Late in 2017, GoBankingRates.com reported an interesting conflict in popular opinion regarding the preferable size of a home:
“A 2017 Trulia survey found that 46 percent of people between the ages of 18 and 34 want extra square footage in their homes. But bigger isn’t always better. According to the same survey, nearly 61 percent of respondents who live in homes larger than 2,000 square feet said they would choose a smaller home if moving this year.”
So, what gives? Do we want bigger or smaller homes?
Interestingly, the Trulia survey seems to indicate that, while we think a bigger home is better, once we’re actually in one, most of us recognize the value of downsizing. And, as it turns out, there are a lot of practical reasons to do just that.
Why consider downsizing your home?
There are many reasons to consider downsizing your home but they all fall into one of two buckets: financial, and personal.
Financial Reasons
- Paying off debt: With a smaller home comes a smaller house payment. If you were to downsize and apply every dollar you save to paying down debt, you would surely make faster progress on paying it off and you’d save an impressive amount on interest in the long run. This applies to the mortgage on a smaller home, too: if you apply your former “big house” payment to your smaller mortgage, you’ll pay it off and gain equity faster, which improves its resale value dramatically.
- Saving for retirement: Americans are notoriously unprepared for retirement, with just $5,000 being the median savings for all working families in the nation. In many cases, this is because we all tend to live up to our means rather than scaling back and saving what we don’t need to spend. Downsizing can free up money that would be better invested in a retirement fund.
- Lower utility bills: Living in a smaller space means less energy needed for heating and cooling, fewer lights that can be left on, fewer dripping faucets, and the list goes on. Additionally, less room usually translates to less “stuff,” most of which has to be plugged in or charged routinely. According to Than Merrill from A&E’s Flip This House, “on average, the electric bill for a 1,000-square-foot home is approximately $200 per month less than the electric bill for a 3,000-square-foot home.”
- Money for other things: Let’s face it, it’s fun and smart to have more cash available than you used to. If you’re not spending as much on your home, it means you have more money available for things like building up that emergency savings fund, putting money away for the kids’ educations, funding that family vacation, or just occasionally having fun without stressing about it.
Personal Reasons
- Retire sooner: If you’ve been putting off retirement because you need to pay off a large mortgage, downsizing could help you retire sooner. This is especially true if you’re an “empty nester” who’s still paying for far more house than you need. Some people keep working past retirement age simply because their retirement income won’t be enough to support their current lifestyle.
- Work less: Are you drowning in overtime? Trying to juggle two or three jobs? Barely getting a chance to be with the spouse and children you’re supposedly working so hard to care for? It’s not just bad for you, it’s bad for them too. And, it’s just not sustainable. Downsizing could be your ticket to a saner schedule and an opportunity to rebuild those relationships that make all the hard work worth it.
- Play more: A smaller home means less space, which we’ve already established means less expense and, therefore, less time at work needed to pay for it. But, it also means less time, stress and money spent on cleaning maintaining it. Home maintenance is inevitable, and keeping the house clean shouldn’t be optional. However, the smaller the home, the less there is to get dirty or go wrong. Downsizing reduces regular maintenance and cleaning, leaving more time for fun and relaxation.
So, what do you think? Are you ready to downsize your home?
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