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Small Is Beautiful

Dennis Friedman  |  February 6, 2020

I’M SAYING GOODBYE to an old friend I’ve known for 35 years. We had a special relationship that enriched my life in many ways. Although I’ll be moving to a new city and will never see my old friend again, I’ll always be grateful for our relationship, and how it helped me financially and emotionally.

You see, as I put my dear little friend—a one-bedroom, 789-square-foot condominium—up for sale, I’ve come to realize how important it was to have a home that helped me live below my means.

Our relationship over the years had its ups and downs. It would have been nice to have a larger home, so I could have offered out-of-town friends and family a place to stay. It would also had been more convenient to have a washer and dryer in my home, so I didn’t have to lug my laundry down to the appliances in the garage.

I have to admit that moving to a larger home crossed my mind occasionally. A few years after I bought my condo, I considered purchasing a nearby 2,258-square-foot house with three bedrooms and two bathrooms.

At the time, this single-family home was selling for $275,000, roughly three times more expensive than my condo. That single-family home has appreciated nicely over the years and is now listed at $1.2 million. Instead, I stuck with my condo, for which I paid $90,000 and which was recently appraised at $377,000.

I ask myself, “Would I have been further ahead financially if I’d bought the larger, more expensive home?” It’s difficult to make an accurate assessment without knowing the total cost of owning each property. A bigger house comes with bigger expenses. That’s one reason I didn’t buy the house. When I looked at it, it already needed a new roof. I also didn’t need a house that size.

Indeed, I have no regrets about my small, less expensive condominium. It’s benefited me in at least nine different ways:

  1. The condo meant low fixed expenses, including modest mortgage payments, property taxes, utilities and insurance.
  2. It helped me have hope for the future, because I could save for my long-term goals.
  3. It allowed me to make maximum contributions to my 401(k) plan.
  4. It also allowed me to contribute to a traditional IRA, a Roth IRA and a personal savings account.
  5. It gave me the financial leeway to build up a six-month emergency fund.
  6. It helped me live free from financial stress.
  7. It allowed me to become financially independent, including the freedom to retire at age 58.
  8. It helped me help others. I was able to quit the workforce, so I could assist my parents as a caregiver.
  9. Most important, it put an affordable roof over my head, keeping me safe and secure during difficult economic times.

The important thing to remember when purchasing a home: Buy one that you can afford, so you won’t have to mortgage your financial future. That’s exactly what I did—and I’m thankful for it.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include On My MindTurning the Page and Journey’s End. Follow Dennis on Twitter @DMFrie.

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