Many people dream of retiring early, but few know how to make it happen. One key element to retiring early is downsizing – getting rid of unnecessary belongings and living a simpler life. This process can be a challenge for many people, but it is important to remember that the goal is to retire early and enjoy your golden years. With that in mind, here are a few tips for downsizing is key so you can retire sooner rather than later.
The Distance Between Point A and Point B- Downsizing is Key
You know you want to retire early, but you are not sure if you can afford it. First, you can’t know how to get where you want to go unless you know where you are now. Take some time looking at your current assets and current debt.
Next, decide on how you want your retirement to look. Do you want to live at your current address? Do you want to move somewhere that is closer to your kids? Do you want to travel the world or become a full-time RV’r and hit the open road?
Once you know where you’re at and where you want to be – whether that’s Texas, California, or even the Caribbean – you can make a plan.
Bridging the Gap
If you are looking to build up your nest egg with more liquid assets, then downsizing may be your next step. And by starting the process now, you won’t feel overwhelmed when you make the transition from the workforce to retirement.
Does moving into a smaller home make good financial sense at this time? If your children no longer live at home, living in a house with less square footage may help lower your monthly expenses. You may be able to eliminate a large mortgage payment and reduce the cost of gas and electricity. And a smaller house could also help lower your school and property taxes.
Whether or not you decide to downsize your home, now would be a good time to downsize in terms of your personal belongings. Once you start taking inventory of assets you have in your household, you might be surprised to find some real gems in the mix. For instance, you could come upon a set of vintage earrings that fetch a far higher price than you ever imagined. There is no telling what you might find while treasure hunting in the attic or basement. Anything you see to further your cause to retire early is worth a second look when it comes to securing your early retirement.
Review your property, vehicle, and health insurance to see if you can downsize your premiums. If you have an emergency fund with enough money to cover a higher deductible, you may see a 40% savings in premiums by increasing your deductible from $250 to $1000.
Downsize your debt. If you are making a car payment or carrying a balance on your credit cards, make it a priority to pay them off. Not only are you eliminating another monthly payment, but you will also save hundreds of dollars in interest. Now that’s not to say that you won’t take out a loan or use a credit card ever again. Let’s say you retire in the Lone Star State. Should you find yourself in a sudden bind after retirement, you can always look around online at Texas instalment loans and find one that meets your needs. The same goes for California, Utah, and just about any other state. In fact, you could probably even find a loan option in the Caribbean if you’re lucky enough to retire there!
Take a look at your subscriptions. Hulu, Netflix, Spotify, phone apps, and magazines may seem like a small amount of your monthly expenses when taken individually. Still, if you add them up, you will discover that you may be paying between $50 and $100 each month.
Downsizing can be a challenge for many people, but it is important to remember that the goal is to retire early and enjoy your golden years. If you are finding it difficult to let go of your possessions, start small and take things one step at a time. Remind yourself that the earlier you retire, the more time you will have to spend doing what you love!
So, if you want to retire early, start downsizing your life. It won’t be easy, but it will be worth it in the end. Remember to focus on what’s important and let go of the rest. Do you have any tips for downsizing that we missed? Let us know in the comments below!