When building a family, couples tend to buy larger homes, and it is for a good reason. Bigger homes provide more space for the growing family. But once the kids grow up, move out of the house and start their own families, what happens then? Admit it or not, this point in your life will happen, and when it does, you might be sitting on a vast empty cavern which you are paying with your life savings.
The decision to downsize a home generally comes with a few days of regret. A family home is often filled with memories of your children growing up. But there are more crucial reasons why empty nesters decide to give up their huge family homes for a smaller, more personal property.
Minimalist and Lower Cost of Living
Over the years, people are encouraged to live simpler with fewer things and clutter. Downsizing opens up the chance for you to finally declutter and give up some possessions that you have been keeping for many years. Moving into a smaller home also means there are lower utility fees, insurance, and taxes. You can now monitor your spending and enjoy the quiet, simpler living. You will start saving more money to pay off all your debts.
Pay Off Your Debts
In case you decide to sell your home to purchase a new smaller home, you should connect with FHA loan providers in different areas. The money you get from selling your home forms part of your retirement fund, travel, or emergencies. Then you can reduce your monthly utility bills to save more for more important matters like paying off debts. Downsizing and living simply can help you get into retirement with struggling over high property taxes or inflation.
Saving Money for Emergencies and Retirement
After dealing with your debts, your next focus should be your 401K contributions. Pooling your savings for this cause will also reduce your tax debt. Fortunately, the IRS allows people aged 50 to more to increase their 401K contributions. You can also make necessary adjustments to your health savings for more tax benefits.
Preparing for Downsizing is Key
Downsizing should not be an immediate decision for empty nesters. It is understandable for some to hold on the memories and items with sentimental value. You have to be prepared mentally and emotionally to part with your family home and the things you collected over the last 15-20 years. If you are not yet ready, don’t push it. Take some time and consider the advantages of downsizing for your golden age.
As you age, you will notice that you don’t need a big house. You may only use very few areas every day. You’ll soon forget to check out the attic, basement, kids room, or garage. These and the reasons mentioned above should help you pursue your decision to let go and downsize your home finally. You might even be thankful that you moved into a more intimate, cozier, and smaller home that will suit your lifestyle and needs.