Ultimate Guide to Downsizing

Moving into a smaller space can free up room in your budget and lighten your task load.

6 Many Americans, particularly baby boomers and the Silent Generation, are downsizing to move closer to family or escape large homes. While downsizing can seem limiting, the benefits often outweigh the drawbacks.

Savvy homeowners can enjoy reduced expenses, lower maintenance, and a more manageable living space, enhancing their quality of life.

Downsizing reduces energy costs, as smaller spaces require less heating and cooling. Homeowners can maintain their comfort while saving on utility bills, benefiting from lower monthly power expenses.

Increased Utility Bills Downsizing to a smaller home reduces utility bills, as nearly half of energy usage goes toward heating and cooling. In colder regions, less space means significantly lower energy costs, allowing you to maintain comfort with the same water and lighting while enjoying savings on monthly power bills.

Increased Cash Flow Lower utility bills translate to more cash to spend on other things. You can redirect that money into a rainy day fund, pay down your mortgage, travel the world, or bankroll a new business venture. Downsizing can make it easier to prioritize the things that are most important to you and take concrete steps toward achieving your goals.

Fewer Maintenance Costs Downsizing reduces home maintenance costs significantly, as smaller spaces require less cleaning and fewer repairs. Moving to an apartment or condo eliminates many maintenance expenses, while buying a smaller house means lower property taxes and reduced costs for services like landscaping.

Reduced Clutter Moving into a smaller home forces you to scale back on clutter, making it easier to stay organized. Use the transition to declutter and explore a minimalist lifestyle, keeping only the things that you truly need and love.

Less Cleaning Less stuff and a smaller space means less cleaning. Almost every household chore will be easier and less time-consuming in your new home. You will have fewer square feet to vacuum and mop, smaller surfaces to dust, and less to tidy. Downsizing will save you time and effort if you handle your own cleaning, or save money if you hire a cleaning service.

Less Financial Stress Although you will have less physical space in your new home, downsizing will give you more breathing room financially. The lower physical and financial toll can help reduce your stress levels—which can have several health benefits. You may see positive changes in your mood, weight, sleep, focus, and relationships. You might also experience fewer headaches and stomachaches, less muscle tension, and a stronger immune system.

Planning for a downsize can take extra time and energy. However, the effort will pay off on moving day and in the following weeks as you settle into your new home. Use these tips to help you plan downsizing to a smaller home.

Begin by reviewing how downsizing affects your budget. Create a written budget detailing current monthly and annual expenses. Then, develop a second budget to project costs after moving, factoring in rent or mortgage payments, insurance, property taxes, and HOA fees to understand your new financial landscape.

Alongside your monthly budget, create a comprehensive moving budget for one-time costs like packing supplies, equipment rentals, and moving services. Consider these questions: Will you hire a full-service moving company or go the DIY route?

Will you pack and unpack yourself or hire professionals?

Will you invest in moving insurance?

Factor in hidden moving costs like repairs, new furniture, paint, and initial groceries. For crosscountry moves, budget for airfare or hotel stays to avoid overspending during the transition.

After organizing your budget, create a to-do list. Compile a moving binder to track quotes, receipts, and contracts, ensuring you stay organized and on schedule during a potentially chaotic moving period.

Research thoroughly by seeking recommendations, checking reviews, and requesting quotes from multiple movers. Have a backup plan for delays, and prepare for post-move tasks like unpacking and updating your driver’s license.

Toward the top of your to-do list should be decluttering your current home.

Depending on the size of your home and how long you’ve lived there, this task can be daunting—but it can also be liberating. Here’s what to do.

Clean one room at a time.

Sell Or Donate Unwanted Items

Decluttering is easier when tackled one room at a time. Start with less-used spaces like the basement or garage, deciding what to keep and what to discard. Pack and clean thoroughly before moving to the next area. If purchasing moving insurance, create an inventory to simplify potential claims for lost or damaged items.

You have three options for disposing of unwanted items: throw away, donate, or sell.

Donate gently used items to organizations like Goodwill or local shelters, which may offer pickup services. Alternatively, sell items through yard sales or online platforms like Facebook Marketplace, Craigslist, eBay, or local thrift stores.

Set Up Decluttering Rules

Consider Your New Space

To declutter effectively, establish ground rules by sorting items into four piles: keep, donate, throw out, and undecided.

Revisit the undecided pile after sorting.

Consider the 20/20 rule—discard items that cost under $20 and take less than 20 minutes to replace—or purge anything used less than 80% of the time.

As you sort and purge, keep the layout and dimensions of your new home in mind.

How big are the closets? How much storage space does the home have? How do the room sizes compare to those in your current home? Measure your current furniture to make sure it will fit. If it’s too big, sell it and use the money to purchase smaller items.

Thoughtful design and clever organization can make your new home feel more comfortable.

The goal is to create a home that feels cozy but not cramped, and spacious but not sterile.

With that in mind, here are a few tips for maximizing your smaller space.

Use Space-Saving Furniture When shopping for new furniture, prioritize space-saving and dual-purpose pieces that fit your new home's dimensions. Avoid oversized items, busy patterns, and overcrowding. Opt for light colors and clean lines, and consider fold-away furniture or options with hidden storage, like beds with drawers or ottomans that serve as coffee tables.

Consider Renting a Storage Unit If you have infrequently used items, consider renting a storage unit, with options for short- or long-term use, including climate-controlled spaces for delicate keepsakes. Savings from downsizing can offset costs. Use the unit for “maybe” items, committing to clear it out within six to twelve months.

Incorporate a Multipurpose Room In a smaller home, rooms may need to serve multiple purposes due to limited space. Children might share bedrooms, or a child's room could double as a playroom. If you work from home, your workspace may be integrated into the dining room or bedroom for functional living.

Inventory your old home’s rooms and purposes, then identify ways to combine spaces in your new home for multifunctional living.

Being intentional with your interior design can make your home look and feel bigger. Although furniture choice is important, it’s not the only thing to consider.

High-contrast colors: For small spaces, focus on high-contrast colors. Bright white can make a small room seem more spacious, while dark or bold colors can provide an illusion of depth—especially in a room with no windows. What you don’t want are the in-between colors. Medium shades will make your space feel smaller.

Natural lighting: Let in as much natural light as possible with breezy, sheer curtains or blinds. Draw the eye upward with visually interesting light fixtures and emphasize vertical or horizontal lines with shiplap or paneling. In a room with small windows, use a mirror to reflect whatever light does make its way inside. White fixtures can also help reflect light.

Decor: When choosing decor, remember that less is more. The room will look bigger with a few high-quality pieces than with lots of little items. For instance, you might choose one large painting rather than designing a gallery wall.

Downsizing can be daunting, especially for those used to larger homes, but it often proves financially beneficial and liberating. With organization and planning, homeowners can successfully declutter and transition to a smaller space, making thoughtful design choices to retain the things they cherish most while enhancing their quality of life.

At what age do most people downsize their home?

The age at which most people downsize their homes is between 69 and 77 years old, according to the National Association of Realtors. Baby boomers and the Silent Generation sell their homes to move close to friends and family or because their homes are too big.

Should I downsize to a smaller house?

Whether you should downsize to a smaller house depends on your personal circumstances. Downsizing often means less upkeep and can help you save on your household bills.

How do you move from a large house to a small house?

When downsizing from a large house to a small house, go room by room to minimize your belongings. Sell or donate unwanted items and keep the layout and dimensions of your new home in mind. Sell anything that you think might be too big and use that money to purchase smaller items that better fit the space.