On downsizing :: the finances behind our move
There’s no question about it, the Farmhouse was my dream home. From the moment I walked in 7 years ago, I pictured it as our family’s forever house - kids running around, slamming screen doors, family weddings in the backyard, the whole shebang. But, just a couple months ago, we sold this storybook property and moved into a fixer in town. And we couldn’t be happier! Today I’m diving into what we’ve gained by taking this big leap including how downsizing has looked for our finances. Let’s get into it…
downsizing
The pursuit of happiness doesn’t always require bigger and better. And in our case, bigger and better might have actually been a hinderance. When we sold our big beautiful/magical/wonderful Farmhouse this past summer and moved into town, we downsized a lot of aspects of our life. We went from 3 acres of yard/tree/stream maintenance to .3 acres of manageable city lot. We traded 30+ minutes of car commuting a day, to walking and biking everywhere. We’re cleaning, heating, and maintaining 2000sf of house, instead of 3000sf. And we went from paying a hefty mortgage to having no mortgage at all.
There are so many benefits to downsizing, but I wanted to center today’s post around the tangible aspect of finances. Even though we didn’t make this big move for the financial gains—walkability, connectedness, and efficiency took top billing—the additional financial freedom has been a huge positive. I gathered from our lender that downsizing isn’t very common - in fact we were required to write a letter detailing the “special circumstances” around buying a smaller house than our current one - and I want to make a case for it.
the finances
Here are some of the monthly numbers behind our changes. We did our best to get exact numbers when we could and conservative guesses when we couldn’t.
Mortgage
Our new house purchase price was less than half what the Farmhouse sold for. By downsizing and buying a less-nice house, we walked away with enough proceeds (tax free!) to pay off the new house’s debt while still reserving enough for a nice renovation fund. The intricate game of buying the new house - including a well-timed HELOC, choosing a mortgage with the highest interest rate possible, and payoff – is worthy of it’s own post. But while it wasn’t simple, it was 100% worth it. We’re saving $2500/month
Second Car
We were on the cusp of buying a second car to shuttle our family to and from the Farmhouse. It was a running joke among friends how our family with 3 school-aged kids and all their attendant activities, got by with one vehicle. Well we wouldn’t have lasted much longer. But before we pulled the trigger, we moved into town. And now the truck often sits parked for days on end. Walking and biking have became the default mode of transportation for our family. Case in point, most days after school I walk down to pick up our 6 and 8-year old and walk them home for a snack while our oldest bikes to swim practice and then bikes home for dinner time all by himself. It reminds me of being a kid in the 90s and it’s AWESOME! Back when we lived in the country, this same after-school routine had me driving in to pick up all the kids from school, shuttling them to the swimming pool and other errands and waiting hours for everyone’s activities to be done before driving everyone home for dinner.
Technically we hand’t actually bought the second car yet, but I wanted to include it in the comparison since we really did need the second vehicle in order to live in the country. A payment for a minivan or large SUV would be in the realm of $600 with insurance another $100. We’re saving $700/month
Fuel
When diesel hit $5/gallon we were all too aware of how much we were driving. We calculated what each trip into town cost us and were shocked. Our diesel truck gets 20mpg, and the roundtrip mileage into town from the Farmhouse was ~15 miles. With diesel costing $5/gal, that’s $3.75 per round trip. Round that up to $4 when factoring in DEF and a bit of maintenance. On a typical week we’d make about 10 trips into town during the school year and 5 trips during the summer. That averages out to 38 trips a month at $4 a pop that adds up. We’re saving $150/month
Lawn Care
I think it’s generally underappreciated just how much time, energy, and money goes into maintaining acreage. There is always grass to be mowed, trees to be trimmed/cut/chipped, leaves to be raked, burn piles to be torched, snow to be plowed, and mud to be cleaned. It’s a Sisyphean task with no end.
We had a lot of equipment to maintain the property: an electric riding lawn mower, hedge trimmer, pole saw, leaf blower, chain saw, flatbed trailer, tractor,… We added up the dollar value of all that equipment and it came to well over $15,000. We’ll be selling much of it because we just don’t need it at our in-town house, and what we do need is a lot smaller (and less expensive). For instance, Garrett sold our electric riding lawn mower for $4k last month and we’ll pick up an electric push mower in the Spring to mow our smaller yard that should cost ~$300. Some people get a lot of joy from riding around on their tractor, tending to their land (and more power to them!), but for Garrett and I, all that maintenance and equipment felt like a weight on our shoulders. As Thoreau said, “the price of anything is the amount of life you exchange for it.”
The cost of lawn care is an estimate since we did all the maintenance at the Farmhouse ourselves and it’s hard to turn the equipment cost into a monthly amount. So instead lets take the monthly lawn care bid we did get for the Farmhouse from a lawn crew. The estimate was $600/month (back in 2021) for 6 months of the year. We’re saving $300/month
Utilities
A smaller house means less utilities. But it’ll take a year of living here to really understand the savings. Another note, the Farmhouse was on a well and septic so we didn’t have city water and sewer bills like we do now. So it’s possible the savings will even out to not much. But I’ll leave this at $0 and check in next Fall.
Total Savings
We’re saving $3650/month. That’s a lot of money, about $43,800/year in fact.
Let’s extend that amount through the life of our Farmhouse mortgage. We had one of those lovely pandemic mortgages - 2.75%, 15 year (yes, it was hard to leave that!) - and there was about 12 years left on it, which would coincide with Garrett and I being empty nesters. 12 years of $43,800 savings is $525,600. Keep in mind this is simply savings from downsizing and moving in-town!
We’re only a few months into this new chapter but so far, we’ve felt like we’ve gained a lot from downsizing so many aspects of our lives! In addition to increased financial freedom, our biggest gain has been time. Time to be at home. A slower morning. A leisurely walk to school. And less wasting time in town between activities. Plus the time and resources to travel more (we have some fun trips planned!). We feel more connected to our neighborhood and community. And our kids have gained independence.
With hindsight I wonder why it took us so long to make the move. But inertia is thing. With life humming along, as kids get older, making a large shift can feel like trying to turn the Titanic. Indeed the hardest part of our big change was starting. Moving sucks and the logistics of taking out another loan and finishing up projects, packing, and settling into a fixer weren’t simple. But now that we’re on the other side of all of that, I am so thankful we did it. I’ll always cherish our time at the Farmhouse and look back fondly, dreamily, on the photos. I really do love that house, but I love all that we’ve gained from the move even more!
xx
