Downsizing may well take different forms. For some families, downsizing will involve a move to a lower cost of living area, but may not change the size of the home. If moving is not desirable, or not an option, downsizing may involve moving to a smaller home, a less desirable neighborhood, or a small nearby town. If you have substantial equity in your current home, downsizing may allow you to free up your equity, or even to pay cash for a new home. Families may want to downsize to simplify life, reduce financial need, or allow for more savings.

Downsizing may be less a choice and more of a necessity if poor financial choices have left you struggling. If your house payment is more than you can afford, or you need to free up funds to repay debt, finding a smaller, less expensive home may be critical for your financial well being. It may even be wise to rent a home or apartment for a few years while you find your financial footing.

Many older Americans opt to downsize to move to retirement communities, condos or smaller homes. A large home is expensive to heat and cool, cumbersome to maintain, and lawn care may become more difficult with age. If children have relocated, retirees may want to move to be near them, or to choose a more suitable climate.

What should you consider when looking to downsize? There are financial issues that should be weighed, as well as logistical ones. You should take the time to learn about the real estate market in your area, make any essential home improvements, and avoid putting yourself in the position of making two mortgage payments, particularly if the market is slow. Moving into a short term rental would likely be more affordable than handling two mortgage payments, even for a short time. If you are downsizing due to financial concerns, taking the time to speak with a financial counselor before making any decisions may be wise to help you choose the best option for your needs.

In logistical terms, you should consider how much space you and your family need. A couple may be comfortable in a small one or two bedroom home, but a family with children may prioritize additional living space or a fenced in yard. Keep your priorities in mind as you look for a new, smaller home. Are you willing to sacrifice space for a better location, or vice versa? Perhaps you will give up a modern kitchen in exchange for a great front porch. While simplifying and downsizing will mean giving some things up, you can still find a home that meets your needs and will be a comfortable and welcoming place for your family.