Personal Finance

Planning ahead is key for a smoother transition from the family home.
By Gail Bebee | 05/05/14

Canadians downsize their living space for many reasons. Acolytes of the simple living movement want to un-complicate their lives. Workers relocating to another city or country for employment are unable to move all their stuff. Individuals hit with financial woes due to job loss, family break-up or other vicissitudes in life must reduce expenses. While these reasons do not apply to everyone, almost all Canadians will face downsizing at some point in their lives.

About the Author
Gail Bebee est conférencière indépendante et enseignante dans le domaine des finances personnelles. Elle est aussi l'auteure du livre No Hype--The Straight Goods on Investing Your Money. On peut la joindre à gbebee@gailbebee.com; son site Web est www.gailbebee.com.

Your first encounter may be helping aging parents move from the family home. Later in life, illness, the death of a spouse, mobility issues or accessing home equity to fund retirement will trigger your own experience with downsizing.

The ideal time to start thinking about downsizing is when your focus has moved beyond your career and raising a family to thoughts about life after work.

Downsizing before circumstances force a hurried move to a smaller living space means you are in control. You decide which cherished possessions you want to take to your new home, which items to give to family members or friends, and where you will live. You avoid burdening your children with these responsibilities at difficult times such as when you are hospitalized and unable to return home.

De-cluttering is a good first step. Getting started can be as simple as making and following some basic rules. For example, anything that is broken will be thrown away. Every week, something that is no longer needed will leave your home. For every new item entering the house, a similar existing item will leave.

The garbage can is not your only option. Many people could benefit from stuff you no longer need. Online marketplaces such as Kijiji or craigslist are an inexpensive way to advertise items for sale or to give away. Donating to second-hand or thrift stores or charities such as women's shelters is another option. Local recycling depots may accept paper, plastic, household hazardous waste and electronics.

Deciding what to let go of can be tough. The job is easier if you de-clutter with a friend or relative who can provide encouragement and support. Periodically rewarding yourself for completing a specific task such as clearing out a closet can be a motivator. Your reward should be an activity such as dinner out, not more stuff!

Finding the right new, smaller accommodation that also fits your retirement budget takes research and planning. If an adult lifestyle community is on your radar, spend a few weekends visiting several such communities. Check out house styles and pricing, and inquire about activities and services, particularly medical.

If a condo is in your future, visit open houses in buildings you like. Speak with friends who are condo owners about the pros and cons of the lifestyle. Look into the costs of condo living. If your next move is to a retirement home, investigate homes in the community where would like to live. You may need to add your name to the waiting list now for your preferred choice.

Contacting a realtor to request a house appraisal and suggestions on how to prepare your house for sale is a downsizing planning step with significant benefits. You give yourself time to get your house ready to sell. You have less stress when it comes time to sell. You can better plan your retirement finances because you have a reasonable estimate of the proceeds from your house sale.

In some cases, such as seniors without children, or those whose families live far away, the best way to downsize may be to hire a firm that specializes in helping seniors transition from the family home. These businesses variously self-identify as senior downsizing services, senior relocation and transition specialists, downsizing planners or seniors' move managers, but their services are similar.

They will organize your belongings, hold contents sales and arrange for the disposition of unwanted stuff. They will design the layout of a new living space so a client's furniture will fit, take care of home repairs, and deal with movers, utilities companies, insurers and address changes. Some will even assist in the search for the right retirement residence.

Downsizing is not a government-regulated profession. The best way to find the right person is through referrals from someone you trust. Personality fit is important, so it is wise to consider at least two firms and insist on interviewing the person who would be your contact. Find out about each candidate's background and experience, and ask for references from past clients. The company you choose should be bonded and carry liability insurance.

Some downsizing firms charge by the project and provide written estimates. Elaine Frost of Trusted Transitions says that knowing the costs upfront lessens the stress of downsizing. Other firms charge by the hour. Depending on the nature of the service and the company, rates can range from $25 to $80 per hour. Expect to pay more for well-established firms that are bonded and have the necessary insurance.

Regardless of how you choose to proceed, educate yourself about what's involved before downsizing becomes a necessity. Doing so will lead to better decisions and less stress when you actually confront this time-consuming, emotion-laden task.

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