Downsizing Your Empty Nest
You just returned home from dropping your youngest off at college, and you walk in the door to greet… Silence. Your once bustling, energetic space is finally empty, and the rooms that housed school projects, sibling wrestling matches, sports equipment and sleepovers now feel huge! Welcome to the Empty Nester Club!
One of the first things newly-made empty nesters should do is revisit their housing situation! Moving into a smaller home is a valuable consideration, and provides financial benefits (like saving money) and lifestyle benefits (like having less clutter in your life). Downsizing could be just the fresh start you and your family need!
Is Downsizing for you?
Downsizing might not make sense in every situation, but it’s worth a look if saving money and simplifying life appeal to you. Below is a list of questions you should ask yourself when considering selling your home for a smaller one:
- Is this the area where we want to spend retirement?
- Will we use this much space?
- Will a two-story home make sense in 10, 15, 20 years from now?
- How much time could we save not cleaning, tidying up extra rooms, or maintaining a large backyard?
- Just how often will people come to visit and stay with us?
- How much money could we save on utilities, taxes, and mortgage costs?
- What could we do with all that extra cash?
Financial Options of Downsizing
How exactly can you use downsizing to boost your finances? One of the greatest benefits of downsizing is spending less. Let’s take a look at how downsizing can do that AND take your money even further.
Paying off Debt
According to Northwestern Mutual’s 2019 Planning & Progress Study, the average American has about $30,000 in personal debt (excluding home mortgages). If you’re working hard on becoming debt-free, downsizing your home can help you contribute more money each month to reach your payoff date sooner.
Growing Your Nest Egg
Many are aware that retirement is becoming a steeper uphill battle. In fact, the U.S. Government Accountability Office found that 48 percent of the over-55 age group had absolutely nothing invested in a 401(k) or similar account, or in an individual retirement account. Yikes! If your retirement projections aren’t looking good, downsizing can help you build wealth towards your future. Consider dumping the proceeds from your sale into an IRA!
Saving for an Investment Property
A third (and our favorite option) could help you across the board. What if the money you made from the proceeds of your sale and the money you save from utilities, taxes, and mortgage costs could make you even MORE money? Purchasing an investment property could help you pay off your debt, grow your nest egg, and otherwise help continue your long-term profitability.
If you are beginning to feel like your home has more space than your ebbing necessities, talk to us about selling it and buying one that will house your next chapter!