House Sizes: Is Bigger Really Better?
by Kimberly Danger
Make the Best of What You Have
Small House, Happy Home
Need a Bigger Home
Your home is probably the biggest purchase you will make in your lifetime. It's your castle, your refuge, the place where family memories are created. It is also your biggest expense.
In the past 50 years, house sizes in the United States of America have doubled, while the size of the average family has gone down. Do we actually need these bigger houses or "McMansions" as they're often called? Are we buying them simply to "Keep up with the Joneses?" Can they actually prevent us from living richer, fuller lives?
Of all the financial mistakes I see and hear about the most; overextending on a mortgage is probably the biggest one. Banks, being in the business of selling loans, will generally approve homebuyers for the maximum loan that isn't a huge risk to the bank itself. This isn't always in the homebuyer's best interest. If families aren't careful about advocating for their own financial well-being, they can end up in over their heads.
Nobody wants to be a slave to their home, but sometimes that's what happens. Huge monthly payments that you can barely afford often mean there's nothing extra left over to allow you to live your life. Instead, you end up living for your house.
If you're thinking about trading up, consider these things:
When considering housing expenses, many people just look at the basics, like the mortgage itself and property taxes. When you're in a smaller home, not only do you have a lower mortgage payment, but also you typically have lower utility bills, lower insurance costs, and fewer expenses related to upkeep and maintenance.
When a smaller portion of your income is allocated to your mortgage, you're free to spend more on other things. Imagine what having a few hundred (or thousand) bucks left over at the end of the month. You'd probably be able to do a few more of the things you've been wanting to do, including vacations, eating out, saving more for retirement, or increasing your charitable donations.
Less is More
With a smaller house, you may be able to afford more of the upgrades you've been dreaming about for your home. The extra plush carpeting doesn't cost as much when you're covering fewer square feet. The granite countertops are much more affordable when you have money left over after paying your mortgage. You can live the "good life" on a smaller, less expensive scale.
How much time do you spend cleaning and maintaining your house right now? Do you enjoy it? The bigger the house, the more there is to maintain, and the more time it takes (unless, of course, you have a housekeeper, handyman or groundskeeper). That is time away from your family, your friends, and your hobbies.
Is the big house really all it's cracked up to be? Maybe, if you have considered every aspect involved and can afford it. But then again, maybe not. You may come to the conclusion that where you are living now isn't quite so bad. Or, you may even decide to purchase a smaller house next time around.
Kimberly Danger is the owner and publisher of Mommysavers.com, a site for moms living well for less. Portions of this article first appeared in her blog, Forget the Joneses, which also appears on her website at mommysavers.com
Take the Next Step:
- Make sure you're not overpaying on your mortgage. If you haven't looked for a lower mortgage rate in the past year, use our simple tool that compares different lenders to see what your monthly mortgage payment could be. It's private, only takes a minute and could show you how to save thousands!
- Make a list of the pluses and minuses of a bigger home.
- Read more about how much house is right for your family
- Dont be in denial. If you feel that your job maybe at risk, have a contingency plan.
- Take action today, so you will be better off tomorrow. For instance: find a new job, get additional training, and get out of debt.
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Share your thoughts about this article with the editor.
More Money-Saving Tips for Your Home
- Should I use a HELOC for home remodeling and repairs?
- Find the best mortgage rates in your area
- 3 ways to use a mortgage calculator
- Mortgage calculator: Calculate your payment and more
- Home equity calculator: HELOC vs. line of credit
- How much can additional payments save me on my mortgage?
- Who offers the most home insurance discounts?