The average American home has nearly tripled in size over the past 50 years, and the average Canadian home has almost doubled. Homes may be getting bigger, but families are getting smaller. Something is not adding up.
Everyone wants a big fancy home they can proudly show off to their friends, but after the big purchase, many people realize the downsides of owning a big house/apartment.
Here are a few reasons I think people buy big homes:
1. A badge of honor – having a large home can be impressive to some people
2. Showing success – people associate success and wealth with having a big house
3. Pursuit of happiness – thinking that owning a large home will bring happiness to the owner
4. More is better mentality – a bigger home will mean more happiness, freedom, recognition, storage…
5. Big home is an investment – more space = better value
Ego shouldn’t be the key driver to buying anything, especially not something as important as buying a home. Here are 5 reasons why I think bigger is not always better.
It’s not just the mortgage that gets more expensive once you decide to buy a bigger home. All other expenses also get elevated:
Just try talking to someone who already has a big home, and you will soon realize that going big is going to cost you much more in the long run than just the mortgage. Having a small(er) home will save you a lot of money that you can use for other things – things that truly matter (spending more time with family and friends, traveling, saving and investing, working less because there will be less to maintain, etc.)
With a higher price, higher insurance and taxes, higher bills, and higher maintenance costs, there will be less money left at the end of the month to invest in more important things. Having a bigger home will take more of your income, therefore leaving you with less to invest, save, travel, enjoy life, etc. By not having any spare money left, you’re limiting your options, and corroding your financial stability and flexibility.
You will also have less time for activities you enjoy doing due to the need to work more to afford a bigger home. There will be more cleaning and more stress about all the repairs and maintenance that need to be done frequently in order to have a beautiful and safe home, therefore less opportunities for the things that truly matter.
Once you own a large home, you’ll have a tendency to clutter it up with lots of stuff (you don’t really need), just to fill in all those empty spaces. On contrary, having less space actively encourages you to question all your needs and wants, therefore you buy and own fewer things.
The more you own, the less freedom you have.
Rule of thumb: Never buy more space than you generally need, or you’re going to actually use.
Are you going to use that second living room or fourth bathroom? Do you really need to have an office and a guest room? Be realistic, and think functionally. Don’t fall into the trap that bigger is always better.
Home is one of the biggest investments you’ll ever make. I understand that you want to buy the best home for you and your family, but you also need to consider the return, just like you would with any other investments.
Point A) There will always be people who will want a big house/apartment, however, with how fast our world is changing, real estate market trends can also change rapidly. If we look at current trends in real estate, it’s visible that big homes aren’t attractive to buyers the way they were before + not everyone is able to actually afford them.
Point B) Many people today are exploring more ethical lifestyles (from the minimalism movement, small-house movement, to zero-waste and more sustainable ways to live), and thus aren’t interested in purchasing large homes, meaning what was once a sound investment can now be a major loss.
Big houses will also be harder and will take longer to sell than more commonly-sized ones.
Most people who want the big home in the first place, actually don’t want it at all – they want things they believe a big home can provide (status, success, recognition, space to raise a large family, ability to entertain friends, etc.). And yes, some of these desires can be fulfilled by owning a large home, but the question is for how long?
If you buy a home as a source of happiness, you’ll soon find that happiness cannot be found in things.
Thanks to hedonic adaptation, our happiness and excitement levels always return to the default baseline, despite positive or negative events or life changes. Said another way, a big house will eventually lose its allure. And when that happens, all those hours spent cleaning, all those big bills to pay, all that extra space to maintain will make us mad at the big house we were so happy to buy.
When we buy large homes for the wrong reasons, we’ll almost certainly regret the decision sooner or later.
Bigger isn’t always better. If you’re currently looking to upgrade your lifestyle, and buy a bigger home, take an objective look at how will this purchase affect you and your financial stability in the long term.
If you purchase a bigger home than you actually need, will you still be able to continue to build your nest egg and retirement fund? Will you still be able to afford lavish trips several times per year? Will you be able to work less, or you think you will have to work more?
In the end, the decision you make will impact your future greatly. Consider buying a smaller (starter) home with a lower financial impact, and then, as you and your family grow (and if you truly need it), you can always upgrade to a bigger home in the future.
Today’s task: if you’re looking or thinking about buying a home (now or in the future), create a list of the pros and cons of a bigger home. You have some examples above. I’m certain you can come up with a lot more.
Consider what size of the home can meet your family needs, how much income can you allocate to paying monthly expenses, bills, and mortgage, and will a bigger house actually make you happier and more content in the long term?
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