Essential Downsizing Tips That Will Free Up More Money To InvestBuilding Wealth
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“Reduce the complexity of life by eliminating the needless wants of life, and the labors of life reduce themselves ” Edwin Way Teale
We couldn’t have said it better ourselves. We bring you the much-needed essential downsizing tips, so you can free up more money to invest.
Advantages of Downsizing
- Save and make money
- Enjoy more free time
- Smaller homes are usually happier homes
- Save on energy costs
- Enjoy more traveling
- Enjoy less but higher quality items
- Keep your life organized
- Get out of debt
Here are 11 downsizing tips to get you started.
1. Know Your Why
In everything you do in life, including your new downsizing project, you need to keep your “why” in the front of your mind. Everyone is going to have a different “why” when they begin to implement these downsizing tips.
- More money to invest
- Too tired of spending all your weekends’ cleaning
- Kids moved out of the house and you have spare rooms
- You are moving to a smaller house
- Fund your retirement and begin planning your estate
- Save money for children’s education
- Lower cost of living
- Reduce environmental impact.
The list can include a myriad of reasons. Finding your “why” will motivate you to implement the process. One of the most popular reasons why downsizing your home makes sense, is to use your money for investment purposes. We found the perfect way to get you started with investing.
Pro Tip: Acorns already has over 4 million people on board investing and saving for their future. It has a lot of great features, such as allowing you to invest your spare change. They have a chrome extension called “Found Money” which locates incredible offers to allow you to save on purchases.
Bonus: Another feature is their micro-investing account, and they offer plans for retirement funding too. This is an amazing platform to get you going. Click Acorns to create an account and explore all the features.
Make sure you read How to Start Investing: The Rookies’ Guide For Investing In 2019 to get more information on how to start.
2. Decide What Type of Downsizing You Will Do
There are many ways to downsize your home, your lifestyle, and other areas of your life.
- Sell your house and buy a smaller place
- Sell your house and buy two smaller places, using one property as a rental to bring in more money
- Keep your house but use only a portion of it while you learn how to make money with the empty space
- Re-invent your filing habits and go digital, freeing up space in the house
- Get rid of excess things and close off portions of the house
- Rent out your house and move in with someone looking for a roommate.
Depending on your situation, age, and motivators you are likely to choose one of the above methods to downsizing your home.
Good to Know: If you decide you want to sell your existing home, and buy a smaller one check out Roofstock. An excellent choice to check out your options, especially if you are interested in Real Estate Investing.
Start learning more about real estate investment through our “Real Estate Investing for Beginners: 27 Tricks You Can Leverage”.
Bonus: If you choose to keep your house, but use a portion to generate money, Airbnb is the world’s leading online marketplace for hospitality.
Read “13 Creative Airbnb Hosting Tips That Will Earn You Money” to maximize your experience with Airbnb. Homeowners, as well as travelers, have a rating, which allows you to feel more comfortable using their service.
3. Remove a Few Items a Week
Possibly the easiest part, of the downsizing tips we are outlining in this article, is to simply remove an item or two a day from your home. This is a great suggestion if the idea of getting rid of things makes you feel anxious. For the sensitive types, this might be an excellent way to start your downsizing adventure.
There are many things you can live without if you put it to the test.
- Excessive kitchenware
- Old clothes you never wear
- Weird souvenirs that you never liked and don’t know why you display them
- Children toys
- Broken electronics you will never fix
- Old shoes
- Furniture that simply collects clutter.
Obviously, depending on the house, the list can be much bigger. Start with the things you care less about. If you have a hard time getting rid of them right away, place them in boxes, while making a promise to yourself that if in a week you don’t look for them, they will be donated, sold or thrown out.
Pro Tip: If you are ready to cash in on the items you no longer need to visit Decluttr. You can sell clothes, toys, DVDs and other household items through their platform.
4. Stop Buying New Things
This is not so much a tip, but a rule for those who are looking to downsize. If you are downsizing you need to stop buying things, unless they are necessary. There are many purchases we do daily/weekly that are simple a waste of our time and money.
- Specialized cleaning products
- More toys for the kids
- More clothes
- Decorative items (do you really need all those throw pillows?)
- Kitchen tools you use once every 5 years
- Food (we pile up way more than we need).
Depending on your personality this list can be endless, and it can also be the reason why you never had any money left over to invest.
Learn more about these 19 grocery shopping mistakes that are bad for your wallet.
Good to Know: A smart way to overcome bad buying habits is to create a spending list every month, allocate part of your income to the necessities and only a small portion (if nothing at all) to excessive luxuries.
Pro Tip: Before you even spend anything every month, take $100 (or more, depending on your income) and invest it.
An excellent company that pays its members for losing weight is HealthyWage. Some members have made up to $10,000 using HealthyWage.
5. Become a Smart Shopper
Part of downsizing is learning to be frugal and valuing money. We can achieve that by using a number of methods.
- Living in a smaller house will make it harder to accumulate things
- Developing a love for investing and saving will make you think twice before you spend
- Learning to use incredible new apps that save you money, give cash back, and rewards
- Developing hobbies that can help you generate extra income
- Look for discounts and sales for your big-ticket purchases
- Buy second-hand items.
Applying one or more of the above methods will push you to make the mind-shift change needed to adopt a downsizing lifestyle.
Pro Tips: Take a look at various apps that can help you save and make money.
- Long Game: A great app that makes smart financial decisions fun and rewarding by using games and rewards.
- Cushion: A bill negotiator app that will show you how to get back your bank and credit card fees.
