Downsizing is a very common practice among those preparing for or living in retirement; it can dramatically reduce your cost of living, help you beef up your retirement savings and often make you happier in the process.
For my book, “How to Retire the Cheapskate Way,” I interviewed hundreds of frugal folks who retired early and on significantly less than most people think is possible. I discovered that they often have their own special twist on downsizing, a practice that I dubbed “simple-sizing.”
Related: The Truth About Retirement No Expert Will Tell You
What Is Simple-Sizing?
Simple-sizing is making the conscious decision whenever possible to purchase the simplest item or seek the simplest solution to the myriad spending decisions that confront us every day. And the “cheapskates” who are able to retire earlier and happier than most Americans keep things simple throughout their lives, not just when they’re retired or on the cusp of retiring.
By always choosing the simplest option that meets your needs — from a smaller house, to a car without automatic windows, to a computer without so many bells and whistles — you usually save a bunch of money on the purchase, operation and repairs. Plus, a simpler, less complicated lifestyle will probably ease your stress and make you happier.
Although I take credit for coining the term “simple-sizing,” the idea is, of course, not new. In fact, here’s what a fellow frugalista wrote about the topic more than 150 years ago:
“Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail.” — Henry David Thoreau, “Walden”
Read: Here’s How Much Money You Really Need to Retire
How to Simple-Size
If you’d like to act on Henry David’s sage advice but you’re overwhelmed with all of the stuff already cluttering up your life, you’re not alone. Even though the size of the average American home has more than doubled over the last 50 years, according to NPR, 10 percent of American households rent offsite storage space to house all their extra stuff. In fact, we have so many surplus possessions that we currently rent more than seven square feet of storage space for every man, woman and child living in the U.S., per The New York Times.
Join the KonMari Movement
The place to start simple-sizing is with an inventory — and a selective purging — of things you already own. Join the KonMari craze sweeping homes (literally) across America. Based on the best-selling book by Japanese cleaning consultant Marie Kondo, “The Life-Changing Magic of Tidying Up,” the KonMari method of home decluttering focuses on organizing and minimizing your possessions by “category” (e.g., papers, clothing, etc.) rather than by room.
In contemplating whether to keep an item — or buy it in the first place — the author encourages you to consider whether it “sparks joy” in your life. As a result of adopting this philosophy, Kondo promises that you’ll not only get organized, but you’ll stay that way.
Figure Out What You Actually Need
Along somewhat the same lines, here’s the thought process I developed for decluttering and simple-sizing for my retirement book:
- Do I really still need or want this thing (whatever it is)?
- When was the last time I actually used or appreciated this?
- What would happen if I woke up tomorrow and I no longer owned this? Would that make me happy or sad?
- Do I know someone who would appreciate and benefit from owning/using this more than I do?
- Is this worth selling or trading for something that is of more value to me at this point in my life?
- How much is it costing me to continue to own this (to maintain it, insure it, store it, etc.)?
- Given the remote possibility that I might not live forever, what’s going to happen to this after I die? Will it be kept and valued by someone I know, or will it be sold or thrown away? Will it be more of a blessing or more of a burden to someone if I still own this on the day that I depart for the big Dollar Store in the sky?
Take a Home Inventory
Another good way to start taking stock of your possessions and ultimately simplify your life is to create a formal household inventory of at least the major and most valuable items you own. Not only is this a useful way to figure out what you can liquidate to pad your retirement nest egg, but a household inventory with a current-market appraisal of your major possessions is important for insurance purposes and estate planning, as well.
This website, sponsored by the Insurance Information Institute, offers a free program with software that allows you to inventory items by each room in your house, recording their value, pictures, serial/model number and so on. Many insurance companies offer similar programs to their policy holders.
Related: Why Paying for a Storage Unit Is Always a Terrible Idea
The Risks of Not Simple-Sizing
As I’m fond of telling my wife, “Whenever I don’t listen to my own advice, I’m always reminded of just how brilliant I truly am.” A case in point happened a couple of years ago when I went shopping for a new computer. Forgetting my advice about simple-sizing and always buying the most basic product that meets your needs, I got talked into a more elaborate, more expensive computer than I intended to buy or needed. It even had a touch-screen monitor, which I knew I’d never use and, in fact, never did.
Since we only have one computer at our house, and it’s located in my office-cum-garage, my wife often retreats to my office after I turn in for the night to check her email and surf the web. Over the course of a few weeks, I was getting increasingly agitated with her for altering the precious writing documents I left open on the computer and changing various computer settings when she used the machine at night. She denied any culpability, but I doubted her innocence.
Then, one morning, I went out to my office early, before it was light, and I discovered the true computer-changing culprits: Moths and mosquitos, attracted by the glow of the computer monitor, were randomly flying into the touch-screen, occasionally with enough power and accuracy to make changes of their own!
A computer-savvy friend of mine showed me how to adjust the settings to make the screen less sensitive, but on second thought, I decided that the moths were writing some pretty good stuff, so I left it unchanged.
Simplify, simplify!
This article originally appeared on GOBankingRates.com: How “Simple-Sizing” Your Life Will Fix Your Retirement Plan
This article by Jeff Yeager first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.
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