For most people, downsizing seems like the opposite of progress. It looks like you’re going back because growth is associated with buying a big house and having more in your life.
That’s an old idea.
Downsizing is much better than upsizing. I am not saying; you shouldn’t buy a bigger house; however; a grand villa doesn’t always support your goals. Speaking of money, comfort, and freedom, downsizing a home can be the right decision for you. This article will discuss tips to help you settle in to a new, small and more comfortable house.
Shifting from a big house to a smaller one is a challenging decision. It can give you a fresh start, or you can feel stressed out in the new area.
When searching for your residence, look at the overall community. Spacious work areas, playgrounds, greenery, and social activities can compensate for a limited living space. You can have more freedom without having to have everything in your house. It can be challenging to have a pool in your home. However, you can live in a community that offers the facility of a swimming pool. You can enjoy the activity without having to worry about pool temperature or maintenance.
A house can become congested when you put so many things in it. Before you move, you need to sort out things.
Give yourself time. Getting rid of stuff becomes a challenge when you have accumulated things over time. Remember that joy is not in possession. Life is an experience. Make it a grand one and don’t limit it by sticking to old, unneeded items.
Your time is precious, and so are your thoughts. Protect your mental energy. Consciously decide where you are going to spend your time and money. With the right planning, you can have a beautifully designed home office in one corner of your new residence. You can create a painting section or a music studio. However, for that, you need to let go of certain things. You cannot stick with old patterns to enjoy life on a new plane.
Downsizing can be a right decision, financially. However, you need to calculate the numbers. Let’s look at the pros and cons of this option.
Get rid of debt
Let’s say you have student debt worth $25k, and it carries an interest rate of 6%, and you pay $278 each month. It will take you ten years to pay off the loan. You decide to downsize, and you enjoy lower mortgage payments and maintenance costs. Suppose, each month, you save $400 on mortgage installments. By paying an additional $400 per month, you can pay your student debt in less than three years.
The same goes for credit card debt. If you are in debt, reducing your expenses can go a long way. Sometimes, an additional $200 or $300 can make all the difference.
Enjoy a New Lifestyle
It’s freeing to live in a home that requires less maintenance. Many families enjoy a better time when they live together and share the space for watching TV.
Invest in Future
If you’re free from debt, downsizing can still help you. You can invest the spare funds into your retirement account. Keep adding $500 each month, and in 30 years, you would have $1 million+ in your retirement funds.
Go Without a Mortgage
It is possible that selling your current house can pay for the next home. That’s a great idea. You can live a mortgage-free life.
In some instances, it’s not a wise idea to purchase a smaller home. Consider the condition of your current home.
How much will it cost to sell that house? Calculate the cost of repairs, renovations, moving, taxes, HOA fees, and new mortgage fees. Write down the costs. Does it make sense to purchase a new house?
Only you can tell the answer. It’s possible that downsizing right now is not your best option. In that case, you can consider renting out extra space in your house to get some extra cash.