Minimalism is growing in popularity. This wave of minimal living seems pretty appealing–maybe Millenials are onto something! However, it’s not just the young ones who see the benefits of living smaller. Downsizing your home can really help to trim the fat from your monthly expenses. You can invest the money you save in travel, your kids’ education, or even real estate. The possibilities are endless, but you first need the commitment to make a move. Here are some tips on how downsizing your home can help you save more than just a small chunk of change.
Reducing Mortgage Payments
Mortgage payments are typically the most significant monthly expense most people have to face. So big that, on average, it accounts for about thirty percent of a person’s gross income! Downsizing your house can have a dramatic impact on mortgage expenses. At a minimum, it can be a significant cut in your monthly payments, a substantial boost in the amount of your available money, and massive savings in interest over the life of your mortgage.
Slash Those Taxes
Not only does downsizing your home lower your mortgage payment, but it is also an easy way to minimize real estate taxes. Real estate taxes are generally the second largest expense for homeowners and, unlike the mortgage payments, you can’t pay this bill off for good. While you’re still paying your mortgage, you likely have an escrow account with your lender in which you pay property taxes and homeowners insurance.
The amount you spend every year depends on the cost of the mortgage. The higher the mortgage, the more you have to put into the escrow account. And the lower the mortgage, the more you have to put into your bank account.
Minimize Monthly Expenses
The cost of lowering your utilities are big bills you can downsize if you move to a smaller place. It’s great if you’re conscious about turning off the lights. Keep in mind, though, that most households spend forty-two percent of the energy used on gas. You use gas in your furnaces and general appliances. If you have less space to regulate the temperature, you’ll have more money in your pocket at the end of the month. Also, it’s better for the environment because you’re consuming way less energy (to live just as comfortably!).
Over the long term,the less space you have to maintain equals less money spent. If you move to a smaller area, you can forget about landscaping, paint and decorate fewer rooms, and upgrade less dingy counter space with granite. Replacing things that are worn out or broken won’t be such a nightmare, and you’ll be saving money because these things are smaller!
Some places are just cheaper to live than others. Certain neighborhoods have lower real estate taxes and income taxes. Moving to a new neck of the woods could also be a chance to lower your overall cost of living. Location can have a significant impact on the price of groceries, gasoline, car insurance, and commuting expenses.
Seize Opportunities to Make Money
If you’re downsizing, you might be able to trade in your huge house and use the profit from the sale to purchase your a cozy little home in cash. If you are really in great shape financially, you might even pay off the new home and have tax-free profits from the sale left over from your old house to invest with cash.
Reducing your mortgage gives you more money. What will you do with the money is the big question. Saving just a small amount each month for the next few years will add up to monster amount over the life of the mortgage–and that’s without additional investing!
Saving money on Real Estate shouldn’t have to be difficult. That’s why we created Clever. Clever uses top local real estate agents to lighten your load and help you save money. Call us today at 1-833-2-CLEVER or fill out our online form to get started. With Clever, you’ll be on the fast-track to downsizing in no time!