When it comes to houses, most people strive for an upward trajectory. That is, they work towards buying bigger, better homes as they climb the career ladder, raise their families and meet other milestones.
However, bigger and better is not always the best plan for everyone. This is especially true if mortgage debt is keeping you from being financially secure. If you are facing this challenge right now, you might want to consider downsizing.
Downsizing is exactly what it sounds like—moving to a smaller, less expensive home. While it may not sound glamorous, there are many reasons why downsizing can be the best move for your family and finances.
What are the financial benefits of downsizing?
The biggest benefit of downsizing is lower living costs. Generally, when you have a smaller, less expensive home, you spend less on:
- Mortgage
- Utility bills
- Property taxes
- Maintenance and repairs
That extra money can go to other important things, such as an educational fund for your children or smart investments for your future.
Furthermore, downsizing can help you avoid losing equity if foreclosure becomes a possibility.
What about the other benefits?
The financial advantages are what drive most people to downsize. However, it is also important to consider the other benefits, such as:
- Reduced maintenance: A smaller home is often easier (and cheaper) to maintain and clean.
- Simplified lifestyle: Downsizing can help you declutter and focus on things you really need. Moreover, a smaller home can prevent you from overbuying, which is another financial advantage.
- Better location options: You may have the opportunity to move to a more desirable area or somewhere closer to work, family or amenities.
- Less stress: Having fewer housing-related expenses can reduce financial pressure. Plus, you can use the extra disposable income to enjoy life outside of bills and responsibilities.
Of course, these benefits vary depending on individual circumstances and priorities. That said, it is crucial to weigh the pros and cons before making a decision.
How can downsizing benefit bankruptcy filers?
Downsizing can be a good preventative measure for bankruptcy. But if you are already going through the bankruptcy process, downsizing can offer these benefits and more.
For example, selling a larger home can help pay off debts. Plus, when you downsize, you have more funds available to get back on your feet.
Bankruptcy can offer a fresh start. If you think it is the right option for you, consider talking to a bankruptcy attorney who can guide you through the process.
