By Stephanie Holmes-Winton, personal finance expert
You gotta love a girl who grew up as one of the richest kids in the world (in one of the richest homes in the world –
a 57,000 sq ft mansion, known as “The Manor,” that went on the market for $150 million in 2009), yet refused to
bank on her parents’ money. Indeed, when her father - television mogul Aaron Spelling - passed away, she
reportedly got less than $1 million of his $500 million estate.
So it’s even more refreshing that Tori Spelling and husband Dean McDermott continued to surprise a lot of people
when they put their “mini-mansion” in Encino up for sale and moved into a much smaller home in Malibu. What
was Tori’s reasoning behind this decision? Given the costly Malibu real estate market, the new home has been
reported to cost about as much as the sale price of the former home, so it can’t be money; but it is remarkably
smaller (around 2,300 square feet). Indeed, Tori and Dean reportedly wanted a cozier home so their growing
brood wasn’t stretched over so much space. They wanted to make sure that as a family of five, they were together
most of the time when at home. They also wanted to have more animals, thanks to the new nearly 2-acre property
(have you seen the mini farm they had hidden in the backyard of their old place?), so their children would grow up
learning to care for other living things. How awesome is that?
Most of us have heard of downsizing once the kids fly the coop so we don’t end up rattling around a big old empty
house. But what about early life downsizing? What about seizing the opportunity to look at what you really want
from your life now? You might just find that for you too, less house could equal more of the life you want.
What could you do with less house?
Less to dust is just the beginning of the possible upside to downsizing much earlier in life. A smaller pad can
happen for all kinds of different reasons, the most important of which should be that it helps you to fulfill your true
desires in life.
Think about it…
What freedoms could you experience from less house?
What family time could you recapture?
What money could you save for fulfilling life goals and experiences?
With that in mind, let’s start by exploring some financial benefits to downsizing:
Less to clean. Whether you are a DIY duster or have a cleaning lady, time and money can be saved when
there is less space to clean.
Shrink your mortgage. If downsizing results in the purchase of a less expensive home, you can shave years
off your repayment clock and save thousands in interest on dollars you no longer have to borrow.
Less to heat. If you are strategic about it, you may be able to find a home that not only has less space to
heat, but also one with the most efficient type of heating.
Lower property taxes. Generally, if you purchase a less expensive home, you could save some serious
dough on municipal taxes.
And what about the lifestyle benefits?
Location, location, location. Downsizing may mean you can afford a home in a more convenient location to
reduce your commute. Perhaps you can move somewhere that allows you to walk to the grocery store or use
Purge. Too many of us are drowning in stuff. There are way too many TV shows about money being spent on
storage lockers filled to the brim with stuff – and then abandoned for other people to bid on. How crazy does
that sound when you really think about it? Indeed, how freeing would it be to rid yourself of things you don’t
need; you may not even realize what’s bogging you down until you just let go.
Life lesson. Let’s be frank, kids don’t model the things you say, they copy what you do. Consciously opting for
less space can teach your kids a valuable lesson about what’s really important in life.
Together time. Think about time at the cottage vs. time at home. A smaller space means that the family just
can’t get quite so spread out. By the very nature of the space, you end up together more.
Smaller doesn’t mean cheaper
Be careful. Even if you decide to downsize, it doesn’t mean you’ll automatically spend less. It’s easy to rationalize
renovating a smaller space and get carried away fixing up your smaller abode to run more efficiently (cool
estate fees, land transfer tax, furnishings that may need to be given away or sold (and replaced with more
compact alternatives), among other often unexpected expenses.
Instead of jumping right in, take the time to live in the smaller space so you can make strategic purchases. Set a
monthly limit on how much you will spend each month getting your new place sorted out. Don’t assume the rooms
or closets must be used for the same purposes as the last homeowner. A smaller kitchen may come without a
pantry, but a conveniently located coat closet may make a great alternative that you can convert with some
Where life meets money, true planning begins
Taking your family down a couple of hundred, or a couple of thousand, square feet isn’t for everyone. But it is a
great option that far too many of us leave off our list of possibilities until our golden years. We can all live our own
definition of success, and it doesn’t have to include a large home.
It comes down to asking yourself what you really and truly want from your life. If downsizing could help you achieve
that, do your homework, make a plan – and start thinking small!