Home Downsizing 101

Downsizing to a townhome is a popular solution for people wanting to streamline their lives. See more real estate pictures.

It's a tough time to not be a millionaire.

Most of us are feeling the economic squeeze to some extent and are looking to cut costs. To reduce monthly expenses, the most logical place to start is with the most significant one, and for the majority of people, that's housing. Cutting back even a little on your home costs can save a serious chunk of cash.

There's more than one way to reduce housing costs. You could improve your home's energy efficiency, or refinance your mortgage, or start doing your own landscaping. But arguably the most effective one is to downsize. That means selling your big old honker of a home and buying something smaller.

"Honker" is relative, of course. Downsizing could mean moving from a 10,000-square-foot mansion to a 2,000-square-foot house, or from a 1,500-square foot condo to a 200-square-foot "tiny home." Either way, it's a big change in cash outflow.

But downsizing isn't all about money. There are other good reasons to go small, and there are a lot of factors to take into consideration before moving into a smaller home. Here, 10 questions to ask yourself before sizing down.

First and foremost: Why bother?