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In a world of where there is a preconceived notion that “bigger is better”, most homeowners underestimate or don’t understand the advantages of downsizing to a smaller home. For many soon-to-be retirees and “empty nesters”, their large home is just too much for them to handle. And since the children are gone, downsizing or even going back to renting can be viable way to save money and to have a more manageable home. But you don’t have to be ready to retire to downsize. Downsizing your lifestyle as a whole, even when you have a family or if you’re a young couple, can be a great way to save money, cut expenses and live simpler. Ever since the markets have been struggling, more and more people are turning to renting or smaller homes as a way to save money and be more financially efficient.
Like stated above, there are many reasons for downsizing. If you’re considering downsizing, then here are some of the reasons why you might:
Retiring soon: The house you have lived in for years is just too big for you, and you can’t afford to use so much effort and money maintaining it. Moving into a smaller home, an apartment or a condo can be a way to cut down on the space and make living a bit more comfortable.
“Empty Nester”: The day has come. Your children have all moved out and you’re feeling pretty empty and down. You may be suffering something called “empty nest” syndrome, and it’s perfectly fine. You probably don’t need the home that you’re currently living in, and you and your partner, instead, can enjoy something a bit more manageable.
Change in income/ tight financial situation: Feel like you’re paying too much? Loss a bit of income? If you’re feeling the squeeze of a declining economy or you’re just not doing too hot financially, then a great way to immediately cut costs is to downgrade to a smaller home. This shouldn't be a shameful decision – a lot of people decide to downsize and most of the time it’s the responsible thing to do. Plus, you may like your new lifestyle.
Want to live a simpler lifestyle: There have been many success stories of previous homeowners who cut down their life dramatically, not because they had to, but because they wanted to. They didn't just move into a smaller place, but also cut down on their spending, their consumption and their belongings.
Travel a lot: If you have a job that requires you to travel for long periods at a time, then having a smaller place is probably the best bet to save money.
To avoid that tedious commute: Spending way too much on gas? Moving to a smaller property that is closer to your place of employment, then you could save some money.
There are a lot of benefits for downsizing to a more affordable home. The obvious advantages have to do with money and how much of it you will save. If you were to go to a smaller home, or decide to rent an apartment instead, here are some of the ways you’ll save money:
A smaller mortgage: If you decided to downsize, you’re obviously going to have a smaller mortgage loan. This can be definitely better because you could also put down a larger down payment. Once you pay off the home you have more freedom to spend money on what you would like to spend it on.
Cheaper taxes: With a smaller property, you’re most likely to spend less on your property taxes.
Cheaper Utilities: To heat or cool a smaller home won’t cost as much. Also, you may be able to save on electricity costs because you’ll have less space to light up and use.
Less maintenance: Vacuum less, mow less and shovel less. Don’t worry about breaking your back any more.
Renting: Most people believe that renting is not a good option, especially if you’re a bit older. For some reason, renting has become frowned upon and seen as an inferior form of residence. Especially if you’re tight for cash, renting an apartment or a home is a great way to save lots of money until you have enough for a full mortgage. Buying a home in today’s market doesn't guarantee you that you’ll save more money in the long run, and home values are not necessarily going up.
There’s nothing wrong with downsizing to a smaller and more affordable home. For many, it can be a good financial decision that will enable you to save more money in the long run. With all the money saved up, that vacation to the Bahamas or Europe looks more like a possibility, doesn't it?