7 Signs It’s Time to Downsize
Downsizing a home is almost inevitable for many older people. Once your children are out of the house, you don’t need and probably don’t want as much space as you once had. Downsizing can be smart financially and give you a new lease on life, but it can also be an emotional decision to leave your home behind.
The following are seven signs that it might be time to consider downsizing, even if you’re a bit hesitant.
1.) Your Neighborhood No Longer Suits Your Lifestyle
The location of your home can be as important to your lifestyle as the features of the house itself. When you bought your home, maybe your neighborhood was filled with young children or was close to the best schools.
Those things might still be true of the neighborhood, but that doesn’t mean it’s the right fit for you anymore.
You might feel a bit out of place in your neighborhood, and maybe you’d like to move somewhere with more people your age so there are more accessible opportunities for socializing.
2.) You Have Multiple Unused Rooms
If you have many rooms in your home that are regularly unused, it could be a good time to downsize. There was probably a time when toys took over every room, and it seemed like you were bursting at the seams. Now, maybe you only use a few rooms in your home, in which case you could make do with a little less space.
3.) You’re Struggling to Maintain Your Home
Homes involve a lot of work and upkeep. There might have been a time when you were proud and happy to spend every weekend working on your home, but maybe you have different goals now.
Perhaps you’d rather be traveling or spending time on hobbies.
You might also have some physical limitations that make it harder for you to do certain chores.
A smaller, more manageable home will free up your time so you can do things you love instead of keeping up your home all the time.
4.) The Features of Your Home Aren’t Well-Suited to Aging in Place
Someone who’s in their 70s today seems a lot different than they might have a few decades ago. We’re living longer and staying more active, and with that, rather than moving in with relatives or into retirement communities, more people are opting to age in place.
When you age in place, you maintain your independence and freedom, but your home has to have certain features to make that possible.
If you have a multi-story home, narrow doorways, or high-maintenance outdoor areas, these aren’t well-suited to aging in place, in which case you might think about downsizing.
5.) You’d Like a Change of Scenery
If you’re dreaming of moving to the beach or the mountains, the homes might be more expensive than where you are currently. If you downsize and accept less space, however, you can make those dreams a reality. You can wake up in a beautiful, vacation-like dream every day.
If you’re not tied to a physical location and you can live anywhere you want in the country or the world, why not take advantage of that fantastic opportunity?
6.) Your Housing Expenses Are Greater Than 30%
Sometimes downsizing isn’t just about a lifestyle change—you may need to make a financial change.
When you’re deciding how much of your budget to spend on housing costs each month, financial experts recommend no more than 30%.
That’s the standard used by the U.S. government as well. Any household that pays more than 30% of their income on housing is, by this standard, considered financially burdened.
If you’re still working, then this might not be an issue, but if you were to retire, you could quickly enter the financially burdened bracket. The cost of housing burdens goes up as expenses rise, and then your income tends to go down in retirement.
If you’re putting more than 30% of your monthly budget into housing, it’s a perfect time to think about downsizing.
You may be learning to live on a fixed income, meaning you need a smaller home with a lower monthly mortgage payment.
7.) You Want to Put Your Home Equity to Use
Finally, another good reason to think about downsizing is to put your home equity to use as income.
You can use the equity in your home once you retire, and coverage of everyday costs is the number one reason retirees often give for wanting to utilize their equity. It’s understandable why—equity may be your most valuable asset.