Building and moving into tiny homes is a very popular trend now. A passing glance at HGTV will prove that. Moving into a tiny home is the epitome of downsizing but it might not be practical for a lot of folks. However, you don’t have to move into a tiny home in order to benefit from downsizing. In fact, many retirees are downsizing as way of simplifying their lives and saving money. Is downsizing your home right for you? Consider these five ways to save money:
1. Purchase Costs
A smaller home is going to cost less to buy. That’s certainly a good place to start. If you sell your current home, then you might even be able to put in a cash offer on a new, smaller place and still have plenty of leftover cash. If you decide to downsize into a condo complex, then your new home could also come with lots of amenities like a pool and gym. Not too shabby.
2. Energy Costs
Heating and cooling a downsized home is going to have a direct impact on your monthly utility bills. You might even discover that running the central AC isn’t going to bust your monthly household budget anymore. The savings you earn from lower utility bills can go right into your pocket or investment portfolio.
3. Maintenance Costs
Here is where downsizing to a condo or apartment can be a huge bonus. You won’t have to constantly worry about the upkeep of things like a roof, lawn or driveway. Imagine a world where you don’t have to mow the lawns or shovel snow off the sidewalk! All of that will be covered by the homeowners association. Yes, you might be paying a small monthly HOA fee but it could be well worth it for all the work you won’t have to do!
4. Stuff Costs
A smaller home means you don’t have a lot of space for stuff. You’ll have to do some major closet cleanouts in order to fit into your new accommodations but that is a good thing. Because you won’t have the space to bring in extra furniture and gadgets you won’t be spending on those things. More savings. All you need to focus on in your new downsized environment is what you need to live a comfortable life. Everything else is just… well, stuff.
5. Extra Savings
With all the money you’ll be saving, you’ll be able to pay down any debt you might have incurred over the years. This is important as you head into your retirement years. The less debt you carry after 65, the better off you’ll be.
You shouldn’t look at downsizing as a downgrade. Instead, embrace it as the potential to start a thrilling new chapter in your life. If you’ve always wanted to live in the city, then here is your chance. If you want to travel more, then you might have the money saved up. Add it all together and it seems like downsizing could be a huge win. Are you thinking about downsizing?