4 signs it's time to move to a smaller house

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4 signs it's time to move to a smaller house

In the summer of 2015, my husband and I decided to downsize our home by selling our house in the suburbs of Boston and moving to a smaller fixer-upper in the city. The decision wasn’t easy but we knew the time was right.

How did we know the time was right? We set about evaluating our current needs and defined four key must-haves that lead us to our final decision. If you’re considering downsizing your home, here’s what to consider:

You are ready for a lifestyle change

Whereas living in a quiet suburb with excellent public schools may be the right choice for you while raising children or nesting with your new honey, you may crave a different lifestyle once the kids have flown the coop or your needs have shifted. This was certainly the case with my husband and me.

Pay attention if you daydream about living somewhere else. My husband and I often discussed our next house, which we envisioned in a vibrant urban neighborhood where we could walk to area shops and restaurants.

To make this dream a reality, we then spent months scouring real estate websites and apps like Redfin and Trulia to research Boston neighborhoods that we could afford. We also worked with a local realtor.

Downsizing opened the door to a new, convenient lifestyle change. In our new home, we can walk to almost everything, including the gym, Starbucks and train stop. An easy and fast commute to downtown Boston was also on our must-have list. We can now be in the city center in 20 minutes -- by car or train.

You need to save more money

If your house has appreciated in value and selling it will free up money you’d like to use for new long-term investments or even your short-term goals, downsizing might be a no brainer. Since home prices fluctuate and housing markets vary throughout the country, it’s a good idea to meet with a realtor to help you determine what your house is worth and how much you can expect to make from a sale. Selling your house isn’t the only way to pocket more cash when downsizing.

Our former five-bedroom house on 2.5 acres of land was expensive in every way. In addition to hefty mortgage payments, high homeowners insurance, and utility costs, our property taxes cost more than $15,000 a year. Not only that, but lawn maintenance and snow removal ran us at least $4,000 a year.

Speaking of savings, now we pay $7,000 less in annual taxes, and this will save us $35,000 over the next five years. We also ditched the lawn and snow removal services as our property is tiny and we can take care of our own yard. This will save us $20,000 over a five year time span. In addition, our gas and electric bills are now slashed in half at our smaller house, saving us about $3,000 a year. One more thing: Since we take public transportation and drive less frequently, we are pocketing an extra $3,500 a year in money that we formerly spent on gas. Effectively, downsizing will give us an extra $87,500 over the next five years. Cha-ching.

Your kids just flew the coop

Oftentimes people begin thinking about downsizing once the kids go off to college or move out of the house. This makes sense as you may be left with empty rooms and a big house that you no longer need. With this in mind, it’s better that you downsize as soon as possible, instead of waiting until the kids have been away for a decade or more. Why? The longer you wait to move into new digs, the less money you may end up with in your golden years. That’s right. About one-third of adults 50 and older spend more than 30 percent of their income on housing -- meaning they have less money for savings as the years go on, according to the Joint Center for Housing Studies of Harvard University. As you age and become less mobile, you’re also less likely to relocate, especially once you hit 50, according to the study.

For these reasons, it may be better to consider downsizing and move when you’re in your 40s. Although this isn’t always possible with kids in school, it made sense for me as my oldest son is in college and my other son is finishing high school through a dual-enrollment community college program. By downsizing, we have more financial freedom and this means we can sock away more money into in our retirement accounts. Another perk: We can afford to take more vacations to warmer climates during the harsh Boston winters.

You’re craving a simpler life

Over the years most of us collect a lot of stuff. Downsizing gives you the opportunity to pare down and minimize. While this isn’t always an easy process, since it may require purging, sifting through basement boxes and even holding one or more yard sales, it gives you the opportunity to move into your new digs with less clutter and save on moving costs.

Speaking of simplifying, your new smaller home will be easier to maintain and keep clean -- further simplifying your life. Another added benefit: Less clutter around you means less clutter in your mind. Think Zen. Clearing out your space and keeping your surroundings clutter-free means you can stop worrying so much about all your stuff. Trust me, the minimalist approach is the new maximum, at least when it frees up cash.

Downsizing may seem daunting at first, but moving out and moving on can mean vastly improving your finances and quality of life -- a decision that’ll make you feel right at home for years to come.