If you’ve ever seen one of the television episodes about tiny house living or watched a news report on the trend, then you’ve likely considered downsizing to something smaller than your current home. There are many benefits to downsizing your living space, and it’s something you should carefully consider….Particularly if you’re trying to save money for retirement or simply want to have more spendable income to experience new things, travel or invest.
The Case For Downsizing Your Living Space
The following is a guest post from Holly Welles.
In recent years, the size of single-family home new builds has decreased. Both millennials and baby boomers are choosing smaller options, including tiny homes to help them meet financial and lifestyle goals. Baby boomers and Gen Xers are looking at retirement finances and millennials are dealing with student debt.
Paying less to live is an attractive option, but still allows them to own something that is 100 percent theirs. If you’ve ever considered downsizing your living space, here are some key advantages to going smaller.
1. Save on Monthly Costs
The obvious benefit of owning smaller square footage is the financial savings. Not only will your house payment likely be less, but you’ll also have lower upkeep and lower utility costs. Of course, how much you save depends largely on how small you go.
Although standards for square footage per person vary widely based on personal preference and location, a good guide is about 500-800 square feet for two people. This would be a studio-size apartment with, for example, one bed, one bath and living room, and a sleeping area all in one room. It costs much less to heat a 600-square-foot space than a 1,600-square-foot space.
Related: Tiny House Movement – I Love It!!
2. Get Rid of Clutter
It’s so easy to collect clutter from year to year. People give you gifts you don’t really need or use, but you’re too polite to get rid of those items. Perhaps you can’t part with your favorite tee shirt even though it has holes in the armpits. Maybe you just haven’t gotten around to going through those boxes of things you inherited from your Aunt Mary, even though you’re fairly certain you won’t use most of it.
Whatever the reason for the clutter, it’s universal for people to inadvertently collect it. It almost seems to multiply on its own, or maybe we found one too many sales we couldn’t pass up. Whatever the reason, downsizing your living space allows you to cut that clutter and re-purpose it or donate it. You could even sell it and apply the profit to a down payment on your smaller home.
3. Find Adventure
Those who choose a tiny home often go for an option that is towable. Some even choose a recreational vehicle instead of a traditional home. This is an excellent option for those who wish to travel and experience different places. You don’t have to be retired to go for a home that can move with you. Many young professionals wind up transferring as they rise up the ranks of a corporation. Instead of having to find housing at each new location, you’d simply take your home with you.
4. Help the Planet
The bigger your house, the more energy it takes to keep things running. Not only do you use more electricity, but you’ll also likely generate more waste and perhaps have a larger carbon footprint, with everything from your lawn care to air conditioning costs.
When you downsize, your carbon footprint is naturally reduced.
If you choose to downsize dramatically and go with a tiny home, then you can also go with sustainable energy options such as solar power.
5. Learn Patience
There are some pretty dramatic lifestyle changes that come with downsizing, and you’ll need some patience at first to get used to some of them.
Some of those changes might include:
- Learning to use a composting toilet, especially with tiny homes.
- Bumping into your significant other when you’re both trying to work in the kitchen.
- Being more selective of what you buy and bring into your home. There just isn’t room for it!
- Getting used to having to use items for multiple purposes, such as a fold-out table for dining and as a desk.
These are just a few of the adjustments. It’s not an easy thing to go from a larger home to a very small one. Fortunately, as long as you’re aware of the challenges, the benefits of downsizing your living space far outweigh the cons.
6. Free-Up Money
Probably the biggest benefit of downsizing is that you free up valuable resources. Homebuyers are recommended to purchase a house that fits into the 28/36 rule. If you’re on a tight budget, reducing this figure even more with a smaller home will allow you to invest the money saved.
If you’re interested in investing in real estate, for example, you can downsize a larger home and buy a duplex. Your side may be half the size your home was, but you’ll gain income from the other side, helping you pay your mortgage for now and eventually generate income. This is how you build wealth over time.
Related: How Much House Can I Afford?
7. Get Closer
Have you ever met a family that was extremely close and did everything together? They probably weren’t each in their own bedrooms growing up, but instead centered together in a living space, playing board games and having conversations. If you have children, downsizing your living space forces closer proximity. While this might be horrifying to teens, it’s something that will allow you to have more quality time with everyone in the family.
You’ll also be forced to work together as a family and figure out how to allot bathroom time and share storage space. It might present some challenges at first, but once you figure out how to work with each other, it will strengthen family bonds.
Downsizing your living space isn’t easy. You’ll likely have to part with things you really love or mean a lot to you in order to fit everything into your new smaller space. However, the many benefits do make it worth the effort involved in giving away and selling off those extra items. Spending less on a home and the upkeep of it is one of the smartest things you can do for your financial health.
Holly Welles is a real estate writer with an interest in helping readers find clarity in financial confusion. You can catch more of her advice on managing a home at her blog, The Estate Update, and follow her on Twitter @HollyAWelles.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.