The Financial Perks Of Downsizing

Contrary to popular belief, bigger isn’t always better. A smaller home can have many advantages, such as reducing clutter and making easier to clean and maintain. Smaller homes can also save you money in most cases. Below are just some of the financial perks of downsizing.

Reduced rent/mortgage

A smaller home is likely to be cheaper to rent or buy. Lower monthly rent or monthly mortgage payments could give you a lot more disposable income to spend each month. It could give you a chance to pay off debts, or even a chance to set aside savings. If you’re currently struggling to get by financially and you could reasonably cope in a smaller home, consider whether downsizing could be the solution to your problems.

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Lower energy bills

Smaller homes don’t require as much energy to heat up or keep cool. Properties such as upper story apartments can be particularly good at saving energy, as you often benefit from the rising heat coming from lower occupants’ apartments.

Many new builds are also smaller and tend to be built with superior insulation. As a result, you can expect lower energy bills in a smaller home. On top of reduced rent/mortgage rates, this could further increase your monthly disposable income.

Reduced travel expenses

Downsizing could allow you to afford somewhere in a more central location. You may be able to pay the same rental/mortgage rates while potentially reducing commuting expenses.

If you currently have to travel a long distance to get to work, consider looking into local apartments for rent nearer to your workplace. A more central location could also be nearer to shops and other services, saving you travel expenses here too. When moving to a city, you may even be able to get by without a car, relying on public transport to get you around.

Free up cash by selling up

If you’ve already paid most of your mortgage, downsizing could be a way of freeing up cash. When selling your home and buying a cheaper smaller property, you’ll be able to buy this new property in cash, allowing you to live mortgage-free.

You may even have money left over, which you can use for travel or put towards your retirement. Downsizing to free up cash is a popular retirement strategy – most people don’t need a large home in their senior years.

Free up cash by decluttering

When moving from a larger property to a smaller property, you’ll need to consider getting rid of some possessions. This could be an opportunity to get rid of some of the clutter that has been gathering dust in your home and to live more minimally.

Some of this clutter could even be sold in order to make some extra cash. Many people don’t realize just how valuable some of the unused stuff is in their home.

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/