The upside to downsizing
Moving into a smaller space is a common activity for seniors and empty nesters, as they simplify their lives in their retirement. But with the costs of homeownership (not to mention all of that stuff to clean) selecting a smaller space is not just the domain of the retiree.
Does it make sense, financially and otherwise, to downsize your home?
Less mortgage, more money
With the persistence of ultra-low interest rates, the emphasis seems to have been on getting more house for less money. However, if you got a smaller house (and ergo a smaller mortgage) at these low rates, that would mean more money for other things.
What else is on your financial wish list? Pay off other debt? Travel more? Perhaps your big dream home (and big mortgage) has been crushing your other dreams without you even knowing it.
Optimize your space
You may think that there is no way you’d be able to fit your family and all of your stuff into a smaller space. Well, guess what, chances are you don’t need all of that stuff anyways (I’m talking about your belongings, not your family). Downsizing means decluttering. Permanently.
Living smaller means living smarter; smaller spaces call for greater organization skill- which is only going to make life easier (and happier) for everyone.
Cost pros and cons
In addition to the savings you’ll rack up with a lower mortgage payment, a smaller house costs less to run. We’re talking lower utility bills! We’re talking more money in your wallet!
However, make sure (or at least consider) other costs that you might be taking on as you are downsizing- to keep the balance (especially if cost savings is your main motivation). For instance, if you are swapping your single family home for a condo or townhouse, you’ll be looking at paying maintenance fees.