You’re looking for a new place to live, you’ve gone through your checklist, and even gone so far as to analyze the price to rent ratio in your area.
It’s time to go out and find yourself some new digs.
So, like most Americans, you look for a place that is larger than your current residence. According to recent Census estimates, the median new home size in the U.S. is 2,301 square feet. It’s gone up just about every year since the mid 1980’s. Even more alarming is that in 2020 the average American household contained a record low 2.53 people (909 sq. ft. per occupant). Compare that to 40 years ago, when the average household size was 3.01 people and the median new home size was 1,550 sq. ft. (514 sq. ft. per occupant).
But, WAIT!
You’re not like most Americans. In fact, just by virtue of being here on this blog, you’ve already shown you want to be different than most Americans.
So, you do something unexpected. You move, but not to a bigger home. You move to a smaller home – one that is far below the national average.
In the process, you’ve just successfully executed possibly the single highest impact financial tactics known to mankind: you’ve downsized (or right-sized, some might say). Moving to a smaller home not only takes a hatchet to the highest expense you will likely have (your housing costs), but it also allows you to:
- Reduce the risk associated with a mortgage/lease if you hit economic hardship and can’t keep up the monthly payments
- Reduce the need to buy stuff to fill the home: less empty space = less stuff bought
- Sell off extra furniture or clutter that you don’t need
- Reduce your heating and cooling costs by virtue of less pace to heat and cool
- Reduce your property taxes (if you own)
- Reduce necessary maintenance
- Reduce renovation costs
- Reduce home insurance premiums
- Reduce environmental impact
- Reduce cleaning time/costs
One move suddenly has a domino effect of more than a handful of additional cost savings and lifestyle benefits. Less stuff, less maintenance, less cleaning, and less costs = less stress and more time and money to do things you really want to do.
Step #1 to Downsizing: Sell your Stuff
What’s the first step you take on the path to downsizing your home?
Sell. Your. Stuff.
Actually, that’s the first, second, and third thing you should do if you’re serious about downsizing now or in the future.
Sell half your stuff. Then sell another half. Craigslist, EBay, Amazon, yard sales, garage sales, email blast at work. Whatever it takes.
Need some de-cluttering tips? Here and here are some decluttering tactics and mental techniques to help you get rid of your stuff.
Once you’ve gotten rid of all (and I mean ALL) the excess, you’ll have much more clarity in to how much space you truly need.
Step #2 to Downsizing: Living in the Now
Human beings, by nature, like to plan for the future. Sometimes years, even decades in advance.
You’ve just gotten married and you want to get a home. What home do you buy?
Why, the one that fits not only you and your significant other, but also 2, maybe 3 kids, a dog, and all of your future toys.
Huge mistake.
Buying too big of a home right away to meet future expectations was one of my biggest financial mistakes – and I won’t let you repeat it. I’ve since downsized and want to downsize again. Tiny homes: the new “American dream“.
Avoid the cliche and expectations of more, more, more – and you will prosper.
Downsizing Discussion:
- Afraid to downsize? What is holding you back?
- Have you downsized lately? What tips do you have?
- If you have downsized, what kind of savings or other benefits have you realized from the move?
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I fully agree with not buying too much house, but there are cons to trying to find a small house. Generally speaking in the city I live, the 1000 sq. ft. houses are dominated by renters, who freeload off the system and get housing assistance, food stamps, etc. and the area has a higher crime rate. If I could find an area near me with a 1000 sq. ft. house, for cheaper than my current mortgage, that has middle to upper middle class living, then I’d move there. For now I am happy with my house that is larger than what I need.
I’m single and I bought 1400 square feet. While it’s true I have more room than I need, (I have two rooms that are completely empty, and a 2 car garage for one car) my house payment + tax payment is lower than my old apartment rent.
I have been living in my house for about a year, and haven’t made any major purchases to fill the two empty rooms yet, and I am hoping they remain empty for awhile longer.
More people should be downsizing! Seriously, the cost savings in the long run are massive, it also keeps you from buying crap and stuff you don’t need since you basically don’t where to keep it, not to mention the simple life and the benefits that come with it…less clutter and all! I have downsized lately, smaller house, lower mortgage payments and smaller utility bills. I also had to sell some stuff which earned me a nice sum. But most importantly, am happier with the uncluttered feel…small space forces you to be very creative and consious of what you pull through the doors!
Being that we just bought a starter home 2 years ago, we don’t really have much to downsize to. I do know a lot of people in my parent’s generation who would benefit greatly from downsizing. It frees up a lot of monthly cash flow and possibly some equity if you had any.
Downsizing is an excellent idea particularly in difficult financial times. Your mortgage is one of the biggest monthly expenditures so reducing it makes sense. It’s a great idea to do this if your family has grown up and moved on, after all do you need a 4 bedroomed house when there’s only two of you living there?
I quite agree. You really can make a dramatic difference to your finances and thus your life by downsizing.
If you have any geographic flexibility you can also make a big difference by moving to a cheaper area. A move outside the city can not only save you a lot of money but may lead to a better lifestyle too.
Additionally a move to a warmer climate can mean you create more living space outside and find the smaller house more tolerable when inside.
I downsized when moving from coast to coast – I sold everything that would not fit in my car (with 2 people riding in it). No roof rack, no tow-behind trailer. I used a combination of Amazon for smaller things like old calculators/cell phones and Craigslist for my furniture, and made $1500 cash to fund the cross-country road trip. I was moving into a furnished apartment so I didn’t need much of anything, and it felt AMAZING to know I had all my earthly possessions with me, even my baby photo albums.
Now we have a home for our family that feels right-sized other than the formal dining room (which I’m planning to use more as a library/homework/play area for the kids). If we ever relocated, we would certainly look at a smaller house, maybe even a shared bedroom for the kids since master bedrooms are so huge these days, my husband & I are more comfortable in a kid-sized room together.
Why do kids need their own bedroom anyway? I share rooms with my sisters until the age of 23(!). My sons shared a room until my oldest started middle school, and they each needed more space. I want to downsize my house, too. The cleaning, heating, cooling, maintenance, etc. of a big house doesn’t make sense on any level.
We bought our 2 bed, 1 bath 1950’s house as our “starter” home, but the longer we live there, the more sense it makes to ditch the starter when we describe it. Previous commenters are spot on; it’s all about what you bring through the doors and how you work with what you have. Any time I think we need more space, I remind myself that the previous owners raised five children here. When I asked one of the now grown sons how they managed he said, “simple: We played outside a lot, we liked spending time together and we didn’t know any other way.”
I appreciate your advice and fully agree with two aspects. First of all, most Americans do not need near as much as they think they need. Secondly, being brave enough to downsize is the most effective way to make a major dent to a budget improvement project.
Another option is to house share, and I don’t mean flatmates, but buying a house with a sibling, friend or other family that has dual living potential/ability.
I bought a house with my sister. she lives downstairs and I live upstairs with my daughter. 2 kitchens, 2 bathrooms, 2 everything. We both get the benefits of living in a nice area near the beach and shops and schools but we only have half a mortgage each! PLus its not like buying a unit, its bigger than a unit, we have a nice backyard to share, no body corporate fees.
Best financial decision I ever made.
I have wood flooring in my living room. It’s easy to clean and get when you have a family. Painted walls are easy to maintain with a family and easy to do when you want a fresh new look.