At a certain point in your life, downsizing to a smaller home makes sense for a number of reasons. This U.S. News article by Maryalene LaPonsie highlights three reasons why downsizing makes sense financially.
Many people tout downsizing as a way to free up time and focus on more important and less material pursuits, but there are financial perks to the process as well. Whether you move to a smaller house or simply clear the clutter from the one you have, here are three ways downsizing possessions can upsize your bank account balance.
Immediate inflow of cash. While people understand they can make money by selling excess items, they may underestimate the potential value of what’s in their house. “We don’t realize the pieces of art we were given for our wedding now have a $5,000 to $10,000 price tag,” says Jacquie Denny, founder and chief development officer for Everything But The House. Denny encourages people to consider downsizing early rather than leaving it as a task for heirs to complete.
Reduced long-term financial costs. Beyond an immediate influx of cash, downsizing can also lead to long-term savings. Lower property taxes, fewer maintenance costs and less space to fill with furniture and home décor can all keep more money in a person’s pocket.
Increased possibility of a secure retirement. Naturally, having lower living costs means more opportunity to save for retirement and other life priorities. It could even pave the way for an early exit from the workforce in some situations. At that point, workers may find they can easily shift careers or reduce hours without sacrificing their lifestyle. Others may keep their same hours and use money previously budgeted for housing for other purposes such as travel or college costs.