If you’ve lived in the same property forever, the idea of downsizing will either fill you with fear or excitement. If you’re having to downsize to make life more affordable, you’ll likely experience a completely different emotion.
Either way, is downsizing a good idea? Can it help you manage finances?
It’s not my style to tell you what to do. Instead, I’ll outline the pros and cons of downsizing as I see them.
Then, you can take stock, check your personal position and make an informed choice.
The pros of downsizing your home
There are definite upsides to downsizing your property is that’s what you decide to do.
You’ll spend less on mortgage debt – If you’re still paying a mortgage, you may be able to pay it off completely or get a smaller mortgage on a smaller property.
Pay off other debt with the proceeds – If you have money left over from selling your home and buying a new one, you can use it to pay off other debt you may have.
Lower bills – A smaller house can mean lower council tax, lower heating costs, using less water and lower maintenance costs too.
More financial freedom – If you can pay off your mortgage, get a smaller one or pay down debt, you’ll have much more financial freedom.
Less anxiety about finances – Owing less or nothing is a huge weight off your shoulders. It reduces anxiety and the dependence on an employer to survive.
New beginning – There’s also the opportunity for a new beginning. A new home, new financial freedom, new stressless finances and the ability to live life how you want.
As you can see, there’s a lot to be said for downsizing if it works in your situation!
The cons of downsizing your home
There are downsides to downsizing though and it’s important to know exactly what you’re getting yourself into.
Less space to live – Downsizing can mean adjustments in how you live, how much furniture you have and how much you can collect or keep around you.
Emotional attachment – If you have lived in your current home and have happy memories, that can be quite a wrench emotionally.
Moving costs – Buying a house is expensive, as is moving, paying stamp duty and covering all the fees involved in a sale.
Less to pass on – If you have an eye to the future, a smaller house may mean a smaller inheritance for your kids.
Downsizing your home to go debt-free
There’s a lot to think about if you’re considering downsizing your home to go debt-free.
It isn’t all about the finances either. There’s emotional, memories, family ties and your future lifestyle to consider.
It definitely isn’t something to enter into lightly so good luck with it if you decide to go for it!
