Looking ahead to retirement, I’ve started to let go of some things. Downsizing possessions is something that I’m doing bit by bit. The other step is reducing my expenses and learning to spend less. Both are big tasks, but I’m up to it!
Here’s what I’ve learned so far:
Create a budget
- A budget doesn’t have to be fancy. If you’re comfortable with a virtual version, or spreadsheet that’s great. For me, I write my expenses down each month to help me keep track and I also sometimes use an online tool provided through a financial site. When I really took a look at my expenses, it was eye-opening to see how those small purchases here and there add up to more than you think. So, keep an eye on the little things.
Reduce expenses
- After you create the budget, it makes it easier to get a full view of where your money is being spent and from here you can find ways to reduce those monthly expenses. For example, I finally decided to cut the cord and cancel our high cable expenses. I already subscribe to a few online sites like Netflix and Amazon, but I was still paying a cable bill each month with three cable boxes and the whole thing. It’s been a month since I cancelled the cable and while it’s been an adjustment, it wasn’t hard. I found another service that offered the same channels that I had with cable, at ½ the monthly cost. Cutting the cord is just one example, but there are other services you can consider changing and see how you can save.
Plan “where” you’ll live in retirement
- I always wondered why so many retirees moved to Florida. I assumed it was just for the warm weather, but now I know it was also because Florida doesn’t impose a state income tax, saving those retirees money each year. If you have an option, take a look at locations that offer a lower cost of living, and lower income and property taxes. And don’t limit your options, your next move may just be out of the country! If you decide to move, consider a smaller residence, saving you on heating and cooling bills, furnishings and everything that goes along with maintaining a home.
Downsize your possessions
- If you’re a multi-vehicle household, consider if all vehicles are needed/used. If your vehicle spends most time in the garage or driveway, maybe it’s time to let it go. Think of the savings you’ll gain from reduced gas and insurance. Are you paying for a storage locker/facility? When’s the last time you used anything in storage? Take time to go through and downsize those items allowing you to cancel or use a smaller storage space. And once you retire will you really need all your work clothes? Probably not. Take a look at things you can donate to give them new life.
What steps are you taking to prepare for retirement? Share in the comments.