Smaller Can Be Better- Maximize Your Savings With A Small House
Hi, I’m Ariel, Michelle’s sister-in-law and editor. I’ve been editing and learning from Michelle’s blog for over two years now, and if you’ve read any of the posts I’ve written for Michelle, you know I’m conscious about my savings and spending. I have a degree in English Literature, and I make a living as an editor, preschool teacher, and knitting instructor.
My husband and I were recently faced with the reality that we would have to find a new house and move. I’m not going to spend too much time on specifics, but it has to do with a retail development going smack dab on top of us.
We were only 19 and 20 years old when we bought our house and had very limited buying power. With what felt like nonexistent options, we fell in love the minute we walked into our little 900 sq ft. brick bungalow. It was the dreamhouse we never knew we wanted, and we were pretty certain we would never leave.
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Well, 15 years later and our family has expanded – we now have three kids, two dogs, two cats, a snake, and some fish. That probably sounds pretty chaotic for the size of our house, which was the average house size in the 1950’s, but it actually fits us really well.
Now that we are moving, we have had to start thinking about what we want in our next, and hopefully forever, home. We are now in a much better financial situation – our house is paid off, we have an established emergency fund and savings, we have excellent credit scores, and no credit card debt. Actually, a lot of those financial milestones were reached because we live in a smaller home and aren’t maxing out our income.
We’ve been looking for several months, and we did entertain the idea of buying something twice as large and maxing out our budget. Thinking about stretching out in that extra space was really, really exciting. Even though we make 900 sq ft. work, I will admit that it occasionally feels cramped.
But then, the summer came. My husband is a teacher and off for the summer, and I have several jobs that allow me to choose my schedule and work remotely. We spent most of our summer traveling or outside with friends, and it felt so good. That was the stretching out we really needed. It sort of hit us that this is the lifestyle we want, not one that is stifled by an extra large mortgage, even if it is within our budget.
Living in a smaller than average house makes some cringe. There are definitely trade-offs, but I strongly believe those trade-offs are worth it.
Find a lifestyle that works for you.
Before I go on about why we are choosing to buy another smaller than average house, I want to impress upon you something you probably already know. Buying a home is a huge financial decision, maybe the biggest one you will ever make, and it will directly impact your finances for the rest of your life.
Like I’ve already said, we had an epiphany this summer when we realized that rather than buying a home that would max out our budget, we would rather relax, travel, and save more money. We’ve also built a life in a smaller house that allows us to accommodate those luxuries. Yes, there are lots of ways to increase your income and have the kind of lifestyle I’m talking about, even if you buy an average or larger than average home. Buying a smaller house doesn’t mean we going to stop finding new ways to grow our income, it just means we are making the decision to start on more stable ground.
In addition to the immediate and obvious savings that come with a smaller home, we are choosing a lifestyle that reflects our personal values, and it’s okay if we have different ones. Some people may dream of a big, old farmhouse. Some people may want a ultra-modern condo in the city. But, if you are looking for ways to maximize your savings, downsize a little, or are just considering staying in something smaller than average, I hope our experience in a smaller home will inspire you to stay in something small or to downsize.
How to make living in a small house work and why you should try it:
This isn’t a post about tiny houses, and I don’t think the size of our current house actually qualifies as one. Rather, this is about living in something that is below the current, average home size.
Like I said, our 900 sq ft. home was about the average several decades ago, and in the 60+ years since our house was built, home sizes have grown exponentially. Currently, new homes average 2600 sq ft. according to the U.S. Census Bureau.
Also, looking at current home building trends, almost half of the new homes built in the U.S. had four or more bedrooms. If you consider that most families average 2-3 children (according to the Pew Research Center), this means new homes likely have one bedroom for each child, possibly extra bedrooms.
But, what about the children?
Okay, so we have three kids in a three bedroom house, which means two of them share a bedroom. Yeah, it can be tense at times, but really, they don’t just live in their shared room.
I would never criticize someone for wanting individual bedrooms for each of their kids and maybe even an extra one for guests. But, I will tell you that having your kids share a room isn’t terrible. When you think about what a bedroom is, it’s essentially where you sleep. Sure, it is nice if it can fit all of your kid’s belongings, but that’s still possible when they’re sharing a bedroom.
Plus, and this is one of the bittersweet things about kids and their bedrooms, they aren’t going to live at home forever. The goal is to raise kids that can move out of their childhood home. As they get older, they are spending less time at home and more time in school, with friends, and in extracurriculars. This is really when their room becomes just a space to store their stuff and sleep. Now that we have a teenager, I can definitely attest to that.
More space, more stuff.
When were looking at those larger homes, my first thought was, “ohmigod we’re going to need more furniture.” One home that we seriously considered had three living room type spaces, whereas we currently have just a living room and TV room. Yes, it was exciting to imagine filling those spaces with new stuff, but then I started thinking about the cost of it all.
