As you get older and realize that you no longer need the large house you once used to raise your children, the question about downsizing comes up. Should you or shouldn’t you? Oftentimes the decision is an emotional one, but one that needs to be addressed at some point.
Questions to Ask Yourself
Here are a few questions to ask yourself to help you determine if you should start considering the option of downsizing into a smaller home:
- Are there any health conditions that make living in the same home difficult? A common issue is physical ailments that make stair climbing difficult, but there could be hundreds of different medical issues that make moving a better option.
- Are the bills too much to handle? This could mean the property taxes or even the utilities to keep the house operating.
- Is there anything in the home that has such importance to you that you will not be able to live without it? Some people are so emotionally attached to the home where they raised their children that moving is not an option.
- Do you predict that any of your children will need to come back home for any reason?
- Do you have family that visits from out of town often and that stays with you?
- Could you save money if you moved into a smaller home in a different area or would the taxes be higher?
- How do you fit into the current neighborhood? Has almost everyone from your time there moved on and a newer generation moved in?
These are just a few of the things to consider when you are trying to determine if you should downsize or not. Of course, there is no perfect answer as everyone has their own personal answers to these questions. You have to look at each area of moving into a smaller home to see how your life would be impacted either positively or negatively.
Paying Debt Down is a Good Reason for Downsizing
One of the largest reasons to downsize is to deal with the debt you have racked up over the years. Whether you have credit card bills; are still paying off student loans for your children; or have an outstanding mortgage in your golden years, downsizing could help you get back on your feet. The money you save by buying a smaller home can be used to pay off the outstanding debts. This way you can enjoy your golden years without being laden down with bills that require you to work and/or stress about your finances.
Simplify your Life
While there might be a lot of emotional attachment to your current home, there is something to be said about living a simpler life. Not only will you be able to enjoy lower bills because there is less to keep running, you will have more time on your hands. The benefits of a smaller place include:
- Less to clean
- Less to maintain
- Lower bills
- Lower taxes (usually)
- Less room to store things that you probably do not need
This simpler life can help to decrease the stress you feel as well as the financial strain that is so common as people age and their income becomes less than it was.
Focus on your Needs
The main component of deciding whether or not you should downsize is what you will need in the future. If you live in a spacious home with plenty of stairs and obstacles, think about how it will affect you not today, but down the road. As you start to slow down and climbing becomes more difficult, do you want to be stuck on one level of your home and to be unable to enjoy your entire home? What if your mental faculties start to diminish, do you want someone making decisions for you regarding where you will live? Wouldn’t you rather decide for yourself when you are able to make such decisions?
Don’t Forget your Desires
Of course, looking at the big picture, you need to focus on what you want too. It is not enough to focus strictly on what “might” happen to you in the future. Think about what you always pictured retirement to be for you. Was it living in the house you have lived for so many years or was it growing old in a smaller home near the ocean? Maybe you really want to live closer to your grandchildren who live hundreds of miles away. These desires should play a role in your decision for downsizing.
There is no easy answer when it comes to deciding whether or not you should downsize. Typically, it makes financial sense as well as is a smaller burden on you as you age, but it might not be for everyone. Really consider every aspect of what downsizing would do to you not only now, but in the future to decide what is right for you.
Justin McHood is America's Mortgage Commentator and has been providing expert mortgage analysis for over 10 years.