Unexpected Benefits of Downsizing Your Home To Save Money | Educator FI

If you’re a goal oriented person, you typically have a clear reason for starting a major project. We certainly did when we decided to sell our large home for financial reasons. Sometimes, though, after you’re done you’ve accomplished even more than expected. We’ve experienced incredible unexpected benefits from downsizing our house to save money.

Though we considered other factors in the decision, speeding up our path to financial independence was the primary driver. Downsizing would free up equity in our primary home and lower our monthly costs.

Both of those things ended up being true. We captured six figures worth of equity and cut our monthly costs by at least half. It was clearly a financial win.

The real surprise has been an increase in happiness in our new smaller place. We thought we were sacrificing by leaving the large home we loved and moving into a smaller place. This was especially true when we decided to go with an attached townhome. As private people used to our own space, this would be a challenge for us.

Amazingly, since the move, we’ve found ourselves saying “wow, this is actually better!” Of course there are some things we miss about our old place. Those are more than balanced out by the things we love about living in our smaller home.

We anticipated some of these, but not the degree to which they’d impact our quality of life. If you’re considering downsizing, know the benefits may be even greater than you expect!

Unexpected Benefits of Downsizing

Fewer Things — Uncluttered Living

Of course we realized we’d have fewer things. It was one of the draws. We planned to cut our space by at least 50%. (The actual result was moving to a 60% smaller place.)

We reduced possessions in three phases:

1. Staging — We started cleaning, reducing, and packing while preparing our house for sale. We eliminated a lot of things during this phase. It showed us the benefit of living in an uncluttered environment.
2. Packing — Once our house sold and we were preparing to move, everything that was staged or stuffed in a closest got a second round of culling.
3. Unpacking in the new space

In steps 1 and 2, we kept things we thought we needed, wanted, and had room for. When we got to step 3 in the new place, we realized we were very wrong about having room. Especially if we wanted to continue the newfound practice of living in uncluttered environments.

So, we went through another round of “stuff reduction.” It was incredible. Now, we look at purchasing anything new very differently. We are far from minimalists — it’s just not in my partner’s (TFI) nature. But, we’re certainly more intentional about what we acquire.

Bonus: Perhaps the biggest struggle in this process was TFI’s challenge with her closet. In our old house, she had an entire spare bedroom as a walk-in closet. Our new place has “only” a small walk-in closet.

As she unpacked into the new place, she realized, and lamented, exactly how much clothing she still had. I mentioned that some people tried clothes buying bans. She decided to set a year-long challenge for herself and not buy any new clothes until July 1, 2020.

This was perhaps the biggest shock I’ve had since we started our FI journey!

Helping Others

In our lifestyle inflation and acquisition phase we bought lots of stuff. So. Much. Stuff.

Fortunately, we weren’t the disposable purchase kind of consumers. We always bought high-quality and took care of it well.

As a result, when we decided to downsize we had lots of things to donate! Whole rooms of quality furniture, recreation gear, tools, books, clothes. All in great shape and useable.

We started first by giving it to family. My newly graduated nephew outfitted his college place. My sister and brother upgraded some furniture. TFI’s parents replaced several old and broken things. It was helpful to us (fewer things to haul) and useful for them.

Next, we gave away to friends and neighbors. Finally, we donated the rest to charity organizations.

Almost everything was put into use elsewhere. It was great to know others were getting good use out of the items and they’d spend less money on new things. Reduced consumption all around!

( Side note: The one small run we had to make to a landfill was horrifying. The amount of things we saw other people throwing away strengthened our future resolve to buy less.)

Clarity of Needs

TFI and I agree that we don’t regret our time owning the too-large home. It allowed us to experience the American large-house dream, and understand what we liked about it. (The financial ramifications of that — well, we do regret those.)

When we searched for a smaller place, we started to understand what we want in a home. As we’ve moved in and organized our smaller place, this understanding reached true clarity.

We now know exactly what we need to be satisfied, productive, and comfortable in our living space. We’d never have reached this clarity without going through the downsizing process.

I think this may be the biggest unexpected benefit of all — and it leads directly to the next one.

Ability to Create Exactly the Space You Want

Of course, clarity leads to the most effective action. In our new home, we’ve intentionally created spaces that fit our needs perfectly.