Having an extra room doesn’t mean you have to fill it with furniture, but it’s really hard not to. I think it’s pretty natural to use and fill the empty spaces around us, and that comes at a cost. Even if you purchase your furniture second hand, those costs add up, and eventually you will have to replace something, which can add even more financial strain.
With so many kids and pets, we have a joke in our house that we can’t have nice things, but that’s the reality when thinking about buying new furniture.
Organization, not minimalism.
We have a lot of stuff, a lot. Our house is often carpeted in Legos, I have an out of control shoe and yarn habit, and my husband collects mopeds and scooters. Having a small house doesn’t mean a minimalist lifestyle. I mean, if you adhere to that mindset, that’s awesome. But, I wouldn’t label myself one at all, clearly.
I’m not just collecting clutter as I go – I downsize as needed and consider each purchase I make. But, the real key to making a small house work, without the minimalist lifestyle, is good organizational skills. This means putting things away when you’re finished with them, making sure everything has a dedicated space, and finding creative storage solutions that work for you.
One of the best ways to make a small house work is to see what your limits are to the stuff you can have. If you don’t have space for something, don’t buy it. Or, see if there’s anything you aren’t using and get rid of it.
If you are struggling to organize your space, spend the afternoon at Ikea. I often go for inspiration on how to organize our things in a way that makes our smaller space more manageable. Bookshelves with baskets or bins is a great way to keep clutter off of the floor while still being accessible.
Savings abound in a smaller home.
As we began looking at homes, especially the larger ones, we also started considering the cost beyond the mortgage, which are the utilities. It’s pretty simple, the larger your house, the more you are going to pay to heat, cool, and provide electricity and water.
Beyond basic utilities, there are lots of other unforeseen costs of homeownership. A larger house likely has a larger roof, and there is more surface area on the outside and inside. More space means everything costs more. I know this isn’t news, but the cost of new floors, a new roof, countertops, even painting your walls is all determined by square footage. Even if you think bigger is better, it also means bigger is just going to cost more.
This could mean the difference in actually making the updates you want or need to make. It can also determine the quality of materials you are able to use. Even though I’m big on saving with a smaller house, I’m all for paying a little extra for better quality. Higher quality materials likely means you won’t have to make repairs or replace things as soon as you would with lower quality materials and workmanship.
It’s hard to ignore the importance of environmental stewardship. It isn’t just the news that reminds us that humans are sucking the earth of its resources – it seems like everything we buy speaks to how environmentally friendly it is.
Like I said, in a smaller home you save on utilities, and I know this is obvious, but that’s because you are using less. You can have solar panels, rain barrels, and low usage appliances, but for most homeowners, it is incredibly difficult to have a zero energy home.
And, if you have a smaller home, it costs even less to get closer to zero energy use. Just like the cost of a new roof being determined by size, the cost of making a more environmentally friendly home has a lot to do with size. Several years ago, we made some updates to our home that made it more efficient, and those updates were less costly because we had a smaller house. This meant we gained even more savings overall.
Basements don’t have to be off limits.
For homeowners with basements, this part of your home is usually thought of as the dark space below the rest of your house. It’s where you store boxes of holiday decorations, out of season clothes, etc. If you are only using your basement for storage, you are sitting on top of underutilized space.
Our basement is partially finished, with a TV room, a bedroom, studio space, a laundry room and storage area. By using it, we are actually doubling the useable square footage of our home.
There are lots of things you can do to make your basement more habitable, and one of the most obvious is refinishing. That can be a costly home improvement, but there are smaller, more affordable things you can do in the meantime, such as French drains to reroute water, adding some electrical outlets, and painting unfinished walls and floors. Area rugs or carpet squares can give it a more comfortable feel, as well as curtains.
When you are ready to make larger improvements, Pinterest is a great place to look for inspiration. There are things like recessed lighting, egress windows, and built-in bookshelves that will transform your basement from a cold storage area to a functional and comfortable living space.
Are you thinking about trying a smaller house?
If you are at all considering a smaller than average house, especially if it means downsizing, you likely have some concerns. The biggest being, how can I make everything fit?
To really get serious about finding out whether a smaller house will work for you, there are a few ways you can start. Let’s start with your living spaces. Say you have two or three shared use spaces, like a living room, TV room, and/or family room, walk through those rooms and really think about how and when you use them. Ask yourself what you aren’t using and how you can organize the spaces to combine them.
Once you realize that you could probably combine some spaces, actually begin to get rid of things and work to combine those spaces. Is that working for you? If so, you might want to really consider trying a smaller home as your next home purchase.
What’s really next for us.
I can’t say for certain that our next house will also be 900 sq ft, but I do know that finding something close to that size is a priority.
After buying your first home and living in it for awhile, you find things you have to have and others you don’t need. We’d love an extra bathroom, but we can always put one in the basement. We also need a garage, and we’d love a yard as big as our current one.
Really, thinking about buying a home means you have to consider the space and what you gain from it. For us, the savings we accrue with a smaller than average home more than makes up for square footage.
How are you using your home to its fullest potential? Would you ever consider downsizing?
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