Living In Less:Smaller home = Larger life

October 30th, 2007 categories: Mortgages & Finance

Nearly ten years ago, I had a conversation about money with a good friend of mine, Ann. Wiser than me in many ways, she told me that when she and her husband bought their house, they took out a 15-year mortgage and bought a house smaller than what they could afford so they could pay it off faster. I distinctly remember this conversation because I gave her a hard time about it. I didn’t understand how someone would actually choose to live in a smaller, less expensive house if the bank was ready to give them the money!

I was in full consumption mode at the time, enjoying “easy” money as a full-time employee and never seeing the end of the hamster wheel I had just jumped in. Earn just enough money to spend it all on housing I couldn’t really afford and then keep doing it again and again, never saving enough to be able to make a difference. I was trapped by a job because I needed the income to pay for the house.

Then, I read books like The Total Money Makeover, The Millionaire Next Door, Rich Dad/Poor Dad, the Automatic Millionaire, and many others. I re-thought the life I was building and eventually, I created a plan to downsize my current living space so I could live my life on my own terms, save more money and be able to live comfortably.

Just recently, I put my house on the market and moved to a house with 500 less square feet in a less expensive town. Essentially, I lost a bedroom (that my three dogs shared!), a first-floor laundry room and some square footage via smaller rooms. Although I lost some space, there are many advantages to this downsize:

I donated $100s in clothing to Goodwill because my clothes won’t fit in my closet. Other families will benefit from my lack of space.
I will save money on heating, cooling and electric costs.
I will save money on mortgage costs - interest over the life of the loan will be less.
I will save money on taxes.
I will save money on repairs and updates.
- Since I moved to a less expensive town, I have to spend less on upgrades to the house because people don’t expect it in this town. Pricey upgrades like granite countertops would be a waste of money. Plus, in my new neighborhood, I don’t have to play “Keep up with the Joneses.”
My husband and I will be able to buy a car with CASH! Used, of course. This will save us money on interest.
I will be able to invest money in building my business and maybe buy additional investment properties.
I will be able to donate more money to charitable causes.
Annoying relatives can’t stay over because I don’t have a guest room! Just kidding, annoying relatives.
I do not have to work a 60-hour week to afford my house.
I will save money on credit card interest I don’t have to pay anymore because I no longer live outside my means.
I can vacation more often.

The benefits to me, my family and my community will be monumental - just by making one change.

And, I don’t feel weird. In Learning to Love the Not-So-Big House, the writer points to some other people who have down-sized their lives. The article also lists some other advantages to smaller homes including the fact that it is less expensive to furnish a large house and that more things can go wrong with a large house.

Here are other articles on this topic:

For many homeowners, less is so much more - see how much more space Americans take up

Downsize Me! Shrinking the McMansion Diet

Downsize Your Home to Downsize Your Expenses

Incredible Shrinking Houses