Why Downsizing Your Home Can Save You Money

Just this week I trimmed down my living space by at least 1,000 square feet. I went from a suburban home with tons of storage to a downtown city loft with practically none. It was one of the best decisions I ever made and my life has become not only so much simpler, but also way more inexpensive!

What many people don’t realize is that downsizing and decluttering can really save you a lot of money. In addition, downsizing and decluttering can make your life considerably more stress-free.

First, I want to analyze our attachment to “stuff” and resistance to downsizing. Then, I’m going to give some tips on downsizing and how it can help you save a ton of money.

Our Attachment to “Stuff”

Before I became a full-time writer, I owned a thriving professional organizing business. My job, in a nutshell, was to help people declutter and organize their homes.

So I understand completely how attached we can become to our things, as well as why so many of us buy big homes or spend money on storage units to store all our stuff.

Many of our things help give us a sense of identity. For instance, that tower of books helps reaffirm that yes, we love to read (and it proves how intellectual we are to our friends). Our closets full of clothes reinforce our individualist sense of “self.” Our antique furniture might help us feel grounded in a way that modern furniture just can’t.

We also might inherent stuff from our family and friends. These items can have a powerful hold on us. Many times we can’t let go of these things because they’re a crucial link to a person we love. Stuff can take on a life of its own, especially if it’s given or bequest to us by someone special.

The problem occurs when we don’t self-regulate our consumption of stuff, and we don’t get rid of what we already have. This mentality manifests itself when we buy stuff to fill a void in our life, when we buy to make ourselves feel better after a bad day, or when we buy because we don’t have anything else to do.

This kind of consumption easily leads to packed homes that require significant investments to keep up. We spend time cleaning around this stuff. We pay a larger mortgage (or monthly storage unit payments) to store it all, and we pay the larger utilities that go along with the bigger house.

In a sense, the stuff we own ends up owning us.

The good news? Well, the good news is that we can hop off this consumption train any time we want. And if you do, you just might find you’re happier, have more time, and definitely have more money in your pocket.

How to Save Money Downsizing

There are several ways you can save money and have a happier life when you downsize:

1. Save on Home Costs

The less stuff you have, the smaller space you need to store it all.

The move I just made is going to save me $260 per month on housing. Because I got rid of so much stuff before my move, I didn’t need such a big space anymore. My savings are going to add up instantly.

Stop and think about the size of your home, and how much of that space you’re paying to store stuff. You might be surprised at how much your stuff is costing you!

Here’s an eye-opening exercise I used to use with all my organizing clients:

  • Write down the total square feet of your house.
  • Write down how much you pay monthly for your house or apartment.
  • Divide your total square feet by your monthly payment; this is how much you pay monthly per square foot.
  • Now estimate how many square feet you’re using to store stuff: include your closets, your basement, extra bedrooms, and your garage.
  • Multiply that times your “monthly square foot” cost. Yikes!

For instance, imagine your home is 2,500 square feet (including storage space) and your mortgage is $1,600 per month. You’re paying .64 cents per square foot, per month, for your home space.

If you’re using 1,000 square feet total to store stuff, this means your stuff is costing you $640 per month. How much would you save by downsizing to a smaller home with a smaller mortgage payment? You do the math!

2. Save on Utilities

A bigger home means you’re spending more every month to heat and cool the space. Not only is this bad for your wallet, but it’s also bad for the environment because you’re consuming more energy.

You can use the same exercise that we just did to figure out how much you’re spending to heat and cool every square inch of your home.

Simply take the yearly total of your heating and cooling (or you can do just one month) and divide your square footage into that number.

For instance, if you’re spending $300 per month on electricity and heat, and your home is 2,500 square feet, you’re paying .12 cents per square foot for utilities. That 1,000 square feet you’re using to store stuff is costing you $120 per month to heat and cool.

3. Save on Health Care

When you live in a home that’s packed with stuff and clutter, chances are your air quality is not as healthy as homes with fewer things.


Because homes that are cluttered are almost always dustier and dirtier than homes without it. They are much more difficult and time-consuming to clean.

Owning a house full of stuff is also often stressful. You worry about it. You groan when you have to clean it or move stuff around.

This stress can also negatively impact your health.

Added Bonus: Making Money off Downsizing

Sites like eBay or Amazon are a boon to “declutterers” because you can sell your stuff there and recoup some of your investment back.

In fact, I’ve sold several of my used books on Amazon. Last month, I brought in over $250 selling books online. The month before, close to $100. And it was a cinch to set up and sell!

Find ways to sell your stuff. It’s worth it!

Last Word

I know it’s easy to get attached to stuff. And the process of downsizing is not easy or quick. Even with my professional experience, it took me months of regular decluttering to trim down our stuff. And I still feel like I have too much!

