Think Big, Go Small: Downsizing With Minimal Sacrifice

Tracy Ruddell
by Tracy Ruddell May 8, 2015 / No Comments

Flickr: Mpopp

A few years ago, I thought I had it all – an enviable six-figure job, peer recognition for my work, my dream home in my dream neighbourhood and great family and friends – until I had to give it all up (except the family and friends, of course). Now, I realize that what I had wasn’t the perfect life; it was a gilded cage.

Having to downsize unexpectedly in the prime of life is hard but it doesn’t have to be tragic. In fact, it may just end up being the best thing that’s ever happened to you.

Downsizing Can be a Much-Needed Wake Up Call to Re-Think Your Priorities

Every once in a while, life throws a curveball at you that demands a big response. Sometimes it’s for positive reasons, like marriage, kids or a promotion. Other times, that curveball slams into you unexpectedly and you’re forced to make sacrifices.

I got hit with that dastardly ball a few years ago when I was diagnosed with a chronic illness. The good news is that it’s manageable, it isn’t going to kill me and what doesn’t kill you truly does make you stronger. The bad news is, I couldn’t stay the course through a high-pressure, 50+ hr work week while carrying and maintaining a large home on my own.

It was the biggest ego-reality-check of my life. I was the independent single lady. The golden child at work. The organizer in my social group. The doting aunt. The perfect hostess with the lovely home that was always in order. Yeah, I know. I kind of hate that girl now, too.

Suddenly, I had trouble finding the energy to make my bed in the morning, never mind writing a killer strategic plan, leading a team, giving a board presentation and then coming home to host a formal dinner party for a dozen of my closest friends. And frankly, those things didn’t hold the same value as they once did.

My illness wasn’t just something that was happening to me, I was changing in response to it – physically, financially, emotionally. And with that came the need to reassess my life. If I could no longer have it all, what were the things that mattered most to me that I needed to sustain? What were the deal-breakers, the things I couldn’t live without, and what things were, when it came right down to it, simply “nice-to-have’s”?

When you put your family, friends and health, above all else, it makes financial and material sacrifices that much easier to make.

Start By Reducing Your Biggest Expense: Your Home

I realized that I could no longer stay at my current job and perform at the level that both my employer and I were both accustomed to. Acknowledging that felt like I was losing a big part myself. It wasn’t just that my identity was wrapped up in what I did for a living (even more so than who I was), it was the inevitable domino effect of quitting that cushy job that was so scary.

When I walked away from my career (that I had spent eight years in university and trained abroad to secure), I could no longer lead a six-figure lifestyle; that meant that I also had to give up my dream home. It was heartbreaking because I had worked so hard for over a decade to save for it and spent months renovating the place (I had just completed work on my custom kitchen below).


I also knew that with the Toronto real estate market being as hot as it was, I couldn’t downsize within the same neighbourhood and I’d likely be priced out with no hopes of buying back in.

This was my suck-it-up-buttercup moment. I wanted (or rather, needed) to live a less stressful lifestyle. I wanted a work-from-home job with more flexible hours. I wanted to spend more time with family and friends, living life instead of working for it. Well, that almost always means less pay. So I ripped the band-aid off, put the house on the market, and began to look for viable alternatives for work and for real estate.

The job was surprisingly the easier of the two to transition. I started freelancing as a content writer and blogger and eventually joined a real estate company in a permanent writing position. So many of us stay in jobs that we’re not happy with for fear of not finding anything better. The jobs are out there if you have marketable skills and present yourself well. It may just take some time and patience.

For me, finding a home that I’d be happy in that would cost significantly less to carry was actually the more time-consuming of the two moves. It actually meant moving in with family for six months during the transition. But when downsizing your home, I will always advocate for buying versus renting, if you have the down payment to do so and if you qualify for a mortgage. Downsizing shouldn’t have to mean that you can’t continue to build equity or save for your future. In fact, those goals are even more important when cash flow is tight, as you may not be building up your investment portfolio in other ways.


If you live in an urban market like Toronto, one of the best downsizing options is a condo. There are so many condos for sale in Toronto that offer reasonable maintenance fees and a great lifestyle (one of my favourites is the Toy Factory Lofts, pictured above) so you don’t have to feel the sting of sacrificing square footage or going from a freehold to a condominium. is great website for comparing square footage costs and maintenance fees by building and by neighbourhood, as well as seeing what the average annual value appreciations are so that you make a wise investment. You can read more tips about downsizing to a condo on our blog.

For me, because I had a sizeable down payment (keeping monthlies in check was my priority), it made the most sense to look at houses for sale in Toronto with rental potential. I ended up scoring a great detached home, pictured below (I actually ended up with more square footage than I had before) with a basement apartment that covers half of my mortgage.


