As your children move on in their adult lives, you start to find yourself in a home that feels a little too empty. It’s hard to give up the home you raised your children in, and many people want to have extra space for when the kids – and grandkids – come back to visit. Still, it’s usually impractical to have a large house when it’s just one or two of you most of the time. Think about the ways downsizing can save you money, and you’ll start to see it can be a great idea.
1. Lower Mortgage Payment
In general, a smaller home means a smaller mortgage payment. However, you’ve probably already spent many years paying off the mortgage on your current home. This builds up a lot of equity and many people are able to use that to either fully purchase their smaller home or substantially reduce the mortgage. If you only have to take out a $100,000 on a $350,000 home, your payments will be quite affordable.
2. Lower Property Taxes and Homeowners’ Insurance
As you already know, you pay a portion of your property taxes and homeowners’ insurance with each mortgage payment. In a smaller, brand-new home, these costs are likely to be less expensive. Buying new offers additional savings on homeowners’ insurance and, since brand-new homes come with new home warranty, they’re unlikely to have any costly problems.
3. Lower Utility Costs
Smaller homes are easier to heat, but when you purchase new construction, your savings are even greater. New homes are built to be more energy-efficient, with windows that lock in heat in the winter and cold air in the summer, appliances with the highest efficiency rating, and other little details that make a big difference. Many people have also been holding on to things like a landline phone out of habit, but you won’t even need to install one in the new home. When you add it up, you’ll see you’re saving a lot of money.
4. Reduced Spending on “Things”
When you live in a large home, it’s easy to splurge on small things because you have a place to store them. You probably have a lot of kitchen gadgets that hardly get any use or clothes you’ve only worn once or twice. In a smaller home, though, you’re more likely to think carefully about what you buy.
5. Less Pressure to Keep Up with the Neighbours
Along the same lines, when you live in a neighbourhood with other smaller homes, you often have less pressure to live an expensive lifestyle. You probably don’t even realize how much money you currently spend on things that help you fit in with your current neighbourhood. You’ll notice the difference in your chequing account once you downsize, though.
6. Fewer Repair and Upkeep Costs
You’ve probably been in your home for several years, so you’re starting to see all the ways it can break down. Everyone has to budget for regular maintenance and replacing worn-out appliances or materials, but this is much more prevalent in older homes. In a brand-new home, everything will have a warranty. Easy new home maintenance means things won’t break down, and you’ll be able to spend your time enjoying life rather than working on home upkeep.
7. Savings on Daily Living Costs
One of the biggest advantages of a new community is they’re more thoughtfully planned. Your new home is likely to be close to a grocery store, restaurants, and large shopping centres, so you’ll be able to save on gas to get to these places. Many new neighbourhoods also have green spaces and walking trails – perfect for an active lifestyle. Rather than paying high monthly fees to join a gym, you can simply step outside your door to go for a walk or jog.
Downsizing is a smart choice for many couples who are reaching their retirement years. Simply looking at the finances will give you plenty of reasons why, but it’s often about having an easier lifestyle. With a brand-new home, you’ll have fewer worries, and you’ll be able to enjoy your new life.
Photo credits: downsizing, coffee, scale