If you decide to declutter and downsize your life, give yourself time and space to do it. Work slowly! Focus on one room, or even one corner, at a time. Don’t haphazardly declutter because you’ll likely feel you aren’t making progress (because you can’t see it) and quit.

Decluttering and downsizing can be a challenge, but I promise it’s worth it in the end. The more you get rid of, the more you’re going to save for things that truly matter, like living a debt-free life or saving for your kids’ college education!

(photo credit: John Pannell)

  • http://cootiehog.com Jaynee

    My husband and I are planning on downsizing when our kids are done with college – we will sell a healthy chunk of our stuff (or give it away to our children as they get out on their own) and move into a cute little one bedroom apartment in NYC and live out the rest of our days. We used to live in that area and moved away in order to provide better educational opportunities for our kids. Once they are on their own, we’ll be able to go back. I predict we’ll be reducing our square footage by at least 66%, and all the STUFF we’ve been storing in the attic can go BYE BYE (my husband is a bit of a packrat).

  • Heather Levin

    Jaynee, That sounds like a really great plan! Give yourself plenty of time to start going through things. I spent at least 4 months (off and on) going through my things and downsizing. It really did take that long because you’ll go through the house, get rid of stuff, and then go through it again and find more stuff that “you couldn’t live without before”. If you go slower, over a longer period, you’ll probably end up getting rid of more. Good luck on your move!

  • http://www.retireby40.org retireby40

    We downsized to a downtown condo in 2007. Another item that we saved on is vehicle cost. We downsized to one car and it worked out really well. Even when it broke down, we were able to use a shared vehicle program (zipcar) for a few months and didn’t have to rush to get a new car. Save on gas, car payment, car maintenance and repair, insurance, etc…

  • Wolf

    Well, I inherited a lot of good stuff from my grandfather, crated and shipped over to me from Germany. This stuff is over a hundred years old and I really like it. Very valuable items. But it fills up my house.
    So when I retire I do not want to sell this but I have no idea how to keep it in the family. Because I will be off traveling and won’t need to surround myself with these things. That doesn’t mean I have to throw it away. Maybe a museum will take custody of the items until my son has a place of his own.

  • Twinny2

    When our 3 kids were growing up, both my husband and I thought they’d want a lot of our things when they were on their own. So we kept the old but continued to buy new. Turns out, none of the kids wanted any of our things, preferring to buy their own, even used stuff, to meet their tastes. The only things they actually asked for were: an antique dining room set when one daughter finally bought a house that could accommodate it, and my husband’s old Army blankets from World War II, not out of sentiment but because they are so light and warm!

    • Heather Levin

      Twinny2, I’m in the same situation, but on the opposite end! My parents keep saving stuff for me because they think I’ll change my mind and want it “some day”. And just like you, my tastes vary widely from theirs!

      I guess this is likely a common problem between parents and kids. :)

  • Janedodd60

    Hi Heather. Can you give me some advice about encouraging my partner to clear out his old stuff? He’s more than happy to moan about mine and the kids’ clutter, but his clutter is all over the house, and he can’t see it! Thanks, Jane.

  • Dawnitha

    thanks Heather – you have inspired me…now what would you suggest as a free resource on HOW to productively de-clutter? You mentioned one spot at a time, and that it took you about 4 months by going back through a second pass.
    Do you have a checklist or process for each area? For example, I also have a ton of books, several file cabinets I hate to look in, clothes wardrobe full…and a fair number of items from travel or family members.
    OH – and a FULL 8 foot high french antique armour…full of photos. And 2 large closets full of material from coaching courses and other training courses I have completed. I don’t know what to do with THAT stuff! I don’t even know what criteria to apply to go through it and keep/throw away.
    I MAY need it in my career, or I may never look at it again. :)

    Even though my house is generally neat and uncluttered – all the stuff STUFFED into these storage areas makes the thought of going through them overwhelming…
    Ideas? Resources?

  • Karina

    Thank you SO MUCH! I have been agonizing over making a decision to downsize for about 3-4 years now. “Stuck” with the house following a divorce – but I wanted it because I truly believed I would get a loan modification or be able to refinance. That hasn’t happened after several attempts including a short sale, but I’m still here and I can scrape by making the payments, but don’t have the money for maintenance or repairs. It’s a wonderful home in a town that I’ve fallen in love with. I couldn’t get over the thought of not owning something in this town. But now I KNOW it’s way too much house and yard, and I’m a social person who has been tied to my house. Although it will be a huge financial loss if I sell, I know it will be better in the long run. I feel like Dawnitha in terms of the volume of de-cluttering I have to do. But for the first time in years, I also feel relieved just thinking of how much less stressed I’ll be! Thank you. (I’ve read several other articles online and this is the first one that really convinced me about what I need to do).

  • Buddy Zuckerman

    Generally I get rid of something if I pick it up and realize the last time I touched it was one year ago when I was thinking about whether or not I should keep it.