3 September 2019

Downsizing is an attractive prospect for many – but how do you go about decluttering and downsizing everything in your life? With a long life so rich in events and memories, we can accumulate a lot of baggage – literally and metaphorically. Getting rid of the baggage can free up your mind, your space, and even better – your finances.

Our survey, in collaboration with LJ Hooker, showed that 35.2% of people over 50 are looking to downsize and a further 31.1% said they would downsize in the future (of 865 participants, in 2017.)

Here are five ways to downsize your life; and save time and money in the process.

  1. Get rid of material goods you don’t use

CDs, DVDs, vinyl – why do you have these lying around? With streaming services such as Spotify and Netflix giving you limitless listening and viewing options on demand, there is no need for old media to clutter up your space. If you have entire rooms dedicated to furniture and clothes you never use, it’s time you rang up the Salvos (or another favourite charity) and donated the lot to someone who will get use out of it.

  1. Pay off your debts

Paying off little debts such as credit cards, personal loans, or even your mortgage can make a big difference to your life – not only in terms of decluttering your finances but decluttering your mind. Taking a proactive approach by sinking more money into debt control can give you peace of mind – there’s nothing like feeling the weight of debt being lifted off you once it’s done.

  1. Clear up your life insurance policies

Post-retirement, life insurance can prove costly. Income protection insurance and total and permanent disability insurance may not make financial sense post-retirement, as premiums will climb higher and higher every year. “Make sure you talk to a broker to review your life insurance policies, and cut out what you don’t need,” says insurance expert and Savvy CEO Bill Tsouvalas. “Some extras may be worthless to you – especially if you’re a self-funded retiree.”

  1. Moving somewhere smaller

Once you’ve got rid of some of your stuff and got your finances in better order, it might be time to downsize your home. If you’re an “empty nester” with three or four bedrooms going unused and not commuting as often as you once did, moving to the regions or outer suburbs and into a smaller home can save on costs. If you choose to rent out or sell your former home, you can use the surplus capital to invest and make your retirement more comfortable. If you still have debts, you could pay these off in one fell swoop, depending on what’s owed and the sale price of your home.

  1. The final cull: get rid of things that are neither useful nor beautiful

Father of the arts and crafts movement in Victorian-era England William Morris once said, “Have nothing in your house that you do not know to be useful or believe to be beautiful." If you have items that have no purpose and don’t make you think, reflect, or admire their being there, get rid of it. If your paintings seem dull, ditch them. If there’s a cigar cutter in your drawer and you haven’t lit a Montecristo up since your kids were born, get rid of it. There are more items in your home that aren’t as useful or beautiful as you think.

This article is contributed by Savvy, Australia’s leading financial brokerage institution and one of the BRW’s fastest growing companies in 2015. Visit www.savvy.com.au for more info.

The article has been prepared without taking into account your personal objectives, financial situation or needs.

Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.