SpendMoneyInRetirementAfter years of working and saving, retirement can sometimes be a difficult adjustment, especially for your budget.

Once you’re no longer bringing in a paycheck from an employer, you’ll have to rely on Social Security and retirement savings as your main sources of income. While your expenses will change (you may spend less on a daily commute and more on adventurous travel, for example), most of your budget categories will look similar to what they were before you retired. You’ll just have to adjust the numbers, accordingly.

There is no magic formula when it comes to figuring out how to manage your money. While every person’s situation is unique, generally speaking, it boils down to this simple rule of thumb: The less you spend, the better.

Save on housing expenses after retiring

As you are preparing for retirement, the less debt you have, the better off you are likely to be, financially. Housing expenses, particularly if you’re still making a mortgage payment or paying rent, will typically take up the largest percentage of your outgoing cash flow. A great goal is to retire without a mortgage or rental payments, but that’s not always possible.

If you still have a mortgage, you might consider downsizing a little. Downsizing doesn’t necessarily mean moving into a smaller place. Instead, it could mean finding a place to live that’s more energy efficient, in a more affordable neighborhood, or in a new location with lower property taxes.

You may also want to look into refinancing to reduce your monthly payment as another way to manage your cash flow.

Save on transportation costs

Transportation is typically the second-highest household expense after housing. If you’re a multi-car family, you may want to crunch the numbers and see how much money you could save if you went down to one car. Not only could it likely result in lower taxes, insurance, and maintenance fees, but it may also lead to one less car payment.

You can reduce your transportation costs further by moving closer to family as well as shopping, restaurants, and other amenities.

Manage healthcare cost

Healthcare costs could take up a large portion of your budget, but may be tricky to predetermine because they depend on a number of variable factors: how healthy (or maybe not so healthy) you are for example, or whether or not you will be receiving any type of employer funded retirement benefits.

The good news is if you are 65 or older Medicare may cover some healthcare costs.

In addition to Medicare, you might choose to pay for a Medigap policy (a supplemental insurance policy sold by a private company) that may help with some costs your Medicare policy may not cover, such as coinsurance, copayments, and deductibles. Keep in mind though that Medigap policies do not cover dental or vision care, hearing aids, eyeglasses, or private-duty nursing, so you need to make sure you are budgeting for those items should the need arise.

Manage your hobbies to manage your money

I don’t know many retired people who just sit inside all day watching television. They all know how to have fun and enjoy life while keeping their daily expenses down.

Take traveling, for example. When you’re retired, your schedule can be more flexible, which is definitely key when trying to save on travel costs. Consider traveling mid-week or in the off-peak season. Traveling across the country? Try taking the train, which can sometimes be cheaper than flying, especially over a long distance. Save on hotels by staying with family (although try not to wear out your welcome).

As for hobbies, I’ve seen many people successfully supplement their income by doing something they love, whether it’s crafts or woodworking.

Finally, consider volunteering for a group or an organization that you care about. Giving back can afford you the opportunity to feel good and to make a difference, which are things that money can’t buy.

Steve Repak is a CERTIFIED FINANCIAL PLANNER™ professional, CFP® Board Ambassador, and financial literacy speaker. He is also an Army veteran and the author of Dollars & Uncommon Sense: Basic Training For Your Money. Follow him on Twitter: @SteveRepak