Preparing to very reluctantly downsize

[lalavander]

It’s been a turbulent few years. In 2020 we purchased our forever home. DH had his own contracting business and was earning well, my own business was about to have 3 very busy years followed by 2 much quieter ones. DH had to pivot and take on a permanent roll, which came with a paycut due to a multitude of reasons and my own business has been a lot quieter (as everyone else within my industry has found) for a couple of years now.
Our mortgage rate has doubled. We have been gripping onto our home best we can but it’s getting to the point where we don’t have enough money to do much other than survive. It’s been tough.

We are slowly accepting we need to say goodbye to our detached, 5 bed in a desirable location and downsize, potentially to a less desirable location to make a dent in our mortgage. Our property has increased in value by about 200k and it’s a chance to take that money and buy something smaller with a smaller mortgage BUT I am so sad.

i didn’t realise how fond I’d grown of our home until we’ve really started considering selling. I keep looking at photos of special memories made here, looking at the garden and the kids bedrooms just how they want them and CRYING. I’m grieving a house. Who’d have thought it.

Has anyone else been in a similar situation being forced to downsize and relocate a little (albeit locally). I feel like we are going backwards and feel sad that our kids won’t have a “family home” to remember as we’ve always ended up moving due to finances previously, followed by a short period of stability and now this, AGAIN.

I need to count my blessings that we can afford our own home of any size and get a grip, I know. We are blimmen lucky but today I feel sorry for myself and sad to say goodbye to what I thought was our forever home.

You in need to give them a monthly clothing allowance and tell them that’s all they get.you still pay for school uniform.

they will fight and stomp the first few times you say no. But eventually they’ll work out that they need to budget the clothing allowance to get the things they want.

My eldest gets £10’a month. It’s not enough for fancy clothes, so it makes her really stop and think, and look for bargains. It’s also teaching her to save up for a while.

You don’t need coffee. It should be a treat you only get if you have a free voucher (eg on Octopus). Otherwise, make it at work or at home.

You also don’t necessarily need TV. Depends on your family. We only get TV when we get an ‘X months free’ deal on Prime/Disney etc. it doesn’t affect us.

Set mobile contracts as cheaper as possible. Drop data allowances and make sure to use WIFI.

Grow veggies if you have the garden for it.

Walk/cycle in preference to driving.

Don’t do paid for days out - set a challenge for a year.

There are loads of ways you’ll be able to cut costs. Do them in preference to moving.

Sounds really tough. I am also in the ride it out if you possibly can camp. Have you sat down and looked REALLY looked at every penny that leaves your accounts? I’m a pen and paper person but you need to somehow list everything that you pay for over a month then think about the bills that only come every month, quarter and year. Agree that MSE could be really useful for you.

Do the kids really need dance classes? How often do you pay for haircuts could this be stretched out by a couple of weeks? When did you last change insurers so you are not being penalised for your loyalty with higher premiums?

How old is your eldest and do you always say yes when they ask for money for clothes? Could you agree an allowance instead and when the money is gone it’s gone teach them about budgeting too?

On the flipside total up the costs of moving. Stamp duty, legal fees, moving costs, new furniture and curtains/blinds etc if what you have currently is unlikely to fit.

I would have killed for a clothing allowance when I was a kid! I got what mum bought and whinged :)

But, back to the serious business. Look at regulars with a fine toothed comb. My coffee machine manufactuer wants me to pay £60 a year for quarterly water filters. Hold on, we're not in a hard water area, I've got a Brita - so, no. It'll be 65, 70, 80, 90 a year for quarterly filters - by the time the machine's knackered (5 years) By which time I will have paid for the machine twice.

My water filter starts blinking at me after three weeks, but all I want is to not taste pure tap water. I can taste as soon as it's going funny, THAT'S when I change it. So instead of £6 every 3 weeks it'll probs be £6 for 12 weeks.

Fabric conditioner is an utter waste of time. Look at soap nuts!

Apple and other computer backups. Well, I'll delete a thousands and thousands of pics I'll never look and plonk precious ones on a hard drive.

Kindle books. Isn't it something like £8.99 a month for 2 books only? I've looked at those books, most of them are absolute crap. I've got an online account with my library, BorrowBox, and Pressreader for free newspapers and magazines.

Years ago you'd get a CD Rom for home finance management software which you legitimately now cannot buy, but now you have to pay someone £5 a month for an app - and - whilst I'll concede that it's probably worth it for complicated finances and different strands of investments, pensions etc, for just the two of us, my receipts get bunged in a monthly plastic wallet and if we're feeling poor at the end of the month, I'll rifle through them and say "well, we spent £100 on chocolate 'treats' and wine because we were feeling miserable, we should have just gone out for some countryside drives."

