Back in the 1950s to the 1970s, when families were bigger, homes in the United States were much smaller, averaging only around 1,000 square feet to 1,600 square feet. Today, the average home size in the country is around 2,600 square feet.
If you’re looking for a new home, one of the things to ask yourself is, do you really need all that space? This is important to ask, particularly if the children have grown and left the nest.
Downsizing may seem counterintuitive, but if you look at the bigger picture, you’ll find it makes plenty of sense.
Here’s a look at some of the benefits you can get from downsizing:
- It can boost your retirement fund
A smaller, less expensive home means lower mortgage payments, which means extra money that you can put toward retirement. For example, instead of paying $1,900 a month in mortgage, you can downsize and pay $1,400 a month, instead. You can then invest the $500 monthly savings into an IRA or another retirement account, which can potentially grow to over $1 million in 30 years. The longer you can put off retirement, the more money you’ll have saved.
- It can free you from debt
Selling your current home might just earn enough to purchase a smaller home with cash, if you have enough equity. That means no more mortgage payments to make. Think about what you could do with no mortgage! That said, you do need to think about tax implications, especially if you make a substantial profit from the sale of your home. Be sure to talk to a tax professional first.
Alternatively, if you move into a home with a smaller mortgage, you can use the savings to pay off your student loan, or any other long-term debt that you may still be paying. Or, you can put the money into other investments that can pay big in the long term.
- Smaller homes mean less cleaning
This means you’ll have more time and energy to enjoy hobbies, exercising, socializing, or any activity you find enjoyable.
- Smaller homes have lower utility bills and other regular expenses
The cost of heating and cooling a smaller home can be considerably less than a larger home. It will also require less maintenance. Additionally, smaller homes will most likely cost less in insurance and property taxes.
- A smaller home can mean less clutter
Moving to a smaller home forces you to finally sort out your belongings and find what items you need and love and which you don’t. The things you no longer want can be given away, sold, or donated. Living in a smaller home also means you probably won’t collect as much unnecessary “stuff.”
Downsizing the right way
If the above sounds like good reasons to you, then it’s probably time to move to a smaller home. To have a smooth, successful transition, work with an experienced Realtor who can give you a good idea about the current value of your home and how much it can possibly fetch on the market. The Realtor can also help you find the right smaller home that meets all your needs and preferences, while providing significant cost savings.
Whether you’re moving across town or into the Concord or Charlotte, NC areas, we at The Gallagher Group at Southern Homes are the Realtors to call. Get in touch with us today here or call 704.960.0009.