One of the things I noticed as I went through two cross-country moves in the space of a year was that downsizing ended up being a big help to my finances. When you have less stuff, there’s less to worry about, and less to take care of. Plus, you don’t need a bigger place to keep all your things.
Here are some of the ways downsizing can help your finances in big and small ways:
Downsize Your Home
Moving into a smaller place can reduce your overall expenses. Not only is your base cost lower, but you probably also pay less in utility costs. If you sell a bigger house and buy a smaller house, you end up saving on property taxes too. And, depending on your market, you could actually come out ahead if you sell a bigger house and then rent a smaller place.
With renting, you don’t have to worry about property taxes, maintenance, repairs, and some of the other expenses that come with buying a home. Figure out what lifestyle works for you, and decide what might make the most sense.
Get Rid of a Car
How many cars do you have? How many do you actually need? If you can get away with selling a car, you might end up in better financial shape. You can take public transit, which might be cheaper than paying for gas. Plus, you don’t have to worry about paying for insurance, maintenance, and repairs.
Even if you think you need multiple cars, you might be able to “downsize” by selling or trading in an expensive car for a less expensive car. The savings could be bigger than you think. I will probably add a car to my name in the next year or so, as my son learns to drive. However, I’m hoping to buy a cheap clunker with cash. No expensive car for him.
Sell Some of Your Stuff
I’ve always resisted getting a storage unit for my things. I just don’t want to deal with paying a fee each month to store things I don’t look at. I also discovered that I could get a little extra cash by selling the stuff I didn’t want to drag across the country with me. Now, because I don’t want to build up the clutter again, I am more careful about what I buy. I think through each purchase before I make it. I don’t want to fill my home with things, and thinking about how clean and open my space currently feels helps me from adding too much to my establishment.
Downsize in Other Ways
Look for other ways to downsize your life. This can include getting rid of cable/satellite TV, subscriptions, and other monthly costs that you don’t use very often. You can also benefit from meal planning. You can save money on food if you don’t eat out as much. You can even downsize your vacations by taking smaller vacations and staycations to save money. I’ve found that a few inexpensive camping trips during the summer provide more memories and cost less than going on a huge trip each year.
Those are just how I save by downsizing. What are some ways you plan to downsize your life to save money?