Most people aim to buy their own house and achieve the American dream. This can provide a safe and comfortable place to raise a family, and with ownership, there’s the opportunity to build equity and increase one’s net worth.
However, your financial situation can change rapidly. Perhaps you earned a sizable income in the past that afforded many comforts and extras. A job loss, retirement or a divorce can have an impact on your income, and if you find yourself with less disposable cash, downsizing may be the only alternative. This isn’t the most exciting situation to deal with, but the sooner you act, the sooner you can get your finances back on track.
Downsizing includes the task of de-cluttering and moving out items. Since you’re looking for a cheaper rent or mortgage, your new home will probably be smaller than your present home. Understandably, you may want to retain as many of your possessions as possible. But with less square footage, this isn’t always possible. Need a practical solution? Here are three simple tips for downsizing and de-cluttering.
1. Look for a place with plenty of storage. Although you may sacrifice square footage to save money on housing each month, you don’t have to sacrifice storage. Pay close attention to the closet space and other storage areas in the homes or apartments you check out. Can the closets accommodate your clothes? Is there a utility closet or attic space? Adequate storage lets you keep more of your treasured belongings.
2. Get rid of some items. Be honest with yourself. In all likelihood, there are several items that you can part with to free up space in your new house. If you have clothes or shoes that you haven’t worn in over a year, donate or give them away. If your new house has less living space and fewer bedrooms, sell your excess furniture and generate extra cash. This extra money can help with your moving expenses, or perhaps pay down debt and other bills before you move.
3. Find a local storage unit. Maybe you’re retiring, selling your house and moving to sunny Jacksonville, FL. If moving from a big house into a condo or smaller house, Uncle Bob’s can provide a safe home for items that you were unable to sell or donate. Rather than clutter your new space with extra boxes and furniture, take these items directly to your storage unit.
Some people downsize by choice in order to simplify their lives and enjoy their earnings. Others, however, downsize to avoid financial ruin and credit damage. Regardless of the reason for seeking cheaper, smaller accommodations, downsizing can have a positive impact on your finances. The extra money can help increase your personal savings, pay down credit card debt or alleviate living paycheck-to-paycheck. Rather than view downsizing as a step backwards, view it as a step in the right direction. Besides, the less you owe, the sooner you can reach financial freedom.