If you are thinking about downsizing, you should know that there are many benefits to this process.
Downsizing can allow you to save money with its many financial advantages, as well as grant you more lifestyle benefits such as freedom and flexibility. Downsizing is ideal if you are approaching retirement, a parent whose children have grown up and left home or if you have realized that you have too much space in your home. If you are considering downsizing and fit into one of these categories, it is best to know what there is to gain from this process. To learn more about the benefits of downsizing and more, refer to the sections below.
If you are looking to embrace a simpler lifestyle with reduced living expenses, downsizing can be beneficial. You can eliminate what you do not need or value by downsizing. Downsizing can be hard emotionally, but it does not have to be seen as parting with precious memories. It should be viewed as starting a new chapter or phase of your life. A phase that involves less stress and is more relaxing.
Decluttering can be overwhelming when downsizing but it is necessary so that you can stay organized while moving. While decluttering, decide which items are important to you and which items you can do without. You are the only one who will know which items hold sentimental value to you and which you can dispose of. To make this process less complicated, reduce the clutter in your home by giving it away or donating it to the less fortunate.
Categorize these items so that you know what to keep, give to relatives, sell, donate, recycle and take to the trash. Keep the items you cherish. If you value any items, but know you do not need them, give them to your family members for them to enjoy. If your items have value and are worth selling, consider selling them at a yard sell, on Craigslist or Ebay. Donating things to your favorite charity is another way to ensure that your items are not going to waste. Lastly, dispose of any items that you see no purpose in.
By downsizing, you are creating room for more financial freedom. Reducing costs is another benefit to downsizing, whether it is through mortgage payments, less real estate taxes, lower utility costs, lower insurance costs or lower maintenance costs. These reductions all lead to extensive savings for you. With these savings, you will have extra money available to use as you see fit.
When you consider downsizing, you could lower your debt or even eliminate it altogether. If you have student loans that you want to pay off, downsizing will allow you to put more money towards paying it off sooner than planned. Downsizing can also play a part in saving for retirement. It is ideal for 15% of your income to go towards retirement. Going from a large living space to a smaller one will allow you to put more money into that cause. In addition to your mortgage potentially being lower, you can expect your energy bills and property taxes to be lower as well. Your property taxes are based on the value of your home and are included in your monthly payments. This means that once you move into a smaller home, the outflow of money being spent will be less than your original payments. Moving into a smaller space typically brings lower utility costs. With typical utility costs ranging from $200 to $400, a smaller home tends to have costs at the lower end of the range.
A major advantage to downsizing from a large home to a smaller one is the amount of maintenance that a smaller house needs. While you will still have chores around the house and outside, they will not typically be as time consuming in a small house. There will be less indoor chores to manage, as well, because the house has less surface area.
Depending on where you are moving, sometimes the maintenance of outside tasks will be done for you. If you are planning to downsize to an apartment or a senior living residence, maintenance will be taken care of by landlords and management, inevitably eliminating any fees you would normally be paying for maintenance when living in a home. If you are older, having little to no responsibility in regard to home maintenance can be a very good thing. If you are considering moving to a smaller location and you are over 60 years old, you should look into finding a home in a community that has a homeowners’ association. Associations typically have maintenance that includes yard care and exterior work.
Other benefits to downsizing can influence your wellbeing. Moving into a smaller space can be freeing and allow you the opportunity to live in a more close-knit community. Townhouses and condos are options that separate other neighbors from you by a wall. By living in these areas, you will have the opportunity to make new friends and take advantage of activities within your living community.
Another advantage to downsizing is having less furniture. Large furniture pieces can overcrowd a small space. When you move into a smaller space, you can get rid of a lot of your furniture to make your space less overwhelming.
Before downsizing, you should consider all of the financial aspects of your move and how you will budget for them. Ask yourself a few questions before making the decisions. One question to ask yourself is how this move will affect your budget. Your budget is not just what you are paying for the new house and how much the old house is selling for. You have to factor in the costs of having your things moved to your new house or apartment if you are moving far away. Your budget should also include some short-term financing plans to cover housing in the case that you have not found a new house, but have already sold yours. Making these considerations before downsizing will make your move less stressful.