Today’s Smart Money Question:
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Here Are Just A Handful Of Things You’ll Learn:
On today’s episode we’re talking about when to downsize your house. Rick recently sent us this question about his house:
“Our house is a lot bigger than what we need. We should probably downsize, but it’s where we raised our family, so I’m emotionally attached to it. It is foolish to keep it if we could live somewhere else cheaper?”
First, ask yourself, is it really going to be cheaper if you downsize? Even before the real estate market boom, we saw clients who stayed in the local area and downsized in square footage but not cost.
Emotions, in some way or another, are going to have relevance in our financial life. The key is, how much are we going to allow it to happen? When we look at numbers, numbers don’t have emotions. That will be helpful as you decide.
Is the emotional attachment worth it to stay versus putting money in your pocket? This will help you determine what your emotional attachment to your home is costing you. Other clients of ours also have these struggles when it comes to vacation homes and whether they should keep them.
Another thing to consider is whether it’s better to own or rent your home in retirement. Some clients don’t own their own homes, and they just rent. One client rents for two years and then moves again so he can get a new, fresh house every two years.
If you’re going to do that, figure out if your income can support the rental cost.
Listen to the full episode or use the timestamps below to jump to a specific section.
0:57 – Protecting your personal information
3:54 – Downsize?
7:33 – Own or rent?
8:37 – Client was done with homeownership
10:37 – Taxes
11:50 – Coming to conclusions
14:04 – Answering questions
“Emotions, in some way or another, are going to have relevance in our financial life. The key is, how much are we going to allow it to happen?”
-Matt Hausman
Additional Podcast Episodes:
- How to Handle an Unplanned Retirement
- How Much Money Do I Need to Retire?
- Should You Pay Off Mortgage or Buy Investment Property?
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The host: Matt Hausman – Contact – Resources – Call: 610-719-3003
