Recession is something that may happen in your lifetime or, if lucky, never. However, the recession has a knack for choosing the most unexpected time to strike just when you thought you had it all made up.
The smart and the resilient live to tell about it because they made the right decisions at the right time or that they were strong enough to outlive it. Here are a few tips to help you survive through the recession.
Downsize to cut monthly housing costs
Mortgage, homeowners insurance, housing warranty, HOA, and property taxes can eat a substantial portion of your paycheck. If these costs are 30% or more of your gross income, you run the risk of being cost-burdened. Do not let this happen and instead call in Three Men And A Truck, who are professional apartment movers to help you move to a smaller house with manageable costs.
Meanwhile, you can sell the current house to settle any outstanding mortgage and take a lower one on the smaller house. This creates a win-win situation where you are still a homeowner but less burdened.
Free up equity
One way to adjust to recession pressures is to reorganize your finances and liabilities to strike a balance favorable to your situation. In good times, you may have taken up a big home for the family and have paid a substantial part of the mortgage. To help you manage the recession, consider freeing up your equity to start on a stronger financial footing.
You may sell your current home to recoup your equity less whatever may be owing to lenders and use this to purchase a smaller house outright without debt. You still have a home but now without monthly mortgage obligations.
Lower energy costs
A larger house will take a lot of energy for cooling in summer and heating in winter, accounting for nearly half of energy use in a home. Moving to a smaller house and scaling down this percentage can make huge savings and free cash for other uses.
Bigger homes require more lights that are also a drain on your energy bills. Leaving a four-bedroom stand-alone suburban home to a two-bedroom apartment or condominium may save quite a tidy sum in utility bills and help to stabilize your finances during the recession period.
Declutter for efficiency
Certain items in the house are only necessary because there is room, or that the neighborhood demands them as some sort of social status symbols. The later includes large swimming pools that you probably only use occasionally but must still pay running costs. You will cut such luxury out when moving to a small unit and save in the process
Washers and dryers are equally heavy energy consumers and moving to a small apartment with less room will force you to discard it. You may find that using a public Laundromat is cheaper and still just as good.
Make money as you downsize
You can opt for a minimalist lifestyle in your new smaller home and find no need to carry along the old items from the old house. This can make you some extra money by selling off items such as washers, dryers, HVAC units, furniture, and electronics.
Carefully sort through your items and set aside those you want to sell. Create a catalog with pricing for each item before conducting a garage sale, by private treaty, or online so that you can use the proceeds to buy what you need in the new home. It calls for smart thinking and quick decisions to survive the recession.