Being trapped in a cycle of debt is so exhausting. It feels like every month is a struggle to make ends meet and that big pile of debt never gets any smaller. The first thing you should do is go through your budget and cut out any unnecessary expenses to see if you can fix your finances. But what if you’ve already done that and you’re still struggling to manage your debt?
In that case, you need to look at your necessary expenses and find ways to cut back on those. Your housing costs are usually the biggest monthly expense and if you are stuck in debt, downsizing could be the answer. If you move into a smaller place with a cheaper mortgage and lower running costs, you could use the extra money to pay off debt. However, this is a big decision and it isn’t always the best move. Before you decide anything, consider these factors to help you work out whether downsizing is the right option or not.
Can You Sell Your Home Easily?
The housing market can be unpredictable these days and you need to know that you’ll be able to find a buyer for your home. If prices are on the way up again, then this isn’t so much of a problem, but if they’re still going down in your area, it could take a long time for your property to sell without the price dropping significantly.
However, there are some great home-buying services that can help you push the sale through quickly. Companies like FasterHouse will give you a quick offer so you can sell your home and start looking for a more affordable option. This is a huge help if you are in a tough financial situation and you need to downsize quickly.
Is There Enough Value Left In The Property To Cover Your Debts?
If you’ve only got a small amount of equity in your home, you might have to give up more than just your mortgage. Even if the sale is enough to cover what you owe on the house, will there be anything left over for a down payment on a new property? Downsizing only benefits you if you will have enough left over to pay off a big chunk of your debts and put a deposit on a smaller house.
Could You Live In A Small House?
If you’re used to a big house with plenty of room, downsizing can be really hard. Moving into something much smaller is going to affect your lifestyle and if that’s going to make you even more stressed out, it isn’t worth the hassle. You need to think about how living in a small house would affect your life now and in the future. After all, you don’t want to make this change only to regret it later and find yourself stuck after you’ve got used to your new lifestyle. Some people love the idea of a tiny house but other people need more space, so think about this before you make your decision.
Downsizing could help you out of a financial bind, but you need to think carefully about whether it is the right move for you.
