Simplifying the place we live is a phenomenon usually associated with retirees and empty-nesters that don’t need as much space with their children grown up and moved into their own homes. However, it’s also becoming a popular move for many hard-working, money-smart homeowners, simply because it makes a lot of financial sense. One can move from their big house to a Saskatoon townhouse for sale and find that they have a lot more money left over at the end of each month to live a higher quality of life. Soaring home prices, soaring energy prices and high gasoline prices all add to the cost of living. As a result, the financial benefits of moving to a smaller place are numerous, and well worth exploring. Whether you like to take trips, sock money away for retirement, or just live comfortably within your means, downsizing your home can downsize your expenses.
Reducing the Mortgage Payments
The monthly mortgage payment is generally the largest single expense people face. It routinely accounts for 30% or more of their gross income --- often accounting for 50% of net income. Downsizing your house can have a dramatic and direct effect on mortgage expenses. At the very least, it can result in a significant reduction in your monthly expenditures, a significant increase in your free cash flow and massive savings in interest over the term of your mortgage.
Finding the Right Location
Downsizing your house is a great way to lower your real estate taxes due to the lower assessments on a smaller home, but it's also an excellent opportunity to move yourself right into a new neighborhood --- preferably one with lower real estate taxes and lower income taxes. Better still, it may be a chance to move to place that has a lower overall cost of living. The site of your primary residence can have a big impact on the cost of groceries, gasoline, car insurance, commuting and more.
Lowering the Cost of Utilities
The cost of utilities is another big bill that's easy to downsize if you move to a smaller place. If you've got less space to heat or cool, you should end up with more money in your pocket at the end of the month.
Cutting the Maintenance
Over the long term, less space to maintain translates into less money spent. If you move to a smaller place, you can cancel the landscaping service and the pool boy. When things do eventually need to be replaced, you'll save money by fixing the smaller roof and laying 1,000 square feet of carpet instead of 3,000 square feet.
Downsizing Presents Opportunities
When you move to smaller place, reducing your expenses is just one of the opportunities that will become available to you. The other part depends on what you do with the money that you save. Just saving $500 per month for the next 10 years turns in to $6,000 per year. That's $60,000 over the course of a decade, even if you just tuck the money under your pillow. Over the course of 15 years, investing in the stock market should turn that cash into $150,000 with ease, if the stock market is kind to you. Of course, you can also take some of that cash and use it celebrate your freedom. A shopping trip, season tickets to the local baseball team, a new car or a chance to travel could add some fun to your personal agenda.
Looking Beyond the Money
In addition to substantial cost savings, moving to a smaller place has other benefits. For example, you're likely to have substantially less work to do around the house. You could even purchase a Saskatoon condo for sale and delegate most of the chores to the maintenance man. With your new found time, you can start a hobby, visit friends, travel, or simply relax instead of spending hours cleaning, improving, or fixing some large house that you no longer need.