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There are almost too many benefits to count in terms of downsizing your home when you’re still young. Retirees, or those about to enter retirement, will often downsize their homes. That can be a very smart move, but think about all of the extra money that you could save if you sell your outsize home and invest the proceeds for a half-century until your retirement. Now, that sounds really smart!
Sell Now, Invest Sooner
The sooner you sell your home, the more money that you’ll be able to save. That’s certainly true. Selling your home might well also reduce your month-to-month payments since property taxes, heating and cooling expenses, and upkeep of a large home can drain your savings and monthly allowances for more important necessities.
You really need to ask yourself whether you need such a large home or, by selling it, whether you would be better off investing the proceeds of a home sale in something like an index mutual fund. Alternatively, you could sock away the savings for enriching experiences or pay down your debt (e.g., college loan debt) and finance a mortgage in a smaller home. That said, cash for homes is always an option.
Gauge Your Prospects
Really think through what the future is bound to look like with you, your family, and your future development. Do you need to be near schools and parks for a growing family? Would you like a smaller home but one with an office? These are questions that are intelligently informed by a good amount of planning. You don’t need a crystal ball or to be 100 percent accurate in your predictions – you simply need to do your best to anticipate your future living situation and what you want out of life.
Taking a look around your current home can also help inform the size that your new home needs to be. It can often seem like you need, say, 4,000 square feet of space when the truth is far different. Many homes are cluttered to the gills and don’t make full use of all the available space. If this situation applies to your current home, then you might want to take a realistic evaluation and determine how much space you actually need. For most people, 1,500 square feet is plenty.
If that’s the case, you could really benefit, financially and perhaps psychologically, from downsizing your home and living somewhere that more economically meets all of your needs.
Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2
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