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How to Decide Whether to Downsize to a Smaller House

Updated on August 4, 2012

Should You Downsize Your Home?

Are you trying to decide if you should downsize to a smaller house? If so, you're part of a growing trend. It used to be that people would live in a large family home until they retired in their late fifties or early sixties. And even after retirement, there were traditionally plenty of people who stayed in that same family home. But now, with the economy providing little confidence and many people out of work, it's a decision younger people are considering as well. There are many benefits to downsizing your home including saving money, however, there are some downsides as well. If you're seriously considering selling your large home in favor of something smaller, you need to look at the decision from all angles.

Save money by downsizing to a smaller house
Save money by downsizing to a smaller house

Benefits of Moving to a Smaller House

You'll Save Money: This is the most obvious benefit of moving to a smaller house and the one most people think of first. When you sell your large home in favor of a smaller, less expensive one, your mortgage payment will be smaller as well. This is especially true if you take any equity you have in your old home and use it for a large downpayment on the new home. In fact, you could be in a position to purchase your new home for cash, depending on your equity position.

The mortgage payment isn't the only cost that will decrease with a smaller home. You'll also save money on property taxes, insurance, utility bills from air conditioning and heating, and home maintenance and repairs. These savings further sweeten the deal when evaluating the decision to move to a smaller house.

Because your housing expenses are less, you'll be in an enviable position to invest more, work less, spend more on vacations, fund your children's education, or funnel some of your savings into your mortgage payment to pay it off early.

You'll Experience Less Stress: The peace of mind you'll experience by putting yourself in a better financial position is immeasurable. By reducing your monthly outlay for housing you'll have so many more options because you'll no longer be a slave to the mortgage payment. In addition, you'll have fewer rooms to clean, reducing stress and allowing for more time for relaxation and fun. And finally, you'll have less stuff simply because you'll have less space for it all. For many people, having fewer belongings leads to less stress from maintaining it all.

You'll Be Eco-Friendly: Smaller homes use less lumber, less water, less electricity, and less gas. They're much friendlier to the environment and that's something you can feel good about. In addition, when you own a smaller home, you can make energy saving updates like adding insulation, new windows, and solar panels more easily since they simply cost less for a small home.

Drawbacks of Downsizing Your Home

With all of the benefits of moving to a smaller house, it may seem like a no-brainer to just go ahead and make the plunge. However, there are some drawbacks that you'll need to consider first.

You'll Need to Get Rid of Stuff: Okay, so this was listed as a benefit of downsizing but it can also be quite painful for some people. If you're in a larger home now, it's likely filled with stuff including furniture, clothing, knick-knacks, artwork and more that you've collected over the years. It can be emotionally difficult to sell or give away these things, even though you know rationally that you don't need them.

You May Feel Less Successful: Some people rely on the things they own to give them a measure of status in life. A large house is one of those things that people use to show where they fall on the economic spectrum. Therefore, downsizing can make some people feel less successful, almost as if they've failed.

You'll Have Less Space: Again, there are plenty of benefits to having less space but the reality is that you could very well be tripping over each other in a smaller house and fighting over use of the bathroom. If you're soon going to be an empty nester, then this will be less of a concern but if you're moving your family into a smaller home, you could feel the pain. You'll also have less space for house guests and having people over for gatherings and parties. If you like to entertain, this could also be a major problem.

An Extreme Example: The Tiny House Trend

How to Make the Final Decision

Now that you've weighed all of the pros and cons of moving to a smaller house, it's time to put it all together. Before you do anything, sit down with your family to talk about your ideas. Make sure you cover and agree upon the following topics before making the move:

  • Are there rooms in your house that you aren't using? If you use a room fewer than six times per year, experts say that you can do without it.
  • What's the square footage of the rooms you aren't using? Subtract this number from the total square footage of your current home. This is the size of home you can look for as you downsize.
  • What can you absolutely not live without? If you have a family, this could be an extra bathroom. Or maybe you have a room devoted to a hobby or fitness pursuit that you don't want to do without. Or perhaps you're a gourmet cook and want a spacious kitchen.
  • Start talking about the stuff you own and what you absolutely must keep and what you can get rid of. Start selling or giving away the things you decide to discard.
  • If you're feeling like a failure, try to remember all of the benefits of downsizing. Status is great but it can't give you the peace of mind you'll likely get by simplifying your life and reducing your monthly housing expenses.

Ultimately, the decision to downsize to a smaller house is a tough one emotionally, even though rationally it makes a lot of sense. It's important to sort through your emotions and think about the benefits, which can be substantial.


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    • SD Dickens profile image

      SD Dickens 5 years ago

      Thanks for the comment tipstoretireearly!

    • tipstoretireearly profile image

      tipstoretireearly 5 years ago from New York

      Good hub! Downsizing leads to a simpler lifestyle, which can be much more enjoyable since we don't need to worry so much about our "stuff".

