In a nation obsessed with everything “biggie-sized,” the thought of downsizing holds as much appeal as a root canal.
We just love big things. Texans boast about the size of their state, but Alaska has bigger bragging rights, at more than twice the size of the Lone Star state. Even our national monuments speak volumes about our size-consciousness. Think Mount Rushmore: The colossal sculptures of the four presidential busts are 60 feet tall.
So to suggest that we trade in a Cadillac Fleetwood for a Smart car or move from a five-bedroom Victorian into a two-bedroom condo (sans garage) is akin to cultural heresy.
But for many retirees, downsizing isn’t an option — it’s a necessary survival strategy that could stretch your savings to the end zone of retirement. All it takes is one or two unfortunate life events to throw one’s retirement plans into a tailspin.
Consider these tips to trim the fat from your budget and boost your bottom line.
Scale back without feeling deprived
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Chuck the second car
Selling that extra vehicle wrapped in the car cover seems like an obvious way to save some money. But parting with old Betsy can be painful for some.
“There is some ego involved in this,” CFP Connie Stone says. “Some people can get past it, some people can’t.”
Depending on the age, model and condition of your car, you could net several thousand dollars that can go into a savings or investment account. Check Kelley Blue Book, Edmunds.com and other reliable sources to determine a good selling price.
By selling the extra car, you’d also save on insurance and gasoline.
Evaluate your driving needs and decide whether a less expensive car can accomplish the same thing as a luxury sport utility vehicle.
“Instead of spending $35,000, you can spend $15,000 on a decent car that will get you from point A to point B,” says CFA Kevin Reardon.
It’s an issue of budget and willingness to downsize.
“Cars today can go 12 to15 years if cared for properly,” Reardon says.
Stone says to find a reputable used car dealer if you can’t afford a new car.
“As long as you’re buying a quality car that’s been checked out and has a warranty, that’s one way of saving money,” she says.
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