The kids have grown up and moved out, the market is changing, you just don\’t feel like taking care of a big house anymore – whatever the reason, at some point in your life you\’re going to find yourself wondering if it\’s time to leave your old digs for something smaller.
Every year, thousands of Canadian homeowners pack up their large, lofty homes to move into smaller apartments and condos that are more economical on space and finances. Though you will inevitably have a sentimental connection to the house you\’ve lived and loved in, you may need the equity that is locked into your home to help pay for the inevitable expenses of retirement.
There are a few major stumbling blocks for people who are thinking about downsizing, and they usually centre around finances (will you receive an ample return on your investment?), and sentimental value.
Obviously, a smaller home means less stuff – the concept is daunting in and of itself! Because, if you\’re like almost every other person, you\’ve spent time amassing the collection of both useful and not-so-useful things that take up every corner of your home.
But do you own a home to store stuff? It\’s laughable when you say it out loud, but you\’d be surprised at how much money you\’re spending to store that stuff.
Here\’s an interesting little exercise used by MoneyCrashers.com to calculate how much money her clients are devoting to the stuff in their home:
- Write down the total square feet of your house.
- Write down how much you pay monthly for your house or apartment.
- Divide your total square feet by your monthly payment; this is how much you pay monthly per square foot.
- Now estimate how many square feet you’re using to store stuff: include your closets, your basement, extra bedrooms, and your garage.
- Multiply that times your “monthly square foot” cost.
With the economy in flux and your retirement looming, can you actually afford to waste that extra money on things you don\’t need or possibly even see on a daily basis?
Of course, the next step in this is the process of clearing out all that clutter. What should stay and what should go? Your emotional attachments will invariably extend beyond the four walls of your home to your earned and curated collection of stuff.
Start by removing those things that don\’t have sentimental value. Do you need 15 blankets? Are you sure the double set of utensils is still going to come in handy? If you\’re moving to an apartment or a condo, are you going to need the snow shovel? The lawn mower? The chair with the broken rung? Be pragmatic in your decision making. If you can\’t use it, you don\’t need it. (And if you do need it eventually, chances are you\’ll be able to borrow it from someone you know.)
If you can avoid it, don\’t throw anything in the garbage. First of all, one man\’s trash is another man\’s treasure, and will be someone out there who can find use for your no-longer-useful things. Recycle, reuse, sell and donate instead.
A smaller home may also mean you will need new furniture. Make sure to measure your existing furniture – specifically couches, dressers and beds – to see if they can 1) get into the apartment and to the room they will now live and 2) fit the space itself. It may be possible to get your hands on a floor plan, in which case you can measure out where you might want to place old or new furniture before hand. It will be good to know what to love and what to love before move in day.
It\’s a good rule of thumb to start working on the clutter at least three months before your set move date. Take a little time each day to go through a closet or a room. This way, you\’ll be able to look at everything with a critical eye, and you won\’t find yourself stressed out or pressed for time. Moving is an emotional process, and, even though they are just things, you want to give yourself the proper time period to say goodbye to those things that have served you well.
If you are considering downsizing in the near future, the Globe & Mail has created this comprehensive “Downsize your Home” worksheet to help with the decision making process. It was designed with the idea to help organize your thoughts on what your home may be worth today, and what it might look like if the prices happen to rise or fall in the future.
At the end of the day, a decision to downsize is tough but beneficial for so many reasons, both financial and emotional. While you\’ll always have those memories of your life in your former home, you\’ll be able to make tons of new memories in your new, highly organized and curated home, and save money, which can, of course, be used to make even more memories – win, win!