First Person: The Financial Side of Downsizing

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A recent MSN Money article looked at some of the questions to ask before downsizing in retirement. But retirement isn't the only time in which downsizing can be a good option. In fact, we recently downsized, and we're a younger family of four.

So just because retirement isn't looming, it doesn't necessarily mean that it's not a good time to consider downsizing. However, there were some things we considered before and as we made our downsizing decisions.

Cost Effects

Downsizing allowed us to cut costs in a number of areas. Some aspects of these cuts, we really hadn't even considered for real savings until after we had already downsized. Something like selling our larger home in order to rid ourselves of a mortgage payment so that we could buy a smaller condo outright was an obvious costs savings. There were also the more prevalent costs savings that came with cutting our property taxes by almost $2,000 a year and saving about $100 a month on utilities.

However, there were also less obvious savings that came with our downsizing efforts. With less space, we had less room for stuff in general. This meant that through garages sales and resale options for things like books, baby toys and supplies, and similar belongings, we were able to make extra hundreds of dollars from unnecessary belongings as well as avoid having to move such items to our new location.

Long-term Needs

Cutting costs through downsizing wouldn't do us any good if we just have to repurchase that stuff later. This was especially true with home furnishings and baby gear. We didn't want to get rid of such things -- selling them for a fraction of their retail value -- only to find that they were necessary in our new home or needed for our second child and have to repurchase them for more than we sold them. Therefore, some of our downsizing continued even after we relocated and after we had our second child once we had a better handle on exactly what our situation would be moving forward over the long-term.

Resale vs. Replacement Cost

I mentioned resale versus replacement cost. This can play a big role in deciding what to downsize and how. For example, with some of our baby stuff, we were able to confidently get rid of it since we could do so in a high-end baby resale shop where the pay we received for our stuff was reasonable. Add to this, we knew that we could cheaply and easily re-accumulate such items if necessary though garage sales, hand-me-downs, and other resale options.

We did the same with some of our furniture. While we knew that we could find good pieces for good prices at area resale shops and garage sales, having the time and trouble of doing so could just add additional effort to the process of downsizing.


Since we moved from a four bedroom, two bathroom single-family home, to a two bedroom, one bathroom condominium, downsizing proved a significant process of our relocation. And until we actually got into our new place, it was difficult to know exactly how we would or could furnish and arrange our new living space. As I mentioned, we didn't want to get rid of a bunch of stuff only to have to re-purchase it all once we got settled in.

Therefore, while it wasn't worthwhile for us to rent a storage locker just for this purpose, we knew that we could use a family member's garage to temporarily house the items we weren't sure would fit in our new location. However, even having to rent a storage locker for a few months would likely have been cheaper than having to go out and re-buy certain furnishings.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


Ning, David. MSN Money. "Retirement downsizing: 5 questions". February 26, 2013. March 4, 2013.


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