Downsizing is a concept that is becoming increasingly popular these days. From adventurous nomads who want to loosen the ties of unnecessary possessions to become minimalists, to the millions of Baby Boomers who want to live in more manageable homes, downsizing is a common solution to simplify daily living. So when is it time to downsize your home?
Should You Downsize Your Home?
What’s interesting about downsizing your home is that it’s the opposite of how much of society has trained us to measure success. Advertising and marketing messages tell us that bigger is better, we need to keep up with the Joneses, and that our self-worth is tied into the possessions that we own. Unfortunately, a 2015 report published by Pew Charitable Trusts found that 8 out of 10 Americans are in some sort of debt and 69% of those surveyed believe that non-mortgage debt was a necessity for them. “Americans have a love-hate relationship with debt. They know they need debt, but they don’t actually want it,” said Diana Elliott, research manager for financial security and mobility at Pew.
One way that people are choosing to eliminate debt and the burden of expensive mortgages is choosing to relocate to a less expensive area or to purchase a much smaller home. This in turn will decrease utility bills, property taxes, and other high upkeep costs. This is downsizing – and if you’re looking to reduce your expenses and don’t mind sacrificing your space, it’s probably the right choice for you.
When Should You Downsize Your Home?
If you are planning to move, then it only seems natural that now is the perfect time to downsize. There are basic questions to ask when you’re looking for a new home, but if you’re thinking about downsizing house expenses, consider these additional topics:
- How much room do I really need to live comfortably? Is it realistic for my spouse and I (and all of our most treasured items) to go from a 3,000 square foot house to a 400 foot tiny house?
- How much money do I need to retire and maintain a comfortable standard of living? How will downsizing contribute to my bank account on a monthly basis?
- What are my life goals? What’s most important to me? Do I want to entertain in a large home, or have the flexibility to travel? Will I need space to care for any family members or friends?
- If you have owned your home for decades, is it really cheaper to downsize? For example, let’s say you bought your home in 1975 for $70,000 that is now worth $700,000. You could be subject to a big capital gains tax on the proceeds. “The IRS excludes capital gains of $250,000 for an individual or $500,000 if married and filing jointly,” explains Kayleigh Kulp on CNBC. “Anything above that amount is subject to a 15 percent capital gains tax. If a couple already has over $466,950 in ordinary income in the year they sold their home, they are subject to a 20 percent tax.” Be sure to talk to you tax advisor or financial planner to create the best plan for your future.
Additionally, if you’re a Baby Boomer or over 55, consider whittling away excess tchotchkes and clutter while you have the energy and opportunity to do so. It’s an emotional process that many put off until they have to move, and by then packing up a lifetime’s worth of memories makes an already stressful situation more painful.
How to Downsize Your Home
Getting rid of an abundance of personal items can cause you to run the gamut of emotions; yes, it will be heartbreaking and there will be many moments of indecisiveness, but it will also feel freeing and like a burden is being lifted. Here’s how to get started:
Make five zones: toss, donate, give away to family/friends, keep, and undecided. Go through each room one at a time and determine which pile the items go into.
- Toss – The toss items can later be sorted into recycling, shred, or garbage.
- Donate – Things you wish to donate can be packed up for a local charity. If you really want to stay accountable, book a Dolly a few days in advance to ensure you’ve completed the purging by pickup day. Helpers and a pickup truck will come to haul your stuff to the local Goodwill, Salvation Army, or other donation center you choose.
- Give Away – If you know your daughter wants Grandma’s silver serving platter or your grandson would cherish Grandpa’s tools, get a sharpie marker and painter’s tape – it won’t cause damage like packing tape or fall off like Post-Its – and label the individual pieces. Set a date to have everyone pick up their items. After a specified date, sort the unclaimed items into donate or toss.
- Keep – Be realistic about the size of your new home. Do you really have room for five bedspreads or two sets of china? Set up a floor plan of your new home and decide where each piece will go. If there’s not room for it, then maybe it’s time to let someone else cherish it.
- Undecided – Sorting through decades of your possessions is not fun or easy. If you’re not sure whether an item belongs in the keep or give away pile, put it aside until the end. You don’t want one item to stall your momentum or cause you to feel sad. One tip that home organizers suggest is to hold the object and assess your feelings. If you feel joyful and overwhelmed with pleasant memories, keep it. If the item leaves you feeling apathetic or sad, it might be time to let it go.
- Sell It – Okay, this is a bonus pile for extra credit. If you are extremely ambitious, you may want this sixth category for items that you don’t want to keep, but that could possibly bring in some cash. Facebook Marketplace, Craigslist, LetGo, and OfferUp are all great places to post your items for local sale.
One of the best ways to motivate yourself to downsize is to find your new home. This way you’ll be excited to start a new chapter instead of focusing on the past. When you’ve found that perfect smaller house and you’re ready to move, book a Dolly. Our Helpers understand that moving isn’t just physically challenging, but that it has a big emotional impact, too. We can make moving a breeze so that you can transition easily into your new downsized home.
Dolly helps you move on your schedule and at an affordable price. Book now and see the difference: https://dolly.com.