9 Benefits of Living in a Smaller Home
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My family currently lives in a 3,362 square feet home with 5-6 bedrooms and 2.5 baths.
The 5 or 6 bedrooms depends on who you talk to and what is truly considered a bedroom. But regardless of how many bedrooms we have, our house is just way more than what we need.
I have estimated that we rarely use 1,000 square feet of it now … even with 3 children living at home. We could easily manage living in a home that was 2,100 to 2,400 square feet.
For the past year, my wife and I have been talking and planning our next move. This time, our goal is to downsize into a smaller, more efficient home.
Our oldest son is now in high school, so within the next 4 to 5 years … it is likely we will need even less space than that 2,400 square foot home.
By planning out how to downsize our home in the next 5 years, we have realized several benefits of living in a smaller home. Some are financial while other benefits have more emotional characteristics.
Before we get into the benefits of a smaller home, let’s take a look at what we are spending (per year) to live in our current home.
How Much Does Our Current Home Cost per Year?
Looking at our numbers from last year, we spent $22,639.17 on housing costs in 2017.
Here is a quick breakdown of our total housing costs –
- Mortgage = $13,197.05
- Property Taxes = $3,894.12
- Utilities = $2,585.96
- General Maintenance = $1,820.01
- Homeowners Insurance = $970.00
- HOA Due’s = $172.00
2017 Total Housing Expenses = $22,639.17
And after 9 months this year (2018), I can estimate our housing costs will be within 1% to 3% +/- for the year compared to 2017.
2018 Estimated Total Housing Expenses = $22,300
For the most part, our annual housing expenses have been very predictable it seems lately. Once we finish the year, I will provide our final numbers and see how they compare to last year.
What Percentage Do We Spend on Housing?
On an average year … I estimate we spend around $60,000 on our lifestyle.
This “back of the envelope” calculation is just a baseline to work from. Most years we spend closer to $58,000, but I like to round up to $60K to give us a little wiggle room.
This estimate includes everything we spend money on like – housing, transportation, food, vacations, entertainment, our children, etc.
Using the $60,000 annual spending estimate … it helps us analyze what we may need one day to live on as we work to become financially independent.
It also lets us calculate where most of our money is being spent and where we can make improvements.
Like most Americans … our biggest two category expenses are housing and transportation. And these are the areas for the most improvement in our budget.
Based on our simple calculation, we are estimated to spend 37.2% of our annual budget on housing alone.
% of Housing Expenses = $22,300 / $60,000 = 37.2%
Add on top of that another 21% for transportation … and we are close to 60% of our overall spending!
So as you can tell, there are plenty of areas for improvement in our housing and transportation spending.
One opportunity to lower our overall housing costs is to downsize to a smaller home, which could offer tons of benefits.
Benefits of Living in a Smaller Home
Depending on several factors, selling our current home and buying a much smaller home (1,000 square foot less) could save us lots of money.
Of course, we could buy a smaller home in a more expensive zip code … which means higher taxes and price of the home. So saving money is possible … but not guaranteed.
Besides saving money, downsizing to a smaller home has many other benefits too.
9 Awesome Benefits of Small Home Living
We have lived in our current 3,300+ square foot home for the past 10+ years. At the time we bought it, we thought we were getting a great deal.
And while we haven’t lost a ton of value on our home … we certainly haven’t been optimizing our housing expenses.
Downsizing to a smaller home could potentially save us more money. And it could provide a lot of other benefits as well, including the list below –
1. Less Maintenance – An obvious benefit of a smaller home is that it would likely come with much less maintenance and cleaning. Vacuuming or sweeping a 2,000 square foot home is just going to be quicker than doing the same thing in a 3,000 square foot home.
There would likely be less gutters to clean, walls to paint, floors to sweep …
2. Lower Utility Bills – In our situation, a smaller home doesn’t necessarily mean a lower mortgage or property taxes. We don’t mind spending the same on another house that is smaller in a better location. So our overall mortgage and taxes might not go down … and could even go up.
