Thinking About Downsizing?

Before you do anything else, do your homework!

Downsizing isn’t just about the physical home that you live in. It’s about lifestyle. Do you like to entertain a lot? A smaller home with no dining room might not work for you. Are you sure that you’re done having children? You don’t want to find yourself short of space all of a sudden, right when you need it. Can you live with less ‘stuff’? If shopping is your passion, it might be hard to find a place for all of your acquisitions!

Ultimately, downsizing your home means downsizing your possessions too. You might not be able to fit the five piece dining room set with twelve chairs in your new bungalow. And if you’re going from a house to a condo or apartment, it’s an even bigger move. It’s entirely possible that the furnishing that suited your house so well will look outlandish and over sized in a small condo. It could be a question of selling / giving away pieces so that you can replace them with condo-sized pieces.

Which brings us to the first con…

CON: if you’re downsizing, there will be hard decisions ahead

If the point of downsizing is to save money, consider how much of what you own you’ll have to dispose of, re-home, pay to store or sell? The reality is that even though you paid $3000 for that leather sofa, you aren’t getting that selling it online. If you even get a third of your original cost, you’re doing well.

Condo buildings often have storage units but these aren’t huge and shouldn’t be relied upon to hold anything that you just can’t part with. So be prepared to pay extra for storage if you want to keep your things.

You may also find that moving to an apartment, condo or some kind of independent living facility will also change your daily routine. Rambling around a big old house that has provided comfort and security for many years is not the same as now living in a small space with just the necessities. These type of living quarters are based around a lot happening away from your “place”. Are you ready or willing to change your life that much? The alternative is to be stuck in tight quarters wondering why you ever moved.

PRO: Save money… and invest in the future

Downsizing to a smaller home will bring financial savings, assuming you can let go of your ‘stuff’. Like what? Home and contents insurance, utilities, maintenance, taxes will likely all be less in a home that occupies a smaller footprint. You might even have the option to live mortgage-free in a smaller space, freeing up a big chunk of your monthly budget.

Don’t forget that a smaller home is probably less expensive, so there is the initial cost itself which could leave you with cash in your pocket a the end of the transaction. For many, renting in later years is actually an economically sound choice, freeing up the cash from the sale of your home and the equity you built into it for other things, like traveling.

They say that many Americans don’t have enough retirement savings and some are just a paycheck away from bankruptcy, with too much debt. Many others are house rich, but cash poor, leaving them no leeway in an emergency. What would happen if you suddenly couldn’t work for six months? Downsizing and freeing up some cash would allow you to invest in yourself, your retirement, your children’s education or even just to travel and enjoy your life a little more. Sounds worth it, doesn’t it?

CON: A smaller space can be too big a change

What if travel isn’t your thing and you are a true homebody? Depending on your priorities, downsizing might end up removing from your life things that you enjoy immensely, diminishing your quality of life to some degree. Think for example of your garden. Do you love to potter around in the spring, summer and fall, pulling weeds and planting annuals? Downsizing to a condo, for example, would mean losing that favorite activity. Sure, you can do a little bit of balcony gardening, but it’s not really on the same scale.

If you’re used to entertaining family and friends regularly, losing the extra space could mean downsizing those efforts too, which might put a real dent in your social happiness.

PRO: Save time and effort

A bigger home and property are just more work. There are more rooms to keep neat and tidy, more spaces to keep clean, more yard to manage every year, more shoveling potentially ever winter.

Downsizing means you can keep to your standards on cleanliness without taking nearly as much time to get it done. That frees up more time for the other activities in your life that you would rather spend time on.

CON: Downsizing tends to be a one way ticket

Once you’ve downsized, it’s hard to change back up again to a bigger space. Unless you’ve got cash built up and stellar credit, the equity in a smaller home will make it harder to up size. If you’re already in the home of your dreams, but are struggling a little with keeping it up, see if there are other ways you can be more thrifty before downsizing. When you add in the costs of moving, downsizing can prove to be too high a price to pay.

PRO: Help the environment

How does downsizing help the environment? In a couple of ways. First, you have a smaller footprint on the environment when you live in a smaller home with less stuff, less packaging, less garbage and so on.

In addition, downsizing might afford you the opportunity to make choices in your new home that are more ecologically friendly, such as investing in solar panels to help you get off the electricity grid, saving on your bills for years to come.

However you look at it, there are positives and negatives that are important to consider but if downsizing is right for you, whatever your time of life, go for it and enjoy the rewards of less effort, less expense and hopefully less stress!