Back in 1973, the average home was 1,660 square feet; today, that figure is about 2,600 square feet. There are many reasons people might choose to downsize their home: retirement, an empty nest, a move to the city, and many other life changes. The decision to downsize is very personal and depends on your goals, lifestyle, and financial situation.
Here are a few factors to consider in your downsizing decision:
*The Financial Impact
Lowering your mortgage payment by moving to a smaller home may allow you to set aside a greater portion of your income toward retirement each month. It could also facilitate lowering longstanding debts, such as student loans. Finally, even if your mortgage is affordable or paid off, you may still benefit from downsizing by decreasing your monthly household bills: electricity, HOA fees, maintenance, and other expenses. You’ll also want to consider all of the costs associated with moving, should you decide to downsize: will you have to do home repairs prior to listing? Will you keep your existing furniture? Don’t overlook other expenses, such as property taxes and insurance.
*Your Long-Term Needs
Picture your future in 10-20 years: will you be able to continue maintaining your existing home comfortably? Consider how your home’s stairs, yard, bedroom layout, and other features may impact your safety and wellbeing.
Downsizing may be the logical move, but leaving a home associated with years of memories can be difficult. On the other hand, starting a new chapter of your life in a different place can be very exciting and energizing. Take time to process all the various emotions that will arise as you navigate the downsizing process.