You Can Flip The whole Page , it's a new Advertising Technique invented by Flippy

Is it Time to Downsize?

Could smaller be better? After our two daughters moved out of the state, we decided to downsize our home. The decision to downsize was complicated, so we took a careful look at the advantages and disadvantages of such a decision.

Advantages to Home Downsizing

  • Increased Cash Flow. If you're spending less on your mortgage, you are likely to have money left over every month to allocate for other needs or desires.
  • More Time. Smaller homes can reduce the time spent on household tasks, leaving more hours in the day to do something else more enjoyable.
  • Lower Utility Bills. It costs a lot less to heat and air condition a smaller home than a larger one.
  • Reduced Consumption. If there is no place to put it, you're much less likely to buy it. It might mean that less money is spent on clothing, food and consumer goods.
  • Less Stress. Less responsibility, smaller workload, increased cash flow and greater flexibility – added together, they all reduce stress. Articles I have read state that home owners who have successfully downsized sometimes appear happier when they're no longer overwhelmed by the demands of a larger home.

Disadvantages to Home Downsizing

  • Fewer Belongings. Moving to a smaller home would probably result in selling, giving away or throwing out furniture, books, kitchen supplies and emptying out the garage, basement and attic. Some people form emotional attachments to stuff and find difficulty in parting with it.
  • No Room for Guests. Hosting a large dinner party might be out of the question in a smaller home. Out-of-town guests might need to stay at a hotel when they come to visit.
  • Space Restrictions. Some home owners report feeling cramped because there is less space in which to maneuver. It's hard to get away to enjoy private, quiet time, because there are fewer rooms to escape to when needed.
  • Less Prestigious. Sometimes appearances are more important than comfort levels.
  • Lifestyle Changes. Moving to a smaller home means changing a lifestyle, and some people are resistant to change. There is a certain comfort level obtained by staying with what is familiar.

Let’s look at the financials behind downsizing. Even if the mortgage on your larger home is paid off, taxes and upkeep can still put a sizable hole in your cash flow each year. Given that annual property taxes over 1 percent of a home's value (according to the Tax Foundation) and annual maintenance bills average from 1 to 3 percent (according to Freddie Mac), carrying costs alone on a $3,000,000 home total about $90,000 a year.

Carrying costs are only part of the equation. Households with 65- to 74-year-olds spend an average of $7,033 on transportation each year, according to the Bureau of Labor Statistics.

Move to a community where most amenities are within walking distance and you can trim that bill as well.

Even if you find that a smaller home costs almost as much as your current residence, you should begin to see immediate savings in other areas, less money for insurance, for cleaning, and for yard work. It is typically cheaper to run a small house. And those savings, will compound over time.

Should you sell first and then buy, or buy first and then sell? Generally, it's better to sell your existing home before buying a new home. The reason is it keeps your emotions in check and you don’t end up with two homes.

Again, moving is hard. We sympathized with our own parents who described their decision to downsize as “traumatic”. But today, our parents have no doubt they did the right thing and we feel the same way about our decision. You come to grips with the inevitable, that you can't maintain a big home forever, physically or financially. It's bound to get more difficult. Our advice? Think about it – sooner rather than later – and act on it.