Simon Read: Advice to a pensioner living beyond her means

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The Independent Online

Dear Ma'am, So you're facing a financial crisis? You're not the only pensioner in Britain today who has discovered that a retirement nest egg doesn't go very far.

You need to tighten your belt, but where? My advice? First of all, write down what you spend your money on and then ask yourself whether you really need all the things you're buying.

Be honest. Write down every crafty packet of fags and bar of chocolate. These items can soon mount up and you may be surprised how much you're spending.

Start a spending diary for a week and then times the total by four. If you have trouble with the calculation, ask one of the younger members of your family to help. (Actually, in your case, that might not be such a good idea.)

You don't have to do away with all the pleasures but cutting back on luxuries can really reduce your expenditure.

Check your regular shopping bills. I see that you spend around half a million on food a year, for instance. If you switched the weekly shop to Lidl or Netto now and again you could save a packet. Keep an eye out for multi-buy offers.

You must look at the amount of energy you use in your homes. Turning off gas and electricity when you're not in residence could slash your annual bills and you could also save by switching to a dual-fuel tariff. Invest in a thick blanket.

And do you need to do so much entertaining? You spent £600,000 on garden parties last year but, let's face it, you could cut back on the canapés and sparkling wine. I'm sure your guests would be happy with fish paste sarnies and boxed wine once they realise how tight things are for you – after all, no one likes to see a pensioner in penury. In fact, why not make your parties bring-a-bottle? They can be such fun.

Other ways to cut costs include switching bank accounts. Coutts may not offer a basic account but most other high street banks do, and you'll find there are no charges. There's also no overdraft facility which could help if you're tempted to overspend in the future.

Finally, have you thought of selling a few things to raise extra cash? You own a lot of jewellery you've haven't worn for a while and could pop it in an envelope and get cash back by return.

Simon Read is the Independdent's Personal Finance Editor