I recently lost a second neighbor from my cul-de-sac to the utterly silly mythical belief that they had “outgrown the house.” It kind of shakes me up because both of these homeowners were persons whom I considered fellow followers of the frugal lifestyle. They drove old cars, performed their own home and yard maintenance, and, at times, seemed downright cheap in their lifestyles. But one after the other, these families of four people each somehow convinced themselves that they just had to up and leave a neighborhood that they loved because “we’ve just outgrown the house.”
Let’s take a careful look at this nonsense with the goal of preventing you from taking this massive step backwards in your quest for financial independence. As noted, each of these families had a total of four people living under their respective roofs. Both lived in two story houses, and the last family had four – that’s right, four – bedrooms. So that comes to one bedroom for each person, including the eleven and seven year old children. Assuming the parents shared a bedroom (I’ve never asked), that actually leaves one unused bedroom to boot. But regardless, there’s really no way anyone can say with a straight face that a family has “outgrown” a house when the ratio of bedrooms to residents is one to one. Does anyone remember the good old days when kids actually shared a room?
To make matters worse, the most recent family to leave actually moved out before they had sold – or even listed – their house. The home then sat vacant while they poured money into a variety of repairs and renovations that they had avoided investing in while they actually lived in the place. They then got lucky and sold the house to a buyer, at a fire sale price, after six months of paying to maintain, insure, and own two dwellings. It was enough to make any reasonably frugal person shake the head.
The problem, though, is far deeper. When you really delve into the root cause of this foolish rationale for selling a home in a bad market, taking on a fresh, new, larger mortgage, incurring higher tax and insurance liabilities, and all of the other financial blows that this family incurred, you realize that the “we’ve outgrown the house” excuse is nothing more than the result of overconsumption and failure to maintain a disciplined, simple lifestyle. Apparently, you see, these neighbors had simply acquired too much stuff to hold in their 2,300 square foot house with double door garage.
Wouldn’t a simpler solution have been to simply sell off some of those clothes that are busting out of the drawers and closets? Or to toss some of those well-worn shoes that haven’t been worn in years? Perhaps they could sell or donate the hundreds of books that line the walls, none of which have been read in a decade? I bet those dinosaur computer monitors sitting in the garage could be dumped without notice. And, after all of that, if they still found a lack of sufficient space, wouldn’t a storage shed in the backyard be a better step to take than to sell your home under bad financial circumstances and take on a bigger long-term loan?
The bottom line is that most families with no more than two children, and especially those with children within five to seven years of adulthood, should be looking forward to downsizing the house. Think about it, and you will see that those kids will leave home before you know it, leaving you with a couple of vacant rooms. At the same time, you will be drawing closer to retirement. Wouldn’t it make more sense to sell the house in a good market, completely without pressure to sell at a loss, and then invest the capital gains while moving to a cheaper house with less space to heat and insure? As an added bonus, downsizing forces a homeowner to purge the home, and the lifestyle, of those needless box loads of utter junk that do little more than add to the stress of life.
In the end, this is all another illustration of the need to think it through before you buy. Please, adhere to this simple rule of frugal living.