Upsize your wallet by downsizing your living quarters

May 29, 2014

Upsize your wallet by downsizing your living quarters

Downsizing a home isn’t only for retirees and empty nesters. In today’s economic environment, downsizing a home can make a lot of financial sense.

Companies habitually shut down sub-performing facilities, discontinue product lines, or take other drastic measures to free up the firm’s finances. Intelligent damage control. The same thing occurs, on a smaller and much more personal scale, when you downsize your living quarters.

A smaller home could mean a smaller price – and a smaller payment. If you lose your job, wouldn’t a 50 percent smaller payment on your house, condo or flat be nice? And if you don’t lose your job? How about all that you can undertake with a bit of extra cash in the till?

A monthly mortgage payment or even rent is generally the largest single expenditure people face. It regularly accounts for 30% or more of the monthly expenses. Downsizing your living quarters can have a dramatic and direct effect on those 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 if you are paying back a loan. And what about the attractive opportunity of using the proceeds from the sale of your larger home to buy a smaller one obviously resulting in a much smaller mortgage. Or maybe no mortgage at all…

So by downsizing your living quarters, you may be upsizing your lifestyle!