When we started looking for ways to trim the fat from our budget so we could retire early, it made sense to begin with one of our biggest expenses...housing. The following are some questions that are worth considering:
Insurance - Is your house over insured? Determine the replacement cost of your home to see if it is possible to reduce your insurance premiums.
Taxes - Is the assessed value of your home for real estate taxes accurate? Due to declining home values, many people have been able to successfully challenge the assessed valuation and lower their property taxes.
Maintenance and repair expenses - Taking into account your previous expenses, try to determine what your average costs will be to maintain your home in the future. This can be highly variable from year to year and is very difficult to estimate, but is an area that still needs to be analyzed. How many years are left on your roof and HVAC system? Are their ways to extend the life of your appliances, water heater, etc? Do you have any handyman skills that you could put to work when you are no longer tied to your job? Will you be able to reduce ongoing housing costs by using some of your early retirement free time maintaining your property and possessions?
If you lived in a smaller home, how much would your annual savings be? What about a condo? They tend to be less expensive, but don't forget to factor in condo dues that include grass cutting and other services that you could do for yourself when retired.
How much cheaper would it be living in a smaller town where home valuations were lower and therefore lower property taxes and insurance?
By taking an analytical look at your expenses, you can start to see new ways that you may be able to reduce your early retirement budget.