The Benefits of Downsizing Your Home
Most of us grew up with the belief that bigger was better, but that is no longer the perception of many potential homeowners in today’s market. Bigger sometimes just means bigger – bigger mortgage, bigger bills, bigger headaches. The cost of purchasing, running and even cleaning a large home is more than many people can handle. The realization that the upkeep of a large home can be quite costly, not only to your bank account but also your personal time, have more and more people deciding to buy smaller.
Being house poor means that you are basically working to cover the cost of your mortgage and utilities, with no time or money to actually enjoy your home or family time. You can still have a lovely and comfortable home without all the overhead and liabilities of a mini-mansion. Living in a smaller dwelling in a quaint town or with a great view may be of greater value to you than a large home. The right furniture and decorations can make a cozy and inviting atmosphere that more than makes up for the smaller layout.
Many people have started downsizing. Not only with their homes, but in their lives as well. The HGTV network has a series called Tiny House Nation. It is about people interested in living a smaller and simpler existence. Homes are designed to fit their needs with an eye toward minimalism, efficiency and a smaller footprint. Some of the homes are barely 200 square feet, which might be too small for many of us, but downsizing does come with many benefits, not the least of which is no longer needing a payday loan to cover basic living expenses.
Mortgage Payments
The main benefit of downsizing is the smaller mortgage payment. Imagine having an extra $255 in extra money all of a sudden. A whole new world of possibilities suddenly comes into play. The extra money you have in your monthly budget can be put into your retirement fund, vacation fund, or college fund for your children. Now you might not a have large home to showcase, but who are you really showing it to? Having money in the bank is better than having it tied up in a house.
Furnishings
Furnishing a large home can be quite costly. Depending on the size and available space you can spend thousands on furniture alone, not to mention the rugs and window treatments. With less space to furnish, you can focus on purchasing high-quality pieces that you will enjoy for years.
Monthly Bills and Repairs
Heating, cooling, lighting and maintaining a big home can sometimes end up costing more than the mortgage payment. I’m sure when you dreamt of living in a big and beautiful house you weren’t thinking of the actual amount of money it would take to run the house. Paying your mortgage, taxes, and insurance is only a quarter of the cost. What will you do when your home needs repairs? Eventually, you will need to make a major repair of some sort, and the bigger the house, the bigger the cost.
Cleaning
Imagine the amount of time it can take to clean a large home. If you are already house poor, then a cleaning service is out of the question. That means that your weekends, which were once yours to enjoy, are now going to be spent cleaning your home. Smaller houses are easier and faster to clean, which helps maximize your leisure time.
Regardless of your living situation, the take away is that there is no reason to overextend yourself when it comes to housing. For generations, We American’s lived in very modest homes. The new “bigger is better” mentality of the mini-mansion is a recent phenomenon. It’s a pretty clear indicator when your monthly expenses have you searching for a payday loan to simply make ends meet, it may be time to lend some serious thought to downsizing your home.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.