If you know well in advance that you will be downsizing, don’t wait. Start the process today.
By starting early, you’ll facilitate the process, you’ll also have more time to sell large, valuable items for a better price, and you’ll be less stressed out.
To begin, grab a notebook or note-taking app, and start taking inventory of ALL of your belongings.
As you take inventory, make sure you take lots of pictures too. Not only will these help you remember all the things you have around the house, but the pictures can also be used to preserve memories of precious items you may need to get rid of.
Once you’ve taken inventory, highlight those items that your friends and family members have “stored” in your home, as well as large heirloom items you planned on passing on to family members.
Next, start calling your friends and family members and ask them to pick up their possessions. And if you were planning on willing large and bulky heirlooms, such as a grandfather clock, consider gifting them now.
Next, start going through all of your archived documents. Store away important ones such as deeds, wills, power of attorneys, passports, military records, etc. Keep them safely stored away in a safe or secure file cabinet, and let a trusted family member know where they’re located.
Shred and/or burn documents you don’t need, such as old canceled checks, receipts, magazines, bank statements, etc. If you find a document you’re not sure whether you should get rid of, consult your tax attorney.
If you have more than one vehicle, consider keeping just one. Besides downsizing to a smaller home, getting rid of a vehicle (or all of them) could lead to large monetary savings.
In fact, according to AAA, if you factor in depreciation, fuel, insurance, and other car ownership expenses, it costs around $8,558 a year to own an average sedan in the US.
If you and your spouse are retired, you may be able to get by fine with just one car, and supplementing its usage with public transportation. And depending on where you’re moving to, you may not even really NEED to own a car.
If getting rid of vehicles isn’t an option, consider downgrading to more affordable ones with better fuel efficiency.
Lastly, pay off your debt as quickly as possible (the waterfall payment method is a time tested strategy to get rid of credit cards and other bad debt).
And for ANY expense you need to have in the future (there will be many when it's time to actually move), live by this old school rule: if you can’t pay for it in full right now, you can’t afford it.