A quick outline
Downsizing a home is not just for those who plan on retiring, many people may find themselves in a situation where they need to downsize their home, as their life changes. To help minimize the stress of this process, we’ve put together a short guide on how to downsize your home.
Table of Contents
There comes a time in most people’s lives where they need to downsize. There are a variety of reasons for this; perhaps the kids have moved out and there’s too much space, or a couple is planning on retiring, or a family needs to look at saving money.
Whatever the reason, downsizing can seem like a daunting process, however with the right preparation and guidelines, the process can become smoother and more manageable. We’ll take a closer look at how to downsize your home and minimize the stress as much as possible.
When should you downsize your home?
There are various reasons why people choose to downsize their homes, and as our lives change, sometimes downsizing becomes the best option. Whether it’s for retirement, or you’re moving cities, or you are focused on saving money, here are a few signs that it’s time to downsize your home:
- When your monthly housing expenses have surpassed 30% of your monthly income: This means that you’ll be left with very little money at the end of the month, and according to the US Department of Housing and Urban Development (HUD), paying more than 30% per month towards housing expenses classifies you as “financially burdened” and more than 50% as “severely burdened”. Whether you’ve had a salary cut, lost your job, or simply found yourself in a difficult financial situation, this is a clear sign that it’s time to downsize.
- You can’t keep up with the home maintenance required: If your home requires a level of maintenance that you can no longer sustain for whatever reason, it may be time to downsize. Rather sell your home while it’s still in good condition than wait until your maintenance has fallen far behind and the home has fallen in disrepair.
- Your needs have changed: If you’re now a senior and no longer need a big space, or all your children have moved out and you don’t need the spare rooms, or you can no longer have a house with stairs, you may need to downsize. While your home may have been perfect for your needs once upon a time, there comes a time when your needs change and something else might suit you better.
- You are no longer tied to the specific location: Perhaps you’re working remotely, or your children are living in other states and you no longer need to be in that location. This can be a good time to downsize and use the opportunity to move into a neighborhood that suits your life better.
- You aren’t using everything the property has to offer: If you’re living in a property with various rooms or features such as a swimming pool or games room that you are no longer using, it may be time to consider a smaller home without as many features. Maintaining the expenses of a home that you aren’t using to its full potential doesn’t make sense, so this a big sign that it’s time to downsize.
- You’re ready for a change in lifestyle: Our lives are constantly in flux, and while your home may have suited your lifestyle initially, things change and this may not be the case anymore. If your lifestyle changes, for example there is a divorce or you’d like to save more money to travel, downsizing your home can be a good solution.
How to downsize your home - Step-by-Step Guide
Step 1: Understand your ‘why’
Fully getting to grips with why you need to downsize is the first step in the process. If it’s due to a change in lifestyle, this will have a big impact on the downsizing process in terms of what you keep and get rid of. For example, if your goal is to save money and improve your cash flow, you’ll probably want to keep the process as cheap as possible, by selling what you can and using as many large items as you can.
Step 2: Get organized
Downsizing can be daunting, so it’s important to be prepared before you begin. This is where creating lists and forming a timeline come into play. Part of this involves consulting moving companies to find out their time estimates, so that you can work around these.
Make lists of each room and begin getting ready to sort things into different areas, for different purposes. These lists should include smaller, more manageable projects which break the process up into bite-size chunks.
Step 3: Set a budget
Along with downsizing your house comes a different budget. Before you downsize, work out your new budget and see what you have left for any new purchases you may need to make. This will also help you figure out whether you should sell items in your current home, to help the process along.
Step 4: Declutter and sort
You can begin sorting large items in the house first. Go through your appliances, dining room set, couches, tables and any other larger items, to decide which to keep and which to sell or give away. For the decluttering and sorting process, using a color-coded system is a big help. You can buy stickers for the items and use different colors for each purpose. For example, green for keep, yellow for donate, blue for sell and red for trash.
Once you’ve sorted through all the large items, you can begin decluttering one room at a time. There are various methods you can use for this, such as Mari Kondo’s KonMari method. Get rid of anything you can do without and anything that isn’t essential. Depending on the size of your new home, you may need to be ruthless with this process.
Your sentimental items will need to be kept to one side and sorted through slowly and decisions made as to what the most important items are, such as family heirlooms.
