Want To Lower Your Debt? Try Downsizing

Has your home begun shrinking? It may feel like it if you’ve come to a point where every corner is a repository for clutter. Instead of immediately jumping into looking for a bigger home and the bigger debt that comes with it, stop for a moment and think. While going for more square footage is a justifiable solution when expanding your household – welcoming a new baby or an elderly parent into your home – or making room for a home office to accommodate your recent remote worker status, there’s one case when it’s not worth it. And that’s when you own too much. 

Without realizing it, the space that you normally use to live and create fond memories can become just a room filled with boxes, and objects take the place of experiences. At some point, you might realize that you’ve been collecting things just because you have the space for them. But do you really have the space for it? Can you afford to throw away experiences just because you can’t throw away things? What is to be done?

You may have heard of downsizing in the context of businesses, but downsizing is something everyone can do. Moreover, there is data that shows exactly how much it can do for you. And that’s just moneywise. The experiences and memories you will have from living a life free of excessive consumerism will be worth a million times more.

StorageCafe recently did a study where they looked at how much you would save in different parts of the country if you downsized from a 4-bedroom to a 2-bedroom home. While in places like Rochester, NY, or Tucson, AZ, you save around $98,000 and $99,000, respectively, other places will net you huge savings that can literally turn your life around and give you the financial and material freedom you need to live life to the fullest.

For example, the San Jose-Sunnyvale-Santa Clara area in California is where you can get some of the hugest savings – in some cases up to $1.6 million when moving from a 4-bedroom house in Sunnyvale to a 2-bedroom house in San Jose. 

On the East Coast, the Bridgeport-Stamford-Norwalk area is pretty good too – here, you might be able to save over $463,000. It’s not on the level of California, but almost half a million dollars can pay a lot of debt!

However, New York takes the cake. The amounts you can save here are staggering. Moving from 4 to 2 bedrooms, even within New York, for example, from Midtown to Riverdale, can leave you with a boatload of cash – about $7.42 million in some cases!

Of course, most of us don’t have a Manhattan 4-bedroom apartment, but the point remains that downsizing is a viable solution to paying off debt. It also goes hand in hand with getting rid of everything that’s weighing you down because one of the first questions you’ll ask yourself is, “where do I put all my extra stuff if I downsize?” 

Well, the idea is not to put it somewhere else but to eliminate it from your life entirely, either by selling it, which may add to your funds and help you pay your debt, or donating it, which will certainly make someone’s life happier.

Still, there will be things you can’t part with. As much as you clear out, there will always be those few items you just can’t let go of. Maybe it’s your first pair of roller skates, maybe some family heirlooms or maybe you’ve got an eye for things that appreciate in value over time. Comic books, stamps, sealed LEGO sets, pinball machines – you’d be surprised at the things that grow more valuable with time, and by how much. They also require protection from humidity, sunlight, heat, cold and pests. 

Yet they still clutter up places where you should be making new memories instead of letting the old ones gather dust. 

Keeping them somewhere safe and accessible is the issue then, but where? If you’re thinking of a garage as an answer, you’re getting close to what is actually the ideal solution, which is self storage. It’s been growing tremendously in recent years, so it’s become very easy to find a storage unit near your home. You’ll find many sizes and amenities for storage as well – large ones for cars or boats, climate-controlled units for more vulnerable items, drive-up units with 24-hour access, storage lockers in facilities with security surveillance, and everything in between.

You’ll probably need a storage unit anyway if you’re downsizing and are in between houses. That way you can unpack at leisure and decide which things can stay in storage. Self storage is also a lot cheaper than having the equivalent space as part of your home. 

Breaking away from unhealthy consumerism isn’t easy. It takes time and discipline, so you should use every advantage you can get. Downsizing isn’t something you can do overnight, but if you do decide to go this route, do it right and do it for the right reasons. Get rid of that “extra” in your life, pay off your debt and live big, no matter the size of your home.

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