We have the separate work areas we need to be productive when working at home. These are combined spaces with other living areas. We better understand how we use space and what can overlap without causing friction or lost productivity. Mine for example, also incorporates my pain cave (an indoor cycling training area) and a guest sleeping area for those rare occasions we have friends with kids staying with us.

Each space works perfectly for us. TFI has figured out what nostalgic items are important to have out and displayed, and which are just clutter and unnecessary knick knacks.

We’re still making small tweaks, but the new home feels incredible — and it’s 40% the size!

While we are renting now, we’ve considered building a small home for our future retirement. We now know exactly what we’d want included in it! If we’d tried that a year ago, we would have missed and built a much larger space than necessary.

Lower Energy Use

While this is a financial benefit, it’s much more than that. Our smaller place is much more environmentally efficient.

We are heating and lighting significantly less space simply because of size. The systems are newer and more efficient. The same is true of the water systems and toilets.

Our increased clarity on space use also means we understand how and when we’ll use a room so we can adjust our lighting and heating accordingly.

I’m looking forward to seeing the utility bills for the financial savings. But, it’s also great to know that we’re reducing our environmental impact.

Chance to Create New Habits / Routines

I’m a big fan of Atomic Habits by James Clear. The intentional creation of habits and systems is a newfound passion of mine.

We realized we’d fallen into several unproductive and even harmful routines during the eight years we lived in our old home.

Downsizing has given us the chance to intentionally create new ones. These include habits of productivity, exercise, and diet.

Our kitchen is organized differently. We’ve avoided creating commute habits that lead to picking up food on the way home or grabbing coffee.

We are trying to design our morning routine so that we can efficiently get our necessary preparation tasks done while also enjoying a more leisurely wake up.

The chance to think intentionally about how your living space fits your needs and actions is a powerful benefit!

Flexibility

This is specific to our choice to rent. In our search for a smaller home, the right one wasn’t out there to purchase. We reluctantly chose to rent because we found a potentially ideal space. (We were right!)

We’ve been enjoying the flexibility renting provides us. It truly gives us the option to decide what our future life will look like without being tied to a specific property.

If our neighbors bother us, we can easily (easy is relative) look for a new place without a financial anchor. Maintenance is predictable which gives us greater flexibility with our savings.

Even if we’d purchased, having much less of our net worth tied up in our home would give us greater flexibility.

When the majority of your wealth is in a single asset that takes time to sell, your choices are much more limited.

Sense of Adventure

Okay, this one is probably even more temporary than the sense of flexibility from renting. But, I have to mention it because it’s real.

It’s easy to fall into a routine. This is especially true when living in what you’ve always thought of as your dream home. We were (happily) envisioning living in the same house and neighborhood for the rest of our lives.

It wasn’t a bad thing — we recognize the privilege and good fortune of being in that situation.

But suddenly, you decide to sell and try a whole new lifestyle? And you do so suddenly?

That changes routine to adventure in a flash. The last four months, and the immediate future, feel like an incredible adventure.

I’m all for it.

Stronger Relationship

Selling a house and moving is always a stressful process. This is even more true when you’re dramatically reducing your space and redesigning many aspects of your life.

Though we entered this adventure on the same page, it could have gone very badly. At the very least, it wouldn’t be surprising if our relationship was temporarily strained. That’s natural during stress and change.

Instead, we’ve grown even more connected and clear on our mutual goals. The intentional discussions about space and stuff increased our understanding of our individual and mutual needs.

The challenging choices were all made together with open discussions.

An already strong relationship has become almost unbelievably aligned.

Downing Our House to Save Money Actually Increased Our Quality of Life

The financial benefits of downsizing are real. Combine the money results with these unexpected benefits and we are thrilled we leapt into this.

This is our total list of benefits from downsizing:

• Freed up equity
• Reduced our monthly housing costs
• Fewer things — uncluttered living
• Helping others (donations)
• Clarity of needs
• Ability to create exactly the space we want
• Lower energy use
• Chance to design new habits / routines
• Flexibility
• Sense of adventure
• Stronger relationship

I never pretend a choice is universally right for everyone. I can say we’ve experienced amazing benefits from downsizing. If you’re considering it, consider these possibilities.

Instead of improving our finances while our living conditions were “good enough” for our remaining work years, moving to a smaller home had a significant positive impact on our quality of life.

Financial savings and better living? That’s an incredible outcome.

Originally published at https://educatorfi.com on July 29, 2019.