Why a Smaller Home Could Be the Key to Your Financial Freedom

written by

Jim Mucci

posted on

November 30, 2024

smaller home financial freedom

A smaller home can help you save lots of money. When you pick a small home, you pay less each month for your house. Your power and water bills go down too. You won't need to spend as much to fix things that break. The money you save can help you in many ways. You can save it for later, pay off what you owe, or make your money grow. Many people find that small homes help them feel free from money worries. Small homes cost less to take care of, and that means more cash in your pocket.

Lower Monthly Mortgage Payments

reduce monthly housing costs

Making your house payments smaller is easy when you move to a smaller home. When you need less money from the bank, you pay less each month. Even a home that's a bit smaller can save you hundreds of dollars on your bill.

When you pay less for your home, you have more money to use for other things. You can save it for when you need it. You can put it away for when you get older. Or you can pay off other bills you have.

Many people who moved to smaller homes say they feel better about their money now. More and more people are finding out that having less space can mean having more money to spend on what matters.

Reduced Energy and Utility Bills

Living in a small home helps you save money each month. You pay less for power, gas, and water than folks in big homes. This happens because you need less heat in winter and less cooling in summer. Your AC and heater don't have to work so hard.

You save on water too. A small home has fewer sinks and toilets. You also have a smaller yard to water and less floor to mop. Hot water stays warm better because it flows through shorter pipes.

You also use less power for lights since you have fewer rooms to keep bright.

When you need new things like windows or a fridge, you spend less. This is because you need smaller items and fewer of them.

Minimal Maintenance Costs

low upkeep expenses

Small homes are easier and cheaper to take care of. You won't spend as much money fixing things when you live in a small home. You have less space to clean, paint, and care for.

When big things like your roof need fixing, you pay less. A small house means less roof to fix! The same goes for walls and floors. You can save about half the money on these big jobs.

Taking care of a small home costs less each month too. You pay less to:

  • Keep the heater and air running well
  • Get rid of bugs
  • Clean the gutters

When you want to make your home look nice, small homes win again. New carpet costs less. Fresh paint costs less. New cabinets cost less.

All this saved money can go right to your bank account. This helps you save more for fun things or for your future.

Property Tax Savings

Living in a smaller home can save you money on property taxes. When you move to a smaller home, you pay less in taxes each year. Most people save 20-50% on their tax bill when they move to a smaller place.

Get mortgage-smart in just 6 minutes

Get Mortgage Funding delivers easy-to-understand updates on home buying and financing options right to your inbox, so you can make informed decisions with confidence.

Subscription Form to Newsletter (Form no text uses Bricks ACSS Styling) Footer Sidebar

Each year, cities raise property taxes. But in a smaller home, these tax hikes don't hurt your wallet as much.

Think about this: if you have a big 2,500-square-foot house, you might pay twice as much in taxes as someone with a small 1,250-square-foot house right next door.

If you live where taxes are high, moving to a smaller home could save you thousands of dollars every year. That's money you can keep in your pocket instead of paying to the city.

Smarter Space Management

efficient space utilization strategies

Making your small home work better is easy!

Think about rooms that can do many things at once. Your office can become a guest room when friends visit.

Put things where you use them most – like keeping cooking stuff in the kitchen and work things in your office space.

Use furniture that can change with your needs, like a table that folds up when you don't need it.

This helps keep your home neat and ready for whatever you want to do.

Multi-Purpose Room Solutions

Living in a small home is easier when rooms can do many jobs. Think of your room like a helper that changes with you during the day. Your room can be an office when you work and a bedroom when you sleep.

Make your room work harder by using smart furniture:

  • Get a bed that folds into the wall
  • Use a desk that folds flat when you're done
  • Pick chairs and tables that can move and change

Split your room into spaces with moving walls or big boxes that hold your stuff. These boxes can keep things neat and make rooms feel separate.

When you use your room in many ways, you get more space to live. Your home stays clean and works better for you.

Storage Zones That Work

Your home can feel bigger when you store things smartly. Think of your home like a map with special spots for all your stuff. Put things you use every day in easy-to-reach places. Keep winter clothes and holiday items tucked away until you need them.

Look up to find more room! Put shelves on your walls from floor to ceiling. Get boxes that slide under your bed. Make a spot near your front door for coats and shoes.

In the kitchen, keep cooking tools near the stove. Put food in one spot and small machines in another.

In the bathroom, keep your daily items close. Store extra soap and cleaning stuff somewhere else.

Put signs on your storage spots so you know what goes where. Keep things in their right places. When you do this, your small home stays neat and tidy.

Decreased Home Insurance Expenses

Moving to a smaller home helps you save money on home insurance.

You pay less because smaller homes need less protection. Think of it like this – a tiny house needs less money to fix than a big house if something breaks.

You'll also save money because you'll have fewer things to protect. When you live in a smaller space, you usually own less stuff, so you need less insurance to cover it all.

Lower Coverage Amounts Required

When you move to a smaller home, you need less insurance. This means you pay less money every month to protect your home.

A small home costs less to fix or rebuild if something bad happens. You also have less room for stuff, so you don't need as much coverage for your things.

With a smaller home, you may have fewer people visit. This means you can pay less for the part of insurance that helps if someone gets hurt at your house.

Think of it like this:

  • You pay less to protect the building
  • You pay less to protect your stuff inside
  • You pay less to protect people who visit

Moving to a small home helps you save money on insurance costs in many ways.

Less Property to Protect

When you live in a small home, you don't need as much insurance. Your house has less space to protect. This means you pay less money each month for insurance.

A small home means you have less stuff to keep safe too. You won't need to buy as much insurance for your things inside. It costs less to fix or rebuild a small home if something bad happens.

Small homes have fewer parts that can break. They've less windows and doors. The roof is smaller too. When there are fewer things that can break, you pay less for insurance.

Small homes often have fewer things outside too, like decks or sheds. This means there's less chance someone could get hurt on your property. Your insurance stays low because of this.

Building Long-Term Wealth

investing for future prosperity

Moving to a smaller home can help you save money and build wealth over time. When you have a smaller home, you pay less for your house each month. You also spend less on things like power bills and fixes.

This means you have extra money to use wisely. You can:

  • Put the money you save into simple growth funds
  • Use cash from selling your big home to pay off what you owe
  • Save on house costs and buy things that make more money, like safe stocks

Think of your smaller home as your money-growing helper. Many people who moved to smaller homes now have more money saved up. You can do this too! The less you spend on your home, the more money you can save for later.