Downsizing Part 2: Downsizing your home - would it make sense?

Recently we were on Channel NewsAsia's Real Deal segment to talk about making a smooth transition from a larger home to a smaller one (see video here). Downsizing one's homes comes in a package deal that includes downsizing one's possessions, and that is always one tough cookie. How does one go through (often decades) of possessions without incurring a visit to the shrink, or worse, experiencing emotional trauma?

In this series of posts, we will address questions related to this topic.  While it may not inspire an immediate move to minimalism, hopefully it will encourage us to think about what it is that we truly need to live on.

First let's talk about why people, in their right minds, would want to downsize and live in a smaller home. Through our (trusty) field research, we've narrowed the reasons down to 4 categories:

1. Changes in financial situation

Our financial abilities and balance sheets change throughout our lives. It may occur that we need to free up some cash to finance other types of debt, prepare for a large cash outflow, or simply to lower our mortgage liability. And a large portion of our cash is often locked up in real estate.  Downsizing to a smaller home is one way to free up much-needed cash.

2. Changes in family situation

As we age, our household's living needs change. Parents of adult children may find themselves living in an empty nest, or adult children may need to move in with an elderly family member in need of personalized care.  Or else, families may want to move to a smaller home following the death of a loved one.  Changes in marital situation may require selling off a home to divide up the assets, for example. 

As our living situation changes, what we are looking for in a home also changes. 

3. Location

Some families may desire to live in a particular locale for various reasons - proximity to other family members, shorter commute to work, proximity to certain schools or facilities.  If it is a popular areas, sometimes it may mean settling for a smaller sized home - the proliferation of shoebox apartments in the city center is a good example of this. 

There is research proving that giving up spacious suburban living in exchange for a short commute improves overall well-being, so this trade off may be well worth it.

4. Joining the minimalist movement

If you Google "Tiny House Movement", you'll find tons of people in North America, Australia and New Zealand who have made a conscious decision to forgo 2,500 square feet (or larger) mansions in exchange for 200 square feet of liveable space in a tiny converted container, shed, caravan or boat. Many cite their desire to live free of hefty mortgages as reasons for their conversion and of course, the freedom from hefty mortgages.  Very often, their tiny homes (built with their own hands) cost less than 10% of a full-sized home, and are paid for with cash.  For countries where tax rates are high, land is ample, this is an option well worth considering.

At the end of the day, no matter what size home you're in the market more, we think the Tiny Homes videos are definitely worth watching.  It may just inspire you to mount your own minimalist attempt at home (without moving house, of course)!

If you're keen on being free of the tyranny of things, but not sure where or how to start, check out our recent blog posts on how to clear age-old clutter quickly and effectively (here, here, and here).