A Bigger Home Than You Really Need

Most Americans dream of living in a lovely house. In most cases, this means the biggest one they can afford regardless of the fact that the mortgage will chip away at your income faster than you can say ‘honey, I’m home!’.

The issue is twofold. First of all, the costs of a big home will make saving a lot harder and could set you back years if you’re not careful. Secondly, we tend to believe buying a cheaper house will make us miserable with our decision in the long run.

However, that’s not what the research shows. You’re very likely to take materialistic purchases for granted as time passes, and buying a smaller, cheaper home under your budget will probably make you feel better about your financial stability, both now and in the future. It’s a clever financial and emotional decision.

What if you’ve already bought a big house? Downsizing is also an option. You get a large portion of the money back, money you could easily spread over several retirement accounts according to your needs. After all, this is what most super savers do.