I am not sure how it got started, but the idea of a ‘Dream Home’ has come to mean the biggest most beautiful home you can afford. As it turns out, this isn’t the path to happiness. A ‘Dream Home’ should be the home most compatible with the life you dream of living.
When I was a boy, I shared a room with my brother. Of course, our sister got her own room. It was a small home in a modest but pleasant neighborhood. It may not have been the most ideal arrangement but we did fine. I don’t remember ever feeling cheated. In time, my parents were able to move us into a bigger home. My best guess is that the new house was around 1600 square feet. Although that is small by today’s standards, it allowed us to each have our own room. In my eyes, that was great! I had my own personal space.
Today, everyone wants their ‘Dream Home’. In fact, even first time buyers are searching for a home that is usually nicer than that home my parents were able to upgrade to. The idea of stretching to buy the nicest home we can afford has become the new normal. But how much can you really afford? And who decides that? Don’t worry; we are going to get into more of that later.
The idea of a ‘Dream Home’ has come to mean a bigger and better house – as nice as you can possibly imagine. I don’t know about you, but I can imagine a pretty nice house as can most people. If for some reason their imagination fails them, they can remember their friends’ or coworkers’ or family members’ unbelievably nice house. It’s easy to get excited about what your life would be like in that awesome place you design in your mind. Combine this with our ability to rationalize our home expense as an investment as well as the path to financial freedom and before you know it, we’re in pretty deep.
However, ‘Dream Home’ doesn’t have to be about bigger, better, and more (more rooms, more space, bigger yard, better amenities). Here’s an interesting idea – let’s rethink the ‘dream’ or at least get completely clear about what your dream is. A house is just one component of what you may consider a well-lived life. In reality, it’s probably not the most important, most memorable, nor the most life changing aspect in the grand scheme of things. When you’re old and gray, and looking back at your life – what importance will that house have had?
There is one point that can’t be stressed enough. Financially speaking, your home choice is life changing, impacting the entire course of your future. It plays an enormous role in the money pressures you feel on a daily basis. It is the largest expense you pay for each month. It impacts the amount of time you work to pay for it and maintain it. In the end, it can define your net worth; which as we’ve seen in recent years, isn’t always good. These financial components branch out and affect many other areas in your life. Did you take the kids on enough trips? Could you ever start that business? Could you comfortably take time off or do that volunteer work? Having to live up to the financial responsibilities of the choices you make for housing can put your life on an entirely new path. I’m speaking from personal experience here…so I think I know what I’m talking about.
So let’s shake things up a bit. Try to imagine less financial stress, possibly allowing you to work less. Imagine having more money to travel or take your family on adventures. What about having the time and money to start a business? Imagine simply having more time for the kids, your hobbies, or becoming more involved in your community – whatever your dream is. The most significant benefits of home ownership are not really about how nice the house is. The true benefits are in how you feel when you are there; doing the things you love. It’s the time spent having holiday dinners with family, BBQs with friends, and celebrating your children’s birthdays. Basically, it all comes down to how the house serves its purpose in your life plan.
Now take a minute and reimagine that ‘Dream Home’. What if you lived in a cute, smaller home with a smaller yard? It would be so much easier to keep clean and maintain. Imagine how much a smaller mortgage payment would mean in terms of daily stress. Maybe you’re the couple that chose the road less traveled by buying a simple, practical home so you could focus on the things that mattered more to you. Maybe you realized at a young age that you have a life to live and you know this is your path. Eventually, after living there longer than average (the smart money), you don’t sell it, but instead rent it out as part of your retirement plan. I’m pretty sure that after your friends stopped giggling about how small your hall bathroom is, they would start to see how smart you are and will remember your discipline and good judgment every time they write that big mortgage check. I’m not saying super cool houses aren’t nice –really nice. What I’m saying is that stretching yourself too far financially and believing the quality of the house is an important part of your happiness has caused a lot of unhappiness.
When you’re buying a house or thinking of moving, truly think about what matters to you in a broader context. How do you want to live your life? What really is important to you? What choices will you be most proud of? Take the time to identify where you hope to be personally and financially and how your home can help you live that life.