    • SD Dickens profile image

      SD Dickens 5 years ago

      Hi Michelle - That sounds awesome...congrats!

    • MichelleRobert profile image

      Michelle Robert 5 years ago from Down by the River

      Great blog about a subject dear to my heart! I love living in a little house. We have a mortgage free, 600sq. ft. little house on about 20 acres in the boonies of Louisiana. No traffic, no time clock, no boss. I support myself by writing and freelancing. My stress level has never been lower.

    • SD Dickens profile image

      SD Dickens 5 years ago

      Hi Sue - Good luck and thanks for reading!

    • profile image

      sue 5 years ago

      so happy to find this blog. just sold my big house with 2 acrea lot 3 days ago and plan to move to 700 sf bungalow. im at 66 yo. retired, no bill to pay but too much work for big house.i wish i did this years ago.i will donate all my furnitures, clothing, knick knack... and swear only carry what ever i could on my back.some blankets and some pillows, may be some pots and beds, no furniture, i will sleep in my sleeping bag. i will be freed. i can't wait for close of escrow.

    • doodlebugs profile image

      doodlebugs 6 years ago from Southwest

      Downsizing is the way to go. My mother in law recently moved into a home that I helped build. It has zero energy bills thanks to solar panels, smaller size and spray foam insulation.

    • thefamilytoolkit profile image

      thefamilytoolkit 6 years ago

      Thanks for the informative article. I'd love to downsize right now but we can't sell our current house for enough $ to recoup our out-of-pocket costs. Hopfeully the market will catch up soon.

    • Stephanie Henkel profile image

      Stephanie Henkel 6 years ago from USA

      Talking about pros and cons of downsizing is very helpful for people considering such a move. I do think it's different for a family to downsize than it is for retirees or empty-nesters. Maybe downsizing isn't for everyone, but I can vouch for the fact that owning less stuff is very freeing. The points you brought up are excellent and very true. Voted up and useful.

    • the clean life profile image

      Mark Bruno 6 years ago from New Jersey Shore

      Oh yes, believe me it is like the world is lifted off your shoulder. we have never been so happy in the 30 years we have been married. My next step is to downsize my job, meaning finding something with less stress and finding something here at the shore a little happier. (I run a large cemetery) for the last 21 years. I have less bills so I can find something with less pay now. no more 120 mile round trip to work I hope. I wish you all the luck in your journey and as I said it is the best thing I have ever done, not only for me but my wife too.

      Mark (The Clean Life)

    • SD Dickens profile image

      SD Dickens 6 years ago

      The Clean Life - I'm impressed that you did this! You're situation sounds great...I love the Jersey shore. We're just starting to think about downsizing now that my older child will be going to college next year. I think it'll be difficult at first but once the move is done, it will bring tremendous benefits.

    • the clean life profile image

      Mark Bruno 6 years ago from New Jersey Shore

      I had to read this hub. I caught my eye right away when you posted it. Excellent advice and excellent hub. I can to everything you have sad. I just sold my larger home with over a 200,000.00 mortgage hanging over our heads, plus interest which would probally be about 400,000. I started to clean out, throw out things I have been draging around with me from house to house. My father always said if you have to look at something twice you don't need it and I took his word and went with it. I sold house and bought a manufactured home in a 55+ community at the Jersey Shore. Mortgage free with no more worries of high mortage payments, no taxes to pay and only pay my one HOA fee and I'm done. The stress was killing me with working hard and spending it on a house and like you said, sometimes to impress others withg what you have. Believe me they don't care. If anyone can downsize I would certainly recommend it.

      As far as the things I kept but will not fit in the house I rented a storgage unit right up the street and it is perfect for me. The best thing is I am living 6 minutes from the Ocean and the Bay is right down the street. Same views as the big houses but mine is PIF:)

      Voted Up and Useful !!

    • SD Dickens profile image

      SD Dickens 6 years ago

      Thanks for the feedback Victoria Lynn!

    • Victoria Lynn profile image

      Victoria Lynn 6 years ago from Arkansas, USA

      Great hub! Voted up among other votes! It is a difficult decision, but you covered all the questions one should ask. For me, I had to "up-size," as I was feeling the walls close in on my after 12 years of living in an 800 square foot house with a dog and 5 cats. I like stuff, and needed more space for it. I liked to entertain now and then, and my kitchen was tiny. I found a house 2 1/2 times the size with a screened-in area and outside run for the animals, a garage, storage, and plenty of rooms to spread out in--and was in heaven. So, I think it can go both ways, at least it did in my case. But, who knows, maybe later on, I'll want to simplify, I will also want to downsize. A lot of people do. Very well-done hub. Makes me think. Definitely one to read again.