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Home Cents

Managing your household finances

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Smiling woman holding miniature house (Jupiterimages/(c) Jupiterimages)
Smiling woman holding miniature house (Jupiterimages/(c) Jupiterimages)

Home Cents

Is it time to downsize your mortgage? Add to ...

We are in the process of saying goodbye to an antique gramophone-radio stereo that once belonged to my father-in-law. It is beautiful, solid wood, with a warm, rich sound, the sort of piece nobody makes any more. Parting with it is a real struggle, but we need to fill the space it occupies with something more practical.

So when one of my colleagues started talking about taking advantage of sizzling property prices to downsize to a smaller house (and sock away some cash for his retirement and his sons' university years), I felt his pain.

Does downsizing to save money on your mortgage make sense for you? Most of us shudder at the thought, mainly because of all the stuff that we have spent decades accumulating and scattering over a couple of thousand square feet.

Yet, think about how much that space is costing you. If you buy a smaller place and cut your mortgage from say, $1,500 a month to $1,000 a month, that's $6,000 a year that you could use for something more productive or enjoyable than storing old furniture, equipment and clothes that may never fit you again.

It sounds good for the pocketbook, but downsizing can be hard, physically as well as emotionally. Where do you even begin combing through your possessions to figure out what to keep and what to ditch? And how can you make sure that you get the most bang for your buck from your new place? Here are some ideas.

1. Start the sorting and packing process in the rooms you use the least -- guest bedrooms, basements or the formal living room.

2. Start with large items so that you can feel you're making progress. Consider what you will do with the furniture before you start on the knick-knacks.

3. Sort items by using stickers, making piles, or making detailed lists of what to keep, what to give away and to whom. Be realistic about what you actually use regularly and what you are just used to having around. Consider having a garage sale. If you cannot be bothered, there are charities, such as the Canadian Diabetes Association, that will pick up household goods from your porch, or you can freecycle. If you have many valuable pieces, consider a home auction: You can hire an agency to catalog and appraise your possessions and coordinate an auction for a percentage of the profit.

4. Don't hesitate to tell adult children it is time to collect their childhood belongings and store their own mementos. Give them a deadline and tell them that leftovers will be donated to charity.

5. If you are sentimentally attached to something that has to go, write down its history and take a photograph -- and then be prepared to bid it adieu. (Ask yourself: Am I getting $6,000 a year worth of happiness out of this?)

6. Set aside time for the sorting and packing process, no more than a couple of hours at a time. It can be an emotional process, and it can be overwhelming. Give yourself enough time to smile at old pictures and re-read old letters. Be prepared to start at least three months before you move.

7. In your new house, think versatility. Consider open, multi-purpose rooms: A family or game room; a great room, which combines space for living, dining and cooking; and a loft that doubles as a guest bedroom are popular options. This strategy gets rid of unnecessary interior walls, which also helps reduce costs.

8. Be practical when it comes to your new space. Do you really need a formal living and dining room? (Only when the Queen comes to tea, perhaps.) Or are they simply extra spaces to furnish, vacuum and dust?

9. Get a feel for the size of your new rooms by comparing them to rooms of similar dimensions in your present home, if you can. This will help you figure out how much furniture you can fit. Use floor plans to realistically arrange your furniture before the move.

10. Consider spending money on an attractive eat-in kitchen. That's where family and friends generally end up congregating, after all.

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