I did this by “sacrificing” on neighbourhood (I moved just to the edge of prime in a transitioning neighbourhood), buying a newer builder’s home (all that century character I had before came at a premium) and selecting a house without parking since I didn’t need it for myself. You can read more of my tips on how to buy in a hot Toronto real estate market here.

I was lucky that I had a healthy amount of equity in my home which meant that I had options when it came to my property search – not everyone can stay in a freehold house when hit with a financial crisis. You really have to do the math and plan your budget. A duplex, triplex or house with a basement apartment may be your best move if you have a decent down payment coupled with today’s low mortgage rates, providing the initial purchase price is right. Just make sure that you don’t leverage yourself too high or you risk facing the same issues down the road when mortgage rates go back up (as they inevitably will). And please, make sure that you can carry the house without rent if necessary. has a great online affordability calculator to test different scenarios.

Don’t Forget the Small Expenses – They Really Do Add Up

We all know that downsizing means reducing monthly expenses and not just the overall amount of your debt. And while this can often seem impossible to do, there are actually some easy ways to save money without effecting the quality of your life.

The simplest thing you can do is to save by lowering interest rates. Take a hard look at all of your loans and credit that come with high-interest charges (mortgage, credit cards, lines of credit, etc.) and do some competitive shopping. makes this process really easy.

I was quickly able to reduce my credit card interest rate from nearly 19% to less than 10%, and it was worth the penalty fees to break my current mortgage and lock-in at a lower rate. I opted for a fixed rate since my earnings are unlikely to change over the next few years and I wanted peace of mind above all else. But if you’re a little less risk-adverse, then a variable rate may be the best way to go from a savings standpoint.

I also got rid of cable and opted for unlimited internet with an alternative provider from the big guys. And I renegotiated my wireless package (most carriers will negotiate when pressed). None of the above impacted my life negatively in anyway, other than the bit of time it took to research and negotiate the deals.

I also kept small amounts of cash out in separate envelopes for things like taxis and take-out food (visually seeing what I was spending each week on conveniences helped me to cut back) and I put a hold on shopping for clothes and all non-essential personal items for one full year which helped me learn to live with what I have. My “sentence” is up but most of the good habits have stuck with me and I’m spending much less than I did several years ago.

Finally, I put a hold on vacations for three years. This last one was admittedly the hardest to implement (I’ve been longing for white sandy beaches through the harsh Canadian winters) but I’ve spent a lot more time visiting friends and family on weekends to get out of the city and that’s a great thing.

Life After Downsizing

Two years ago, I had to face some hard facts. I wanted to work less, have flexible hours and a less stressful job, so guess what? That meant less pay. And less pay meant that I couldn’t continue to carry the house I owned at time. In truth, that’s probably what kept me in that high-pay, high-stress career for so long. I had to make that salary to keep my home as I was leveraged way too high – and many Canadians are. That dream home really was my gilded cage.

Reducing expenses is obviously a big part of downsizing but, for me, downsizing wasn’t solely about controlling my finances. It was also about simplifying my life and realigning to the things that matter most. To do that, I had to determine what the biggest “withdrawals” were in my life. For me, the two things that were the most draining on my health and my bank account were my century-old, high-maintenance home and the emotional and physical toll of my job.

Yes, I had to take a substantial pay cut when I transitioned to a new career. Yes, I had to pick an up-and-coming neighbourhood to move to and sacrifice my basement space while taking on the responsibilities of being a landlord. But once I got my expenses (and my expectations) in check, the impact of these decisions has brought far more positive change than negative. I love my new neighbourhood, but even more, I love that I’m not constantly stressed out about money or worrying that one major home repair will push me back into debt.

I’m also working hard to further diversify my income – something that was barely on my radar in my old, rather naïve life – so if life throws another curveball my way, I won’t lose my home. For the first time in my adult life, I feel financially secure even though I’m earning 40% less than I was two years ago.

So many of us are leveraged way too high in Canada and the issue is only going to grow. If one of our cards gets pulled away, our entire house tumbles – yet downsizing is painted in such a negative light. Really, it’s the accumulation of too much debt that’s a bad thing.

Like many people in my situation, I didn’t have a choice in downsizing. I was forced to downsize and, honestly, I don’t know that I would’ve been brave enough to make the big changes had I not had a fire lit underneath me. But learning to live with less hasn’t been a negative experience. And besides, “less” is more subjective of a concept than people think. Anyone who takes a look at my new house, my new job and my lifestyle now would be hard pressed to say that it’s a downgrade in any way. In fact, for me, downsizing has been downright liberating.

If you’re faced with downsizing either out of necessity or because it’s a proactive decision to better manage your finances, don’t stress too much about what you’re giving up. Instead, focus on what you’re gaining. Your life will change and so will you, but those changes can lead to less stress (providing that you’re not in a bankruptcy situation), more time with family and friends, and a more positive outlook on life. In many cases, downsizing really can lead to an upsized life.