequate protection at a reasonable cost. 

Shopping around for better insurance rates can help you save money, which can be redirected toward retirement savings.

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Overspending on entertainment

xavier gallego morel/Adobe older woman holding popcorn and movie clapper

It’s important to consider how much you’re spending on entertainment activities and find low-cost or free alternatives if needed, particularly as you approach retirement age. 

Enjoying nature, public parks, the beach, and community events can be equally fulfilling without breaking the bank. You might even save enough to put toward other necessary costs.

Paying for unused subscriptions

Serhii/Adobe older businesswoman busy reading a text message

Too many of us are guilty of paying for subscriptions we don’t use. Be sure to assess your subscriptions and cancel any that you no longer use or need. 

Services like streaming platforms, gym memberships, or magazine subscriptions can add up over time, and you could save a lot of money on the ones you scarcely (or never) use.

Impulsive online shopping

fizkes/Adobe woman preparing order for shipping from internet store

It’s too easy to sit around and order items on Amazon.com or other online shopping sites, items that you don’t actually need. 

Online shopping can be convenient, but it's important to avoid impulsive purchases. Add items to your cart, but always give yourself time to reconsider before making a final decision.

Keeping up with the Joneses

ulza/Adobe happy senior woman neighbors friend chatting

This age-old saying means you always try to keep up your appearance compared to your neighbors. That might include buying new cars, taking lavish vacations, or eating out at fancy restaurants. 

Avoid the pressure to keep up with others' lifestyles and spending habits by defining your priorities and focusing on what truly matters to you.

Ignoring energy efficiency

Andrey Popov/Adobe african family watching tv

Not only is this habit bad for the environment, but it’s also bad for your wallet. Energy-efficient habits not only help the environment but also save you a lot of money. 

Think about switching to LED light bulbs, reducing your water consumption, and unplugging electronics when not in use to lower utility bills overall.

Neglecting maintenance

dusanpetkovic1/Adobe businessman in the suit is looking under the car hood

This habit can cause you problems in the long run and cost you more money with surprise repair bills. 

Regularly maintain your belongings, such as appliances and vehicles, to prolong their lifespans and avoid costly repairs or replacements. Taking care of what you already own is a smart financial move.

Bottom line

Monkey Business/Adobe couple in kitchen using laptop and smiling

Remember, it's never too early or too late to start implementing positive changes in your spending habits. By breaking these 15 common spending habits, you can improve your retirement savings and overall well-being.

So, take control of your finances today, break those unhealthy spending patterns, and build a solid foundation for a fulfilling retirement. Your future self will thank you for it.

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Author Details

Adam Palasciano Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.

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