Have you ever thought about downsizing and starting over?
For anyone that’s found themselves drowning in debt, being house-poor or just tired of working 24/7, it’s probably an idea worth considering.
But is it really possible?
In the last 3 years our family has gone from a 2700 sq ft home on an acreage to a 1200 sq ft rental in the suburbs and finally to our new 950 sq ft townhouse.
And we’ve never been happier! (You can read more about our story here)
While it can easily become a reality for you too, it’s always important to look before you leap.
Here are 5 helpful tips to you get on track before downsizing and starting over:
Choose Your Focus
Sit down and make a list of everything that really matters.
Do you love your job? Is there a hobby that you can’t live without? Do you really need a yard for the dog? These are all questions that can help you focus on where you need to be.
When we first downsized we thought a garage and large backyard was an absolute necessity. Now we have neither (and we love not paying the extra mortgage and property tax for that wasted space!).
Think about how you can work around your needs to save money. In our case that was investing in a large storage shed to make up for the garage , and moving next to a green space and off-leash park for the kids and dog.
For more ideas check out How to Set Goals for the Life you Actually Want.
Do the Math
Downsizing isn’t always the best solution so make sure you look for hidden costs.
Selling a property can be expensive if you need to do repairs or upgrades first, and realtor fees can eat up all your profits.
Consider renting out your home instead until you have enough equity to sell with a decent profit.
You also need to factor in moving costs, closing costs (if you’re buying), a change in cost of living or income, longer commuting distance etc.
Just because a new location seems cheaper, doesn’t mean it’s going to be an easy ticket to financial freedom.
Here’s some more points to consider: 10 Reasons Moving Always Costs More Than You Think
Don’t choose your new home based on price alone. Think through your typical week and how the space will feel.
Having a functional layout and plenty of storage can make your transition from a larger home much easier (and is often worth paying more for).
We chose our townhouse based on functionality and efficiency for a family of four. Despite being almost 1/3 of the size of our previous home, it never feels too small.
Always look for a home that will suit your needs and your budget.
To help find your ideal home size, check out How Much Space Do You Really Need?
Sell (Almost) Everything
Now’s the time to purge! Take advantage of your local online classifieds to sell all the household items that you won’t need.
Us the money to help cover moving costs, or to purchase furniture for your new space.
You’ll be amazed at how much stuff you have, and how little you’ve actually used most of it!
Take a minimalist approach and only keep what you really love.
For more inspiration see How to Sell All Your Stuff and Make $7,000 in One Month
Now that you’ve got a solid plan that will help free you from debt (or stress) it’s important to stay on track.
If you’ve managed to lower your cost of living, make sure the savings are being invested back into your financial future.
Downsizing and starting over is only worth it if you’re willing to make changes to your lifestyle.
Otherwise it’s just a whole lot of work, and can actually set you back further financially.
Have you ever though about downsizing and starting over? Share your thoughts in the comments below!