How Much Could You Save by Downsizing Your Home?

Are you living with “too much” space? Sounds like an odd question but the answer could save you hundreds, maybe thousands of dollars a month. Think about it, do you currently reside in a home or an apartment that is far larger than you need? Maybe you bought the home when you had children, but they’ve since grown up and moved out. Perhaps you’ve split with a significant other and instead of two people in the residence, now it’s just you. The bills are piling up and that monthly rent or mortgage payment is becoming a serious burden. Maybe it’s time you considered downsizing your home.

What Do I Mean By “Downsizing”?

Downsizing your home is all about simplification. Maybe the kids’ room is just sitting there empty or you have attic or basement space that is just collecting more clutter year after year. What you probably haven’t realized is that you are paying for all of that unnecessary space every month…and why? You’re not using it. By downsizing your home, you can reduce your monthly financial commitments and keeping that extra cash in your pocket. It might sound a bit daunting at first but think of all the money you could save by making the move.

Let’s Talk Savings

By downsizing your home, you could put that money towards other more important things. Moving into a smaller house or apartment can easily reduce your mortgage or rent payments by hundreds of dollars a month. Consider where you live at the moment and the monthly mortgage payment that you’re making. If you found a home that was even 25-30% less, you’d be reducing your payment by that much per month. You could put that money into a retirement fund or some other savings account and build a pretty sizable nest egg for yourself in a short amount of time. That’s one of the great estate planning tips!

Lower Payments All Around

A smaller home doesn’t just mean less space; it also means lower monthly bills. The larger your space the more energy you consume. It costs a lot to heat and cool a home these days. Heating bills are through the roof, not to mention the increased electricity bills for those hot summer months when the A/C is on all day. Utility bills are downsized when you downsize your home and that can mean big bucks. If your utility bills run you about $250 a month and you reduce your space by about 25-30%, you’re looking at saving up to $75 each month. Multiply that by 12 months, you just put an extra $900 in your pocket. I bet you can think of plenty of other things to spend that money on instead of heating and cooling empty rooms.

The formula for how much you would save per month all depends on your own personal expenditures including rent, mortgage payments, utilities, as well as other costs ranging from home maintenance to property taxes. The only way to determine how much you could actually save through downsizing is by auditing your monthly financial commitments.

Add up all of your bills and then consider the amount of square footage of your current home. Are you paying too much per square foot? If the answer is yes and you decide downsizing may be right for you, talk to a real estate attorney who can help you begin the process of selling your current home.