There’s no question that many people have been feeling financially strained, even with the periodic financial assistance passed along by the government through stimulus bills. Given how tough things have been, it’s understandable to be looking for ways to strengthen your position financially. The good news is that downsizing has the potential to do just that for you.
Extract Home Equity
When you hear about downsizing, selling your home and moving into something cheaper (and usually smaller) is likely what comes to mind. This can be a good move to make to strengthen your financial position. Because your new home is less expensive, you’re more likely to have money left over from the sale. You can take that liquidated equity and find ways to invest it so that further down the road you’ll have a better position financially.
Downsizing doesn’t always just mean selling your old home and moving into a smaller one. It can also refer to reducing the belongings you have. If you own things of value, such as furs, electronics, rare books, expensive art, or jewelry, you may be able to sell some, or all, of it to make some money. Keep in mind that some things will be easier to sell than others. It’s not always easy to sell jewelry such as diamonds like it is gold. Your best move is most likely to be to consult with people who specialize in the things you intend to sell so they can be appraised for their value. This will give you an idea of what a fair price would be.
Reducing Your Cost of Living
Reducing your expenses is important if you want to strengthen your financial position. Downsizing your home gives you a chance to have a reduced mortgage if you have one. Since property taxes are based on assessed home values, a less expensive home will be taxed less. You’re also likely to pay less for utilities. Remember, it takes less energy to heat or cool a smaller space than a bigger one, all other things being equal.
Downsizing can be a valid way to strengthen your financial situation. It gives you a chance to extract some equity from your home, make some money, and reduce your overall cost of living. There’s no question that downsizing can be tough, but you’ve already made it this far. You already know you can do hard things.
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