Things to consider when downsizing homes

Downsizing is a big decision, so give yourself plenty of time to think about how your life may be impacted and your lifestyle may need to be adjusted as you weigh all the potential benefits and drawbacks of moving to a smaller place.

Benefits of downsizing:

Reduce your expenses

Moving to a smaller place might help reduce your expenses on things such as your rent or mortgage payments, your insurance premiums and your utility bills.

Increase your cash flow

If you move into a place that’s more affordable, you may have more money left over each month that you can put into your savings, use to pay down some debt or spend on more of the things you enjoy, like massages or dining out.

Put some money in your pocket

You may be able to make money by selling your house or some belongings. For instance, since you’ll be moving to a smaller place, you may not have room for large furniture pieces.

Free up your time

Smaller spaces may require less of your time to clean and maintain. Moving into a smaller place can help free up your time so you can spend more time doing the things you enjoy, like getting together with friends and family or traveling.

Reduce some clutter

Another good thing about moving into a smaller space is that it might help you reduce some unnecessary clutter so you can focus on enjoying the things that matter to you most.

Add more convenience

Sometimes smaller living spaces can offer more flexibility in location and access to amenities such as walkable destinations, cultural venues, shops, restaurants and more. And depending on the location you choose, you may find some additional savings in both time and money spent on transportation.

Drawbacks of downsizing:

Lose some of your space

Obviously, if you decide to downsize, that means you’ll have less space available than you’re used to, which may require you to make some adjustments in your life, depending on your lifestyle.

Do you regularly host parties? Do you have pets? Do you like to garden? Moving to a smaller place may mean that you’ll need to find alternative places to do some of the things you’re used to doing at home like entertaining, having overnight guests, working from home or letting the dog out the back door to run around in the yard. You may also need to find an additional storage facility to store some of your belongings if not everything fits in your new place.

Add new expenses

Although you may find some cost savings, there may also be some additional costs you could incur. For example, if you decide to move into a condo, you may find that you’ll have to pay condo association fees. Or maybe you currently use your own fitness equipment at home that won’t fit in a smaller place, so you may need to join a gym to maintain your same workouts.

Here are some examples:

• Moving costs
• New mortgage
• Condo or homeowner association fees
• Gym membership
• Parking fees
• Storage fees

As with any plans for the future, try not to rush into the decision before weighing all your options. And if you do decide to move, check out this other article on renting vs. buying.