It's getting to the stage where companies can't get funding unless they have a subscription/more money in the future model. Take, for example, fairy liquid, who are now flogging a PRE WASH washing up liquid.

Get outta town. You boil the kettle, it soaks for 20 minutes, you scrape the crap off, and you don't waste £4 a month or whatever on such utter, utter nonsense. Or crap that goes in your washing machine that KILLS ALL THE GERMS. You what? Personally, I don't make a habit of sucking my bedsheets after I've washed them at 30 degrees.

They can and will take ALL your disposable income unless you scrutinise and rationalise the living daylights out of every single penny you spend.

I suspect that you want the nice big house with the lifestyle that goes with it but at the moment you can only really have one or the other.

So what’s it to be? Lovely family house with a simpler life but free days out and potentially more work to fund it or smaller house with more spending and Costa coffees? I suspect now that you are there it would make sense to hang onto the house. You have a figure in your head of what the house will sell for but it’s no guarantee and you might have even less money to put down on another house than you think. Lots of other people are in the same boat. I don’t think that there is a lot of money sloshing around at the moment.

My husband's industry was hit hard during the pandemic, and mine was too - his still hasn’t fully recovered. We ended up using all our savings just to get through it. Our mortgage has more than doubled, and our council tax is high. Downsizing has always been part of the plan once the children are grown, but due to circumstances changing we thought we’d have to do it sooner rather than later— suddenly I felt really sad about it as I raised my children here and it holds a lot of memories.
However, last year, we received an inheritance, which means we can now pay off the mortgage — so it looks like we won’t need to sell. That said, the idea of downsizing and reducing the bills still has its appeal.

I wouldn’t do it unless I’d exhausted all options.
Go through your finances and see what you can cancel.
Even having Amazon/Netfix/Disney/Spotify can add up to over £50. It sounds like a small amount but it does make a difference.

Can you wait until DC are in secondary school so they can move with their friends and then downsize to an area with a poor reputation school as you can then get much more house for your money.

For decluttering only brands make a decent amount of money selling at the moment.

I live in my dream home (chocolate box thatch which we have renovated)- have to leave it soon due to divorce. Currently live in the most desirable spot in the county, which is also highly desirable itself. I will likely end up in a new build box in town or a 1970’s house in a busy village and that’s if I can afford anything in the area at all.

I’m not that sad about the marriage compared to the grief I feel about the house. I will never be able to grade up again (too near retirement for that) so that’s it. Had the dream and lost it in just 3 years. Absolutely gutted.

I hear you @lalavander

i'm going to go against the grain and advocate for moving.

I moved last year to make it more affordable to have a baby and it was the best thing I did.

Make sure you're not buying anything which needs a tonne of work doing. You have alot of equity to afford everything else.

If your gut tells you it would make you happier and less stressed, I would do it. Life is too short to live for a house.

What hours does your husband work? Could you look for an evening job to avoid childcare costs?

We had to sell our large family home many years ago due to our business faltering during a recession. Different scenario in that we'd fallen behind with our mortgage payments, and had acrued significant credit card debt, so it wasn't a case of making economies, we had no choice really.

It was awful at the time, but we had a decent amount of equity and bought a perfectly ok house, although I know some friends/family raised their eyebrows when we told them our new address. It was the relative comedown that surprised everyone - big house in the countryside with stables and 2 acres, to a very ordinary house on a new development. The children weren't happy but had to lump it basically. They were at private school and the move meant we could afford for them to stay there. DH was the biggest issue - his ego was very bruised. I was the one who had to remain practical and unemotional and just get us all through it. Once we'd moved, and the pressure was off, life was great. Financially we were comfortable and could afford to give the children lots of lovely experiences, be it hobbies, trips out or holidays. It also taught them an important lesson in how to face challenges and pull together as a family.

I occasionally take a detour past the old place if I'm over that way, and can honestly say I don't miss it. I just associate it with stress, uncertainty and upheaval. It's just bricks and mortar at the end of the day.

We downsized 3 years ago a similar situation the house was beautiful 4-5 bed and we moved to a tiny thatch cottage in a different location and I couldn’t be happier, the stress of not having enough just evaporated the day we moved, the running costs, cleaning, stuff all minimised. My kids teens weren’t overly impressed but they love it too now.

with your oldest dc wanting clothes: Vinted is your friend. My dd is 14 and about size 4-6 and almost everything she owns (except undies and footwear) is from Vinted. Kids and YA clothes often don’t really wear out so despite the occasional blip, most of what we buy is half the price of the shops. I bought dd a pair of jeans in a shop with her as a birthday treat and she almost refused because it seemed so expensive!

