Bigger isn’t always better. Downsizing your home can be the best decision of your life. Living in a smaller home means lower mortgage payments, reduced energy bills, and more time with family and friends as you no longer have to spend your weekends cleaning a big kitchen and several rooms. But how do you determine whether it’s the right time to downsize?
1. You have an empty nest, and the house is now too big
The average home in Dallas, for instance, is about 1,862 square feet. While it may be just the right size when you are raising your children, it can become too big when they have all grown up and flown the coop. You will be left with a large empty nest instead. So, what should you do with all that space? You could rent some of the rooms out.
But what if you love and treasure your privacy? In that case, it makes much more sense to downsize. Chances are if you have lived in your home for a long time, you have probably built up considerable equity. The money left from your house sale can help you acquire a smaller home with less debt. You can also turn to companies with a sign “We buy houses in any condition in Dallas” on their office door. Such companies provide fast, hassle-free transactions.
2. You need to fund your children’s education
The average American has about $38,000 in student loans. That is a significant chunk of money, especially when you consider it will grow over the years as the borrower tries to pay it off. If you are determined as a parent to reduce the debts your child will incur while studying, you can sell your home and use some of that money to help your college kid get the high-quality education they need to succeed.
By downsizing, you make it easier for your child to begin life after graduation with lower or no debt.
3. You need to fund your retirement
Studies show that 22% of Americans have $5000 or less in their retirement accounts. That is disastrous as far as financial planning is concerned. If you don’t have enough money to retire on, you may be forced to work well into your old age. And if you have a financial emergency, you may be forced to declare bankruptcy just to keep creditors off your back.
The good news is that your home can be an asset that helps you catch up on your retirement goals. If you need to bridge the gap between what you should have and what you have in your retirement accounts, selling your home makes sense. It would also give you enough money to invest now so that it can compound over time to give you a reasonable financial cushion.
4. You need to free up more time and energy
As you grow older, it becomes much harder to use your physical energy to accomplish tasks. Again, downsizing allows you to maintain your home easily because there is less to work with. You will also be able to free up more time to spend with family or on a hobby or other things that matter to you.
When you’re in any situation above, do rethink your priorities as far as your home is concerned. It could be the best time to downsize your home and move into something more affordable and easier to maintain so that you can free up funds and time for other needs you may have.