Whether you’ve decided to eliminate debt from your life, or you’re first time empty nesters ready for a new chapter, now may be the time to downsize your home. But before you start, it’s important to understand that there are many potential missteps along the way. This guide will help you navigate common mistakes so that you can make the most of your new, downsized lifestyle.
1) Not setting goals before downsizing your home
While the financial benefits of moving into a smaller space can be plentiful, it’s important to set goals before you begin downsizing the family home. Here are the most popular reasons for downsizing your home:
- Combating debt
- Turbo-charging your retirement fund
- Paying off your mortgage instantly
- Saving money after retirement
- Reducing home upkeep and maintenance
2) Ignoring hidden costs
Although you’ll be saving money on your mortgage and utilities by downsizing, that doesn’t mean you can throw financial caution to the wind. When you’re house shopping, make sure that the home you’re considering either doesn’t require extensive repairs or maintenance, or at least make sure that you can comfortably afford them.
Also, ensure that your new home doesn’t come bundled with expensive property taxes and/or HOA fees that might eat into your savings. And if your downsize is taking you to more expensive markets, like New York, NY or Vancouver, BC, be sure to factor in the potential increase in the cost of living as well.
3) Forgetting to budget for your move
As you begin to realize how much money you’ll save by downsizing your home, don’t forget about the costs associated with moving to a new location. While you may be thinking about cutting your costs by doing all the moving yourself, take a moment to consider hiring a moving company. Not only would you have someone to pack, move, and unpack your belongings, but most movers provide insurance, meaning that you’ll be reimbursed should anything break.
4) Holding onto unneeded junk
Good organization is key to any move but it will prove especially useful when you’re downsizing your home. So take some time to look through your garage, closets, and spare rooms for anything that’s collecting dust. That model rocket you bought at the space fair eight years ago might be awesome but do you really want to keep holding on to it? Start by rounding up these sorts of belongings and then work your way through old clothes, toys, old appliances, etc., and separate them into three piles: keep, maybe, and donate.
PRO TIP: Josh Cohen, Founder and CEO of The Junkluggers, knows that when downsizing it’s easy to overestimate the number of items that will fit in your new space. This can lead to double the work, starting before you move and then again after you’ve moved in. Start by sorting items into groups of what to pack versus what to donate and recycle. Spending some extra time up front will help you streamline your move, and you’ll also feel good about keeping items out of landfills. – The Junkluggers
5) Not determining your lifestyle needs
After setting your goals, take some time to figure out what features you’d like to have in your new home. This is especially important when you’re downsizing as you’ll have less living space. If you’re downsizing your home because your kids have gone to college, then make sure that your new home will permit the lifestyle you want and that whatever belongings you’re taking with you will fit.
6) Paying for rooms you won’t use
When you stop to think about which rooms you use the most in your home, it’s probably pretty simple: the living room, kitchen, a bedroom, and a bathroom. If you’re not using your dining room, den, and third or fourth bedroom, why even have them at all? By thinking about what rooms you currently do and do not use, you can simplify your search for a downsized home. The same tactic can be applied to your yard. If you find yourself spending little of your free time enjoying your yard — rather just maintaining it — then consider looking for a new home either with a smaller yard or without one.
7) Trying to take all of your furniture with you
While your two-story home is more than capable of housing all of your furniture, your new home won’t prove quite so spacious. So before you start loading your beds or sectional sofas onto a moving truck, keep the limitations of your new home in mind. Also, furniture that is too large for a room will only make a room look smaller, so you may want to consider getting a new couch that will truly work in your new space.
8) Skimping on storage
In addition to saving important documents that you don’t require frequent access to, a storage unit is a great option for saving sentimental items like scrapbooks or seasonal items like winter coats. Whether you’re downsizing temporarily or for the long haul, renting a storage unit is a great option for those items that you don’t have space for but just can’t bring yourself to get rid of.
9) Forgetting to create a downsizing schedule
Moving is a ton of work, even before you add downsizing your home to the mix. Avoid getting too stressed out by the process by remembering to take it one step at a time. Set a timeline for yourself and create a moving schedule accordingly, rather than attempting to tackle everything all at once. By creating a downsizing schedule and a moving checklist, you’ll stay better organized throughout this process while also reducing stress.
10) Choosing the wrong type of home
When you’ve made up your mind to begin downsizing your home, you’ll then need to consider what type of home you want to move into. The type of home you decide on will depend on factors like your finances, health requirements, and the type of lifestyle you’re seeking. Some houses you can consider include single-story, condos, or apartments.