But one cost that I feel good about going down will be utility costs. A smaller home should be cheaper to cool in the summer and warm in the winter. We are not moving to a different state or climate … so we expect lower utility bills with a smaller home.
Bottom line is a smaller home should be more energy efficient.
3. Smaller Roof – Our house is 10 years old and we are starting to notice some problems with our roof. As we work with a contractor and our insurance company on possibly replacing our roof … I get a sick feeling at how much it could cost.
A new roof on our home could cost over $15,000 from some of the estimates I am hearing.
No doubt about it … a smaller home = less shingles to eventually replace and a ton cheaper.
There are just a lot less things to go wrong when you have less space … including replacing your roof.
4. Fewer Windows to Clean & Repair – Our current home has 29 windows. Just writing that in this post makes me want to run away and hide.
And guess what happens to all those windows as years go by. One by one … they all eventually start to deteriorate.
This has started to happen in our home that is 10 years old. Windows that face the afternoon sun are really starting to breakdown. If we were to stay in our home for another 10+ years, eventually they would need to be replaced.
A smaller home won’t need as many windows. And when the time comes to replace them … it is a little easier to think about paying to replace say 10 or 12 windows compared to 29!
Plus … try having 3 kids living in a house with 29 windows. Do you know how long it takes to keep them clean all the time?
And did I mention the cost and time involved in putting up window blinds or shades on 29 windows?
5. One Furnace Instead of Two – Our current home is too large for just one furnace … so we have two. And while that may not seem like a big deal … when it comes to maintaining them, it is a big pain.
It seems like every other year one of our furnaces has some sort of issue. Having two furnaces just makes everything more expensive.
And just for more added costs … we also have two air conditioners!
Bigger homes just need more things to keep them running – like furnaces and air conditioners. I have even seen a couple houses in our neighborhood with 3 air conditioning units!
6. More Family Time – Our family of 5 can often times get lost in our 3,300+ square foot home!
Of course I am exaggerating a bit, but often times the kids are hanging out in their own rooms for hours and hours by themselves. And my wife and I could be in separate rooms and not see each other (or the kids) for hours.
I like the idea of having a quiet space to go and relax in the house … but there is also something nice about having a smaller home and being closer to your family.
A smaller home can create the opportunity for more quality family time.
7. Environmental Impact – Not only should we have lower utility bills in a smaller home, but the environmental impact will be much less. This goes beyond any financial gains … as we won’t be using up as much of our planets limited resources.
Having a smaller home will help to cut out waste. And in this case that can be the fuel to heat our home and the energy to cool it.
Plus we won’t need as many materials to build or maintain our home like an extra furnace, air conditioner, wood, windows, drywall, plumbing materials, etc.
8. Less Clutter – A smaller house means less square feet and fewer rooms and storage. There won’t be the space to keep as much clutter in a smaller home.
This is one area that I look forward to the day we downsize. We can sell or donate a lot of things we have right now and even some of that clutter we just can’t seem to get rid of.
9. More Sleep and Less Stress – How many times have you laid awake in bed thinking about all the chores and work you need to do around your home? I have done this a bunch.
A bigger home has more responsibilities, more things to clean, more maintenance, just plain more work and probably more money.
On the other hand … a smaller home takes less time to vacuum, less things to fix, fewer windows to clean, probably one less furnace to worry about going out.
A smaller house is just less … which should lessen your stress and just maybe let you sleep at night.
Why You Should Buy a Smaller Home
There are so many benefits of owning a smaller home.
I have written many articles in the past about the cost of home ownership. Buying a home that is too big is even one of my top 10 financial mistakes.
A smaller home could save you a ton of money on your mortgage, taxes, utility bills, and maintenance.
Your home won’t need as many windows to fix, floors to sweep, shingles to replace, and furnaces to maintain.
There is also a huge environmental and emotional impact of buying a smaller home.
And the most important reason to own a smaller home … you will be less stressed about cleaning and all the chores you need to get done.
I believe your health is the most important investment you can make and managing your stress is a big factor in that.
What do you think about owning a smaller home? Are you looking to downsize like our family is planning on?