Downsizing your home can be a deliberate financial strategy, not just a reaction to hard times. We have already written about how to go about downsizing. Here we want to look more closely at the financial side of that decision.

What does downsizing actually save you?
A smaller home costs less to run. You will likely save on utility costs for heating and air conditioning. Depending on where you land, you may also save on property taxes and home insurance, or pay lower rent if you are renting.
If you still carry a mortgage, downsizing offers a specific opportunity: you can become debt-free earlier than originally planned. A lower mortgage payment frees up money to pay down other loans, such as student loans or credit cards. Or you can keep your payment the same and simply pay the new, smaller mortgage off faster.
If your old mortgage is already paid off, selling and moving to a smaller home frees up capital you can put to work elsewhere, including financial investments.
When is the right time to make the move?
To get the most out of downsizing, pay attention to the current housing market. You want to sell your current home at a profit if you can, so timing matters.
If your move is not time-sensitive and you have some money available, targeted renovations or upgrades to your current home can increase its market value before you list it.
Is a smaller home always a step down?
Not necessarily. Even if freeing up capital is not your main goal, downsizing might put you in a position to move to a more desirable neighborhood or city. A smaller home in a better location can mean a genuine improvement in quality of life, not a compromise.
Ready to take the next step?
Whatever your reason for downsizing, the move itself deserves the same careful planning as the financial decision behind it. Hiring a reliable, affordable and competent moving company is a good place to start. Contact us to request your free quote and we will walk you through exactly what your move will involve.
Sources and further reading:
https://www.daveramsey.com/our-moving-blog/3-money-smart-reasons-to-downsize
https://www.fool.com/retirement/2017/12/08/5-signs-its-time-to-downsize-your-home.aspx
https://www.thebalance.com/home-downsizing-1798313

