Whether you are currently retired or saving up for your new lifestyle away from work, it’s essential to realize that housing is one of your biggest capital outlays.
Home Sweet Home
If you can modify this area of your retirement planning, you will have more cash to put towards other valuable areas of your life, perhaps pursuing a passion, putting aside money for grandchildren or freeing you up for longer travel stays.
If you have never considered this area of your household budget before, this simple exercise will help clarify this for you.
How much is your housing budget?
In order to figure out how much – per day – that your home or lodging is costing you, add up your mortgage payment, your house insurance, and your property taxes for 12 months.
Add to that figure, the amount of any upgrades you have made to the home in this past year or 12-month period (new flooring, new paint, new draperies, kitchen/bathroom re-dos, new rugs, new sheets, towels, extra sets of dishes and flatware, tree pruning, yearly flower plantings, housekeeping services, gardeners, pool services, maintenance and repairs, the new deck you just added on, … etc.)
Yep, all of it.
Total that annual expense number then divide by 365 days. That figure is what your current housing situation is costing you per day.
Insurance, property taxes, and maintenance costs add up!
This is very valuable information to you because – if nothing else – it puts this category into perspective for you.
Lots of Options Available
Fortunately, there are many different housing choices in retirement or you can make this decision earlier in order to save money for your life of Financial Independence.
Smalling up, downsizing, renting an apartment/condo, doing an AirBnB room or section of a home for added income, taking on a roommate, moving to an Active Adult community, house swapping for travel, house sitting for travel, moving to a tax friendly state, living on a sailing vessel or houseboat, or choosing to RV as a housing choice are ALL options open to you.
Did your Housing Cost Per Day surprise you?
Feel free to write to me at TheGuide@RetireEarlyLifestyle.com and let me know your thoughts!