- Ibotta: An app that pays you real cash money whenever and wherever you shop.
- Shopkick (use promo code MDR for a $5 bonus): An app that pays you for simply walking into stores.
Bonus: Learn from 21 zero waste tips that can save you big bucks and from these 13 price comparison tools you need to use before going shopping.
6. Storing Things is Ok
We get it! Sometimes it will be hard to throw away things. This is especially true if the items are family heirlooms, special gifts or memorabilia. It is okay to consider the possibility of storing them in a unit. To help you decide what items are good candidates for storage, think of your average hotel experience. How many things do you usually take with you to survive a two-week vacation?
The rest are potential candidates for storage.
- Family heirlooms
- Gifts from people you love
- Your children’s first drawings / clothes / toys
Anything that has provoked an emotional reaction is us might be hard to just get rid of. If you can give some of the above items to loved ones, it might be a good solution. The rest you can store away and make them part of your legacy.
Pro Tip: If you have 20 little shirts from when your daughter was 6-months old, no need to keep all of them. Keeping 2 or 3 shirts will still conserve the emotion and memories.
Learn how to make money on all the baby clothes you no longer will use and help new families make memories.
7. Your Life is More Than Your House
This is one of my favorite downsizing tips. It is the foundation in order to make long-lasting changes. Taking a look at our lives, we can see how we define our self-worth by the things we own.
An important part of the downsizing process is to be honest with ourselves. Realizing that we more than just homeowners is a good first step. Many things should matter more than just bricks and walls.
- Family and Friends
- The daily impact we have on other’s lives
- Our dreams and goals
All of the above points are just as important as home ownership to our happiness.
Pro Tips: Take a look at the following articles to begin putting together an action plan.
- Start planning your traveling. Make sure you are set right with these best 15 hotel rewards programs that will help you earn free nights wherever you travel.
- Start dreaming of your future and all the things you can achieve by learning more on how to become a millionaire by 30.
- Start thinking of making your own business with these 71 Side Business Ideas That Will Help You Earn A Significant Amount
8. Begin Investing and Not Spending
Part of making money is investing and getting your money to work for you. Robert G. Allen once asked “How many millionaires you know who became wealthy by investing in savings accounts?” We couldn’t have said it better ourselves. The goal of these downsizing tips is to ultimately offer you the ability to have more money, and more freedom.
Good to Know: Once you get that money saved up, you need to act fast. The sooner you begin investing, the sooner you will be in a position to retire or to travel more. You can give back to loved ones or even help charities. No matter what the reasons are behind your need to make more money, we are here to guide you.
Warning: Investments do require some trial and error, so be prepared to make small investments until you are comfortable that you got the hang of the trade.
Pro Tips: There is a variety of great new tools and apps online that are super user-friendly for beginners.
- Acorns: Trusted by over 4 million people they make investing and saving super friendly. Their app comes with many features and they do publish relevant investment news.
- Personal Capital: They have a great promotion going on currently, where if you join now you get $20
- Yieldstreet: With these guys, you can explore and invest in alternative investments. They advertise a return of 8 – 20%.
- Binance: If you are ready to explore the world of cryptocurrencies, take a look at Binance. You can access and trade more than 100 cryptocurrencies.
9. Attach Goals to Your Investing
Attaching a goal to your investing, is like knowing your “why” when it comes to downsizing your home. Our goals are what drive us to push forward in life. It is great to take a moment and answers honestly some important questions.
- What do you want to achieve in life?
- What do you want to be remembered as?
- If you were sitting in an audience watching your life as a movie, would you be interested in it or walk away?
- What is the impact you want to make?
- Who are some key people you wish you could help?
We hope the above questions guide you to find your investing goals. While you are looking into investing, it will help you to learn about these 49 sites that pay you to do things you are doing already.
Pro Tip: The more money you can put in your investments, the faster it will grow. Remember it is much easier to get there, if you know ahead of time where you are going.
There are many goals you can attach to your investing achievements.
- Help people
- Give to charity
- Secure your children’s financial future
- Invest in others
- Create a company
- Build a school / orphanage / kid’s center etc.
You know best what your reasons are.
Bonus: If you are a stay home parent take a look at these 21 non-sales work from home jobs that will bring you a steady income. Staying at home will allow you to accelerate you investment education by having more time to read, study, and learn.
10. Begin Looking for a Smaller Place
Even if you are not 100% sure that you will downsize your home, it will be much easier to come to the decision once you start house-shopping. Although giving up your current house might be emotional and stressful, think about the fresh start! Focus on the positive changes.
- New clean house
- New uncluttered environment
- An opportunity to redefine your interior design choices
- A great opportunity to be part of a new community and expand your network
- “Clean Slate” feeling.
- If you are currently in a rental property and you want to buy your own house learn how to save for a down payment on a house in 7 easy steps.
- If you already own a house and you are looking to sell it to downsize, then take a look at these 9 tools to help you get a free home appraisal.
House shopping, when you are not in a rush, can be a positive, fun and creative experience.
11. Be an Advocate of Downsizing
It is always much easier to make any change in our lives when our friends and family join the mission! Make sure you mention to your friends that you are considering downsizing your home, and share all the advantage of downsizing you read here today. You might be surprised to find out that they are also looking into similar solutions. If that is the case, you can help each other with all the physical and emotional changes that will be happening. Get them excited with all the possibilities that are available.
Wrapping It Up
We hope we gave you a lot of food for thought. Remember to start small and see how you feel.
Comment below and let us know if you have any more tips you find important during the process. We love hearing from you!
Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.