Downsizing –- it’s all about embracing simpler living. A lot of us have had to go down this road ever since the recession hit us with full force.
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In fact, you may still be thinking about downsizing right now in some way. The word itself can be applied to a lot of different situations, whether it's to do with your finances, your work or your lifestyle. So let’s check out some ways in which you could downsize and slow down, in case this is something you'd like to do.
1. Move to a smaller home. This is possibly the most obvious way to downsize. If you’re quite attached to where you live, moving to a smaller place could feel difficult to do. But if you're living in a home with a lot of unused space, then by considering a smaller space, you may be freeing up quite a good amount of money in rent or property taxes. A lot of people who downsize to cozier quarters have reported experiencing a certain freedom once they've made the change. Think of how much money you could be freeing up and adding to your savings or discount broker account once you minimize your home maintenance costs!
2. Streamline your business. Bigger is not always better! If you run your own business, you have a great degree of control over what happens to it in the future. For instance, you can work to streamline it more effectively in order to make it more profitable. And do you really need to draw up expansion plans? Realize that a growing business can bring a lot more complexity into its operations and management. With a larger business, you're probably maintaining more accounts, more lines of credit, more business credit cards and of course, more clients. You'll be juggling a lot more transactions that can take up more of your energy, time and money.
Unless you want to grow your company into a huge conglomerate, you might actually be happier and wealthier in both time and money if you keep things nice and small since smaller businesses may be easier to operate and maintain. Depending on your goals, having a huge business may not be a priority for you, especially if what you're seeking is more balance in your life.
3. Simplify your finances. Take a look at what you've got in your wallet and your mailbox. If you're seeing a ton of mail from banks and other financial institutions, it may be high time to try to simplify things for yourself. If you're a heavy credit card user, you may want to strongly consider consolidating your accounts -- say by keeping just one or two trusted rewards credit cards at hand. Do you really need to carry all those cards? If you're serious about shedding the extra plastic, then look into consolidating your accounts into a good balance transfer card which offers reasonable rates once the intro period expires.
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4. Trim your budget. If downsizing is about dealing with less things and making things smaller in various ways, you should also look at your budget. Regardless of what you're spending on a monthly basis right now, the chances are quite good that you can still make additional reductions to your expenses. Of course, if you're already planning to downsize in other areas, say such as the home you live in, then you’ll be trimming the budget by quite a bit, with less of your budget going to your mortgage or rental payments.
But even if you don't intend to make changes to your living arrangement anytime soon, you can still cut down on your bills in lots of different ways. Sit down and work out what you can afford to trim away. Perhaps you should take a look at your groceries, utility costs, membership or subscription costs for things you don't really use -- you’ll be amazed where savings can be made if you do a careful review of your budget.
5. Move to a new area. Moving to a new locale may be considered extreme by some people, but embarking on a move often forces you to take a good look at the things you own and may become a great excuse for you to declutter your environment so you can start afresh. If you're thinking of relocating, take into consideration a few things that may impact your overall financial situation. How is the cost of living in the new place? How are rent and property costs, and how is the job situation there? If you decide to move to a new area, determine the pros and cons that you'll be faced with for the long term. You may be trading commute costs for cheaper gas, for example, if you move to a new suburb after living in the city. Are the financial changes going to be worth the move?
Downsizing your life can be a dramatic move but it can also be incredibly liberating. Initially, you may find the thought of downsizing to be a bit out of your comfort zone. But if you think you're ready to go down this route, then the best thing to do is to sit down and figure out what the pros and cons are. You might be surprised at how many benefits there are to going down this path, once you do decide to commit to it.
Downsizing can sometimes be a big adjustment, especially when it involves the decision of uprooting stakes and relocating across the country, but it doesn't have to be this way for you to begin benefiting from this kind of change. In many cases, you might get away with just a few minor adjustments and tweaks to your lifestyle, to free up more money, time and space. Why not consider whether downsizing could work for you?
Silicon Valley Blogger is a full time blogger and online entrepreneur who writes for The Digerati Life and The Smarter Wallet sites that cover general personal finance topics ranging from investing and saving to credit and debt management.