How To Save Money By Downsizing

July 28th, 2015 Posted in Investing|Personal Finance

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Downsizing -Not Always Bad

Recession or no recession, it suits any of us to find a way of saving a few dollars here and there. It’s not a bad thing, and none of us should be at all concerned about how it will be viewed. The truth of the matter is that anywhere a saving can be made, there is potential to re-direct funds that may be needed elsewhere or highly beneficial. Looking into your regular expenditure and thinking about what changes you can make, you can come to the conclusion that there is a lot of gain to be made from making a cut – although in some cases it may make for an emotionally challenging decision. However, if you steel yourself for the process and give it your honest appraisal, you may find that it was the best decision you ever made.

One decision that will never be totally comfortable is the sale o f the family home. After all, so many things happened there that made it the center of a life you would not swap for anything. Nonetheless, if the time has come that the kids have moved out – not just to college but to a place of their own, possibly even a marital home – then you are left with a house where at least one room is going empty.

Sure, your kids will visit pretty regularly and may well stay over when they do, and you may well run into a moral quandary when the issue of selling the house they grew up in happens to arise. However, you can take sentiment too far. If selling the house and relocating to a smaller property will make your retirement and the years preceding it any more comfortable, then your kids ought to understand. Moving from a big house to a smaller one can result in a very large lump sum to deposit in the bank.

Downsizing is not solely about making a change from one thing to another, physically smaller thing, of course. Neither is it something that needs to happen when your children have left home and any big home-life change is going to be a lot rawer. Often, the main point of downsizing is to cut on wastage. Most of us have been guilty of spending money that did not need to be spent.

It is worth looking at purchases which hold their value well – for example, a car is not a good choice for downsizing from the “profit” point of view. However much you paid for that when it was new, it is probably worth a fraction now. Even if you have spent hours lovingly maintaining it, it started losing value the moment you drove it off the forecourt. Conversely, items like laptop computers hold their value exceptionally well. If you find that you are using the laptop less frequently, then you can make a few hundred bucks and save on the electricity that a charge-demanding laptop swallows up every day. If you can make do with a desktop computer, it offers more memory and efficiency – and could help you make a saving, too.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on July 5, 2009.

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