I have a big house.
I’m not saying this to brag or anything but when you buy a big house or in my case build a big house it causes a lot of other things to be big as well.
And as much as I like having a house a nice house with more room and space I often have to wondered how much I could save by downsizing my house. Now I have to admit that my financial life has been a bit stressed since I built my house and I often think it could be better if I would downsize to something smaller.
You may have had these thoughts too, and you’ve probably had these thoughts too or you probably wouldn’t be reading this article right now. So if you’ve been having these thoughts like I have I’ve put together a list of some positives a negatives to this idea to help you through the process.
The Upside to Downsizing
To start I’m going to share the potential upsides to downsizing your home. I’ve been considering this idea for a while and I’ve actually come up with a bunch of reasons this may be the answer to a lot of my financial issues. If you have anything to add just leave a comment below.
#1 Lowers Your Mortgage Payment
The first benefit is that it lowers your mortgage payment. My current mortgage payment is right around $960 which is pretty high for me. If I were to downsize I could easily cut my payment in half saving me roughly $500 a month.
The remainder of which I could save back for more important things such as my emergency fund, a new vehicle, paying off my credit cards, or even putting towards retirement.
#2 Lowers Your Taxes
Second is that it would lower my overall property tax bill. Currently I pay roughly $225 a month or $2700 a year in property taxes. If I were to move to a smaller house I could save roughly half of that.
Overall this would save me roughly $1350 a year that I could be putting toward something else.
#3 Frees Up Equity To Buy a Smaller House
Number three on the list is that it would free up the equity I’ve already built up in my house and put it towards a smaller house. Now I know this doesn’t work for everyone because the equity that you have your house isn’t going to be the same as mine.
However I know that I have a enough equity in my house to buy half of a smaller house in my local area. In the end this would help me further lower my mortgage bill a lot to help me save even more.
#4 Allows you to Save More Back
Fourth on the list is that it would allow me to save more back overall. When I consider everything I could save on I would literally be able to set back an extra $500 to $1000 a month or more.
That’s a huge savings that could help me clear up a couple of my credit card debts that I have and keep me in the black for a long time to come.
#5 Relieves the Financial Stress
Finally, downsizing my house would eliminate the majority of my financial stress. If you’re dealing with this situation you know exactly what I’m talking about.
Before I moved out of my first house financial stress was literally nonexistent. I could pay all of my monthly bills and still have plenty left over to do whatever I needed. Once I moved to my new house I could feel the pressure and to be honest I’m just not a big fan of it.
For some people they can just deal with it but I prefer a more simple financial lifestyle.
The Downside to Downsizing
Now that I’ve covered the upside to downsizing I want to share a few of the downsides to this. As good as things sound by downsizing their are still some downsides and I think it’s important to look at both sides of the fence before you make this big of a decision.
The first thing I feel I would lose is all the memories we’ve built up while living in this house even though it has only been a few years their are still memories. From playing soccer in the front yard with my kids to all the family get together the memories can be hard to leave behind.
I did this with my first house and I’ve realized that it’s not the house we love so much but the people we spend it with and I know I could move past this as I did with my first house.
#2 Less Space
The other problem I would deal with if I downsized is having less space again. In my current house I have tons of space to store stuff from the kids close to all the other odd an end things. In my previous house we had no room for anything.
I know that if I were to move to an older house that I’d be dealing with the possibility of some costly repairs. This could range from anything such as a new roof to a leak in the foundation.
This would an added expense that I’m sure would eat into my budget. On the other hand if you do your due diligence and take the time to look things over you could likely side step this issue.
With my first house it was built right around the early 1900’s and in that time I had managed to replace the room, renovate half of the first floor, and bunch of other things. So saying nothing can happen is just not true because sooner than later it will.
It’s just like Murphy’s Law says…
“Whatever can happen will happen.”
Finally, the last reason I don’t want to downsize is because I’ll have to move again and moving means that I’ll have to move all of the stuff in my house. I have a lot of stuff to put it mildly from furniture, to the my kids stuff, to all the stuff piled up in my basement.
The last time I move it took me what seemed like an eternity to get things moved to the right places. Now I could hire movers and have them do this but it really isn’t in my budget to do this and more importantly you really have to watch out for who you hire to move your stuff.
Do You Want to Downsize Your Home?
Now it’s your turn, are you considering the idea of downsizing your house to something smaller?
I know that I’ve been considering this idea a lot even though I just built a house a few years ago, and this might sound crazy but my house is controlling my current financial future and if I were to sell it and move to something smaller it allow me to save more and give me more of my freedom back.
So take a moment and share your thoughts below.
Downsizing and moving gave us an opportunity to declutter and rid our lives of things we truly don’t need, so I think moving could be considered a pro and a con. Moving to our small house was definitely the right move for us!
Hey Claudia, decluttering would an extra added benefit for us to move as well. It’s amazing how we’ll always find ways to fill up the space we have in our home. Thanks for sharing.
In Germany you pay about 10% Notarkosten + Grunderwerbssteuer always when you buy a house. If you need a estate agent even more.
So it might be cheaper to stay in the more expensive house.
In Germany, if you buy a house you want to die there.
That’s an interesting perspective Anita. In your case it may be more cost effective to stay with the house because switching could be really costly. In Ohio it’s not as tough buy and sell a house. If I sell my house and buy another house I will owe a tax on it but these fees are often times added into the loan. As far a selling my house goes it has only been a thought so far and I feel that’s as far as it will go. Thanks for sharing.