Also a budget for hair and beauty products is a must if you have a preteen or teenaged girl.

Lastly - coffee and cake a few times a month can be a lot. Take a flask and go for a walk in a natural area with friends

You mention cost of childcare. Is that a big one? If it is I'd seriously look at what you can do to ride it out knowing that there is a fixed point where things will change for the better. The key is bringing down fixed costs like mortgage and fixed bills then choosing what you prioritise on variable costs.

Some suggestions:
Stretch your mortgage. If you have cash you can (and should) overpay but it's one less fixed cost.
Look at whether you can drop a car and cycle or walk more. A cheap car costs about £100 a month across depreciation, tax, insurance but you're probably looking at 4x that minimum.
If coffee is a problem, buy a decent coffee machine and a travel mug. Assuming a 5 year depreciation a £400 machine costs you about £20 a month including quarterly descaler and a monthly bag of beans. The 20 coffees that would make would cost you about £80 a month. Do this for your other fripperies and the savings mount up.
One subscription at a time. Do the cheap trial for each and roll through them.
Be flexible holidays. Holiday pirates is a great site for interesting deals but there are others out there. If you have a planned destination use Google flights to track cheap fares. You can save thousands doing this (my record is over £2k on one flight).
Look into points. Amex do free intro offers but there's also places like topcashback and Quidco. Put essential spends on them and save the cashback or points for fun spends.

Sorry if this has already been said but can you go interest only on all or part of the mortgage? We are doing that and plan to sell and downsize before the mortgage period ends as our way to repay the balance.

I downsized from a 4 bed detached to a 2 bed end of terrace after a divorce. It was a relief not having to worry about money as we now live comfortably without any debt except a small mortgage. My son is going to university and I can easily support his living costs. However, I am ready to upsize as would love more room (1000 square feet), but will miss how quick it is to clean this house. It was miserable in a bigger house, with debt and no spare cash though.

different circumstances but we are in the process of doing just this. Can afford the mortgage but it would only take one financial element to change it would be very tricky for us. Also want to have a life outside of saving for the end of a mortgage fix etc. I understand why people say stay at all costs but I just decided I don’t want spend the next twenty years “surviving” I want to enjoy life and not have to worry all the time.

I can relate to this in a lot of ways. We sold the large four bed family home which was full of stuff during a divorce, I’m now in a very lovely but tiny terraced house, I sold a lot of stuff on eBay and if I’m honest, it’s kept me afloat, I’m talking about £400 worth of old clothes in six months, which really helped. I had to be ruthless and binned a lot of stuff or sent it to charity, and actually, I’m feeling a lot better for not having quite so many things around me. I’m currently ebayaing old furniture with some success.

Start a declutter now, start selling things you don’t want or need anymore, it’ll help prop you up, maybe make a rule to use the money to pay off a bit of the mortgage each month, it’ll soon add up. I’d try and keep the house if you can, but focus on paying the mortgage off, which is doable.

I have four small income streams, I’m a single parent and not one stream would be enough to live on, and with the four that I have, it’s just about enough for now. Be creative with what you do and how you can earn money. Good luck!

Throw everything at it. I know it’s hard but realistically after all the fees and all the stuff involved in moving etc is it really worth it? Can you get another job?

I hear you OP. We are 'ok' but feel we'd like to have to strive less every month to drag in the money required just to stand still. We're looking at downsizing but its very depressing how far you have to go down to actually move the needle!

I would extend your mortgage. It will make a big difference to monthly outgoings. You can always shorten the term again once work picks up and rates come down. I think this is a temporary stress and I would ride it out.

I would sell in your position. This isn’t a short term hardship, you don’t really know when your finances will change and the COL could get higher depending on political climate.
Even if it is your dream home, no holidays, not even allowing yourself a take away coffee, worrying about unexpected bills, no money for anything ‘nice’ isn’t really a dream life. Feels very capitalist nightmare like, just earning enough to pay bills.
Memories aren’t related to houses, memories are people. When I look back I can’t remember if the houses of my childhood were council or owned, big or small, I can’t remember if there was one toilet or twelve, but I remember the people in them.
I’m having to downsize due to relationship breakdown but I’m not that sad, perhaps a different circumstance, but I know that the kids and I will laugh and dance and play in another smaller house. It really is the love that makes a home.

You could get an aupair over school holidays for childcare

This is so true, we always kept our mortgage as low as possible. This allowed us to enjoy life and make amazing memories, something my children are grateful for now my husband has passed.