Feel like no matter how hard you try you just can’t seem to get ahead? You’re not alone – it’s an alarming fact that cash-strapped Aussies are consistently spending more money than they earn and have very little savings stashed away to cover for emergencies. The study, which was released by Commonwealth Bank last year, also revealed that around 56% of us wouldn’t have enough cash to survive if we lost our income.
Downsizing is the fastest and easiest way to shed some debt and reduce your expenses so you can start putting some extra bucks in the bank. Whether you’re renting or have a mortgage, trimming down your living space can save you a LOT of money. And as an added benefit, downsizing and de-cluttering can reduce your stress levels.
How you can save money by downsizing
How much space do you really need? If you’re paying for an extra bedroom to store your stuff in or you have 2 living rooms but really only use one, then you’re paying for space that isn’t serving a useful purpose. By moving to a smaller house you’ll save money on your rent or mortgage.
If you’re not sure how much you could save, do a rough estimate of how much space you have that isn’t really necessary. As an example, if you think you would need around 25% less space if you just got rid of some of the stuff you’ve been stashing away, then moving to a smaller place could save you around 25% on your rent or mortgage. If you’re currently forking out say $500 a week on your rent or mortgage, that means a saving of $125 a week or $541 a month!
When you downsize you’ll also probably save on your power bill because you don’t need to spend as much to keep your home cool in the summer or warm in the winter.
Although you may not realise it, you can actually also save on your healthcare related bills when you declutter and downsize – that’s because when you get rid of all of that stuff that’s been lying around for years, the air in your home will be a lot cleaner with fewer allergens and dust mites, so you’ll feel a lot healthier!
How you can make money by downsizing
If you make the decision to downsize, the first step is to get rid of the clutter – but that doesn’t mean you need to throw it away. One man’s trash is another man’s treasure as the saying goes, so here’s the perfect opportunity to turn that unwanted stuff into cash!
Try eBay, Gumtree and Facebook’s marketplace – they’re all great places to advertise your stuff and find an interested buyer. A garage sale is another option but be ready for those bargain hunters to start ringing your doorbell at 6:00am even if you’ve advertised the start time as 8:00am.
How to start downsizing
If you decide to declutter and downsize your life, give yourself a bit of time to get organised. It’s easy to get attached to stuff but if you go through your home room by room, you’ll probably find things you didn’t even know you had - and what’s the point of hanging on to that stuff!
As a general rule of thumb, if you haven’t used it in the last 12 months you’re probably not going to use it in the future – so it’s time to say goodbye to that old fondue set, the sombrero you bought on holiday 10 years ago and the broken sewing machine that can’t be used.
The simplest way to approach the de-cluttering job is to grab a couple of big boxes – one for stuff you think you can sell and another for rubbish that just needs to go in the bin (like those medicines that expired 3 years ago and the shoes at the back of the closet that have turned green with mould). As you go through room-by-room, start listing the stuff that you think you can sell online and watch the money come rolling in. This is definitely NOT a job to try to tackle in one day, so cut yourself some slack and do it slowly over a number of weekends.
Wish you’d downsized 6 months ago?
Reading this and wishing you’d started your downsizing journey 6 months ago so you’d have some extra money right now to cover those unexpected expenses? There’s no need to stress - just check out our flexible mini-loans to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, we can usually get a payment into your bank account within a few hours - so you can stop worrying about those bills and start focussing on de-cluttering.