When we built our home in 2004, we paid attention to the details we thought were important at the time. We found a floor plan we liked with the right number of bedrooms, and an ample sized kitchen on a lot adjacent to a park. Unfortunately, we didn’t think a lot about how our needs would change over time. A lower level basement that had been the kids’ toy room when we first moved in now sits almost empty. They’ve both moved into stages where their main sources of entertainment are their computers (which reside in their rooms), or socializing with friends.
Our lower level basement, which is 1/4th the total square footage of our home, is used for nothing more than storage and the home of our cats’ food and liter boxes. Every time I feed the cats, I look at the large empty room and wonder how much money we could save by downsizing our home. I did a little estimating, and the amount is staggering.
Just as a rough estimate, I calculated how much our mortgage payment would be if we sold our current home for it’s most recent appraised value, then bought a home worth 25% less than the one we currently live in. After applying the equity we’ve built up as a down payment and taking into consideration current interest rates, we’d save about $300 a month on our mortgage payment alone.
Our property taxes are about $4100 per year currently, or about $340 a month. Again, just as a rough estimate, if our new imaginary home was worth 25% less, it’s logical to think that our taxes would decrease by a proportional amount, saving us another $83.75 each month.
We currently budget $300 per month for natural gas and electricity. There are times during the year when it’s higher or lower, but it’s a fairly accurate average. If we again cut that bill by 25%, we’d save $75 a month.
If we total the three areas of savings listed, we would save an estimated $458.75 by reducing the size of our home by 25%. Since 25% of our home is completely unused, we likely wouldn’t even notice the difference in our day to day lives.
We have a significant portion of our home we don’t use, and hence the exercise, but there are other reasons why you may be in the market for a home downsize:
- Unused Space: Like my situation, it could be just a change in the stage of your life. Kids grow older, and even eventually move out reducing the amount space needed. Or you could have simply bought too big of a home to begin with.
- Big Yard: That acre sized lot and a huge back yard seemed like a good idea at the time, but now it’s just a pain to maintain. By reducing the size of your lot, and the value of your home, you can save some money and also the time it takes to take care of your yard.
- Empty Garage: Having a big garage adds storage space to your home. But maybe you’ve downsized to one car, or find that much of your garage sits empty.
- Mindset Change:That huge island in the kitchen looked awesome when you toured the open house, but now you dread having to wipe the big counter every day.
It’s difficult to make the decision to pack up your belongings and move. It’s even harder to say good bye to the house you’ve called your home for years. But calculating how much you could save in your monthly budget every month will definitely make that decision a little easier.
Do you fall into any of the categories that indicate you could downsize your home without noticing a lifestyle difference? Have you estimated how much you could save by doing so?