Though living in a big house may seem like the American Dream, it’s actually not all it’s hyped up to be. Sometimes less is more, and in this article, we’ll explain why.
Over the last fifty years, the average house has been getting bigger while the average household has been getting smaller. In 1973, the average house size per person was 551 square feet. Today it’s 1,058 square feet!
Needless to say, it’s possible for the average person or family to live in a smaller home, and it actually has many benefits.
So, whether you sell your current home to buy a smaller one or keep it as an investment property to rent out with the help of a property manager, here are ten financial and lifestyle benefits of downsizing:
1. Lower your mortgage
Living in a smaller home can help lower your mortgage. Generally speaking, the smaller the house, the lower the cost and the less it will take to finance. As a result, your mortgage will take up less of your monthly budget, and you can use those extra savings to put toward whatever you like: retirement, travel, paying down other debt, you name it!
It also means you can pay off your home faster, especially if you put the proceeds from selling your old house toward the new one. You may be able to get a 15-year mortgage instead of a 30-year one or pay in cash to avoid a mortgage altogether.
2. Reduce your home insurance costs
By having a smaller house, you’ll also lower your home insurance premiums. The smaller the home, the less it costs to insure.
3. Cut your utility bills
Smaller homes also use up less energy. For one, there’s less air to heat or cool. In addition, smaller homes tend to have fewer electrical outlets, light fixtures, and water fixtures—all of which means that, on average, you’ll use less electricity and water.
So if you want to dramatically lower your utility bills, downsizing is an easy way to do it.
4. Lower your property taxes
Government tax assessors determine property taxes based on what they deem a property to be worth. And since smaller homes tend to be worth less, owners of small homes can count on owing less to Uncle Sam.
5. Afford in-demand neighborhoods
Choosing to downsize can open up new opportunities to live in popular neighborhoods. When you don’t care as much about house size, you have more flexibility to live where you want—like downtown or on the beach.
6. Get rid of unnecessary belongings
Downsizing forces you to get rid of unnecessary belongings (you may no longer have anywhere to put them). This can be a blessing in disguise:
Clutter can have negative effects on your health—both mental and physical. So by getting rid of it and adopting a simpler, minimalist lifestyle, you can actually improve your well-being.
Plus, you may see some financial benefits by selling your old stuff and spending less on furnishing your new home.
7. Perform less maintenance
With a smaller home, there’s less to clean and maintain. Why waste countless hours trying to keep a big home spotless, when you can live in a small one that doesn’t get as dirty or messy and can be cleaned and tidied up in a fraction of the time?
8. Free up more time
Because smaller homes require less time for upkeep, you’ll have more time to do what you want—whether that’s traveling, chasing your passions, or spending more time with your family. Fewer home responsibilities equal more freedom.
9. Enjoy more family bonding
Smaller homes naturally provide a cozier space, in which family members interact more. Instead of allowing everyone to stay in their separate spaces and segregate from other family members, small homes help create more opportunities for families to bond.
10. Reduce your environmental footprint
Lastly, downsizing to a smaller home can help the environment. For one, smaller homes consume less energy. Secondly, smaller homes tend to be older so you’ll likely buy (and reuse) an existing home instead of building a new one, which helps preserve instead of destroy what’s already in the environment.
So the smaller your home, the smaller your environmental footprint will be.
The bottom line
Moving is a big decision that shouldn’t be taken lightly. But if you’re planning to move already, it pays to move to a smaller home. Downsizing can yield major dividends for your long-term financial, physical, mental, and emotional well-being.