Many people say they want to downsize, but few do it. Even fewer know how to do it effectively and efficiently. They learn by doing, making a lot of mistakes along the way. Bankrate.com has a guide to downsizing. It explains the reasons why people downsize, how to estimate potential savings, and how to go about downsizing. It doesn’t go into great detail, but it’s a good way to make sure you’ve considered all the angles and options.
After coming up with your “new” mortgage payment, you should also be able to determine a rough estimate for utility costs. If you’re thinking about moving out of state, take a look at the U.S. Energy Information Administration’s recent numbers for average monthly bills for single family homes by state. If you’re downsizing but also moving to a state where energy costs are on average higher, the savings may not be as great as you’d hoped. However, differences in energy costs can also work in your favor.
Let’s say you currently live in Connecticut, where energy bills are among the highest in the nation at around $142 per month. If you move to Florida, where monthly energy bills are $123 on average, you’ll save a couple hundred dollars a year on energy alone.