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My dad characterized his family as poor. My mom’s dad was an engineer on the railroad, and likely an alcoholic. Neither of my parents hit the inheritance lottery, so when they married in 1940, they started out with a blank financial slate.
They met while working at the Hostess Bakery, then owned a small restaurant for a while, with my dad finally getting a job at The Overland, AKA Jeep. After owning a duplex for several years, it was quite an achievement when in 1950, they bought the “big” two story house that I grew up in. My parents paid $12K for the house and paid it off in 1959. They wouldn’t borrow money again until I talked dad into financing his 1999 Ford Taurus, with a .9% interest rate incentive. “Big”, incidentally, is the way my mom always described our house. They would own the “big” house until health issues forced them out in 2003.
The aunts, uncles, and cousins would gather at the “big” house for Christmas, and in the summer for parties around the ceeement pond, (that’s the Beverly Hillbilly term for a built-in pool for those too young to remember the show). My brother and I truly believed that we lived in a “big” house.
Exactly how big was our “big” house? Per the county auditors website, a whopping 1348 square feet! It sat on about a tenth of an acre lot. I suppose you could say the house was big if you compare it to the single story homes around it, which weighed in at 686. We had three bedrooms, one the size of a modest walk-in closet, and one bathroom, shared by five people. There was also a toilet in a corner of the basement that included a multi-generation family of spiders that lived way too close to my butt.
The moral of this story is that being mortgage free for 44 years enabled my parents to be very generous when it came to family and church. They helped my brother and me pay for private schools for our kids, and their sizable cash gifts at Christmas jump started my IRA investments.
I learned many things about love, and family, and money growing up in a “big” house.
Thank you Dan for the wonderful story
I grew up in a 650-square-foot, two-bedroom condo, surrounded by a loving family, a beautiful garden and close neighbors. I’m not nostalgic for the small home—we were four people, often with visiting relatives, in a very tight space.
What I am nostalgic for is the closeness. When I could afford it, I bought a 2,100-square-foot home and was quite happy to have the extra room. But I tried to carry forward the family life I grew up with.
That, to me, is what’s worth remembering about those smaller homes—not their size, but the families that filled them. Decades later, we remain close across generations.
…. and that’s what it’s all about!
Dan, what a wonderful story. What struck me most is that you and your brother truly believed you lived in a “big” house. At 1,348 square feet, it wasn’t the size of the house that made it big, it was everything that happened inside it.
Your parents also demonstrated something that seems increasingly rare: the freedom that comes from living below your means and avoiding debt. Paying off their mortgage in nine years gave them decades of financial flexibility, but what I especially like is what they did with that freedom. They used it to help their family, support their church, and give the next generation a financial head start.
It sounds to me like you really did grow up in a big house, just not in the way we usually measure one.
Andy, your comment really gets to the heart of my post. My parents were extraordinary people. Two long lost friends from my childhood who were frequent guests at the ‘big house’, have found me on social media, both commented on how great they were treated by my folks. My wife said the same shortly after we got together. Their kindness was a gift that couldn’t be measured with dollar signs.
Thanks Dan, nice piece.
I just looked up the data for Australia. In the 1960’s (the “good old days”) the average house size was about 100 square metres. In the 2010’s it got up to about 245 sq. m., and has now dropped back to about 200 sq. m.
Listening to Morgan Housel recently, he guessed that if most people could go back to the 1950s and 1960s, they would look at the small houses, no air conditioning, no internet and head straight back to 2026.
I think Morgan Housel is correct; going back into the 50s would almost feel like living off the grid to me.
I have always wanted a paid off house, but we bought our last one at 2.625% rate. I don’t think I should pay it off in my situation.
That’s the rational way to approach it of course, but sometimes the feeling of being debt free is liberating. My first mortgage in 1981 was 16% ! As rates came down over the years , I re-financed or bought a new house. Never had anything close to 2.625 though . Been mortgage free since 2007.
John, when we contracted to build in 2002, interest rates were around 3%, and we were prepared to borrow at those rates. By the time the house was ready for us, rates rose to about 7%, so we paid cash.
I think the only plus to paying off your loan would be the warm and fuzzy feeling of being loan free. I don’t think it makes financial sense though.
Thanks for posting.
Keep great articles coming. We always bought the house that fit our budget. And yes, my associates always seemed to have newer, bigger better. But now with all that we saved after 50 years, we live in a big apartment of 1838 sq ft at a wonderful CCRC in Missouri. It feels like I am on a cruise ship everyday, with all the activities you would ever want. Everything we need and no worries, NICE. It was worth it to live within our means.
I’m with you, William!
I grew up in a one bedroom apartment with one bathroom and five people. My parents turned the dining area into their bedroom. From age 10 forward I slept on the living room convertible sofa.
I didn’t know what living in a house was until I got married.
In my memory my father was a station master for a railroad, but for most of my growing up an automobile salesman and until the last ten or so years he worked, it was commission only income.
I doubt my parents ever felt financially secure, but we weren’t poor, but definitely frugal. Not anywhere near today’s middle class lifestyle. Family didn’t own a car until I was around 15-16.
My grandparents, dad’s side, were downright poor. Though it was never my dad’s ambition to be rich, he had a strong desire to be financially secure.
Dick, was it a strong desire of yours to have a more secure financial life than your parents, that helped you to be successful in your career?
It was. I learned from their mistakes, did just about everything the opposite of what they did.
If I am honest I still resent that college was never mentioned in our house, never any encouragement except get a job after high school.
I still remember some high school friends telling me they were off to Princeton and Harvard. I remember being impressed, but didn’t comprehend how significant it was.
I suspect that is why I was determined for our children to get a college education and now even helping grandchildren.
It all turned out fine and I’m glad all my children are better educated than I am. And I am pleased that now I can help them financially instead of the other way around.
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I grew up in a small, old house built in the 40s. We moved in as renters in 1965, my parents bought it from the landlord in the early 70s for $25K, and my stepmother sold it after my father died in 2000 for about $500(!). Turns out that even a tiny rundown house that’s in a bucolic small town 15 miles from San Francisco with a clear view of Mt. Tamalpais in the front yard can appreciate dramatically.
The new owners bought it for the lot and location and tore down the house, so I can’t check the square footage, but I’d guess 1200 square feet at the most. One bathroom for five of us and big well-fed rats in the laundry room. The third bedroom, which my sister and I shared, was a garage conversion, so we just had a carport.
Unlike you, though, I never thought we lived in a “big” house. Our street was the “poor” street surrounded by wealthy neighborhoods. I grew up very aware that we had less than the kids I went to school with. Nor did my parents use their low housing costs wisely. They filed bankruptcy and borrowed heavily from relatives to get by. When my stepmother finally sold the house, it was heavily mortgaged.
My wife grew up poor but didn’t realize it until she saw the financial aid filing when she went to technical college. He mother made some of their clothing, she wore bread bags on her feet to keep them dry while wearing her boots in the winter. The old farmhouse her parents bought when she was in early grade school initially had no bathroom, and no heating upstairs. Her parents used to