Step 5: Measure your new home
Make sure to visit the new home and measure everything so that you know the dimensions of each room and can work out what to take and what to get rid of. This will be vital information for furniture and appliance decisions, and later on for décor choices. You’ll need to know the square footage and shape of each room, so that you can work out which items to take and what you’ll need to buy.
Step 5: Do the admin
There will invariably be some paperwork involved with a move, so now is the time to get the admin side of your move done. This involves changing your address with the post office and anywhere else you’ve given your address, talking to your utility providers and so on. Getting a head start on this, before you move, is the best way to do it so that you avoid your mail being sent to your old address.
Step 6: Start packing
Now that everything has been decluttered, and you’ve marked each item according to its’ next step, you can begin packing. You’ll need to get boxes and tape, and make sure to label the boxes according to which room they belong, what’s in them, and which boxes should be opened first. You can do this slowly across many days, to minimize the stress of the process. Leave your essential items until last as you’ll need these in the meantime.
How do you prepare for downsizing?
Here are a few tips to take note of, when you’re preparing to downsize:
- Ask yourself important questions: Ask yourself what your life events will look like and whether downsizing works for this purpose, what the cost will be, what you’ll miss the most, and whether the size is really necessary. This should be ascertained before you begin looking for a new, smaller home.
- Preparation is key: To avoid getting overwhelmed by the process of downsizing, your preparation is important. Make sure that you take the time to make lists, get organized and figure out a system before you begin. So that you already know how you’d like to run the process.
- Understand why you’re doing it: Once you’ve got your head around the reasons why you need to downsize, it will help you become clearer on what you need to keep and get rid of. It will also make the process more manageable by keeping your goal in mind at all times.
- Take measurements: Knowing the size of the space you have to work with in the new house will be vital for the downsize. This is so that you can make sure your existing items fit in the house, or purchase the right items to fit. Don’t forget to measure furniture as well, to see where it can fit.
- Take photos: Another useful tip is to take photos of each room in the new house before you begin downsizing. This will not only give you inspiration but also help you with the process of knowing what to keep and how to set up each room.
- Consider renting storage space: One way to take the pressure off is to consider renting a storage unit, so that you don’t have to make decisions on every single item right away. You can leave some items in storage spaces and decide whether you will keep these or not, once you’ve moved and seen what you can and can’t fit into the new house.
What to do with your stuff when you downsize
There are a few options for you when you’re getting rid of items from your original house:
- Keep: You can keep the items that you’ll be needing in the new house, which means any large items that will fit are a good idea to keep, as well as smaller items that you have space for.
- Give away: Any items you don’t want can be given away to friends, family members or someone else that you may know who needs them.
- Donate: You can donate any extra items that you don’t need to various organizations in your area, such as GoodWill, the Salvation Army and Habitat for Humanity. This will ensure that the items go to a place where they’ll get used by someone who needs them.
- Sell: Selling household items that are in good condition, that you no longer need, is a great way to recoup some costs. You can sell these online on various marketplaces, including social media, or by using a traditional yard sale.
- Throw away: Some items may need to be thrown in the trash, if they’re damaged or no good, or simply too old. This is your go-to for items that won’t be of use to anyone else.
At what age do most adults think about downsizing?
Many people who reach the age of 55 or older begin to consider downsizing. It’s at this point where people often have no children left at home and property maintenance becomes troublesome. There are typically sections of the house that are no longer being used, and so it becomes difficult to justify living in such a large space for just 1 or 2 people.
Should you sell or rent your home during the downsizing process?
The decision to rent out your home or sell it largely depends on your financial situation. Some people choose to invest in a smaller home and rent their original home out, in order to generate a passive income. Which turns their original home into an investment property.
However, for some people this isn’t an option if they are relying on the money from the sale of their original home, to purchase the new one. In this case, it makes more sense to sell their original house and buy a new, smaller home. For those who are going this route, make sure to pay attention to the red flags when buying a house.
There is no one-size-fits-all when it comes to decisions around downsizing, and this decision particularly hinges on the reasons why you’re downsizing, and what your financial situation looks like. It may also depend on the real estate market at the time, so if it’s a seller’s market you may get more money if you sell the home rather than renting it out.
Final thoughts
Whether you’re downsizing to save costs, to generate a passive income or to retire, the process doesn’t need to be a major cause for stress. Using the preparation tips we’ve mentioned above and following the right process, downsizing can be a successful venture for any family who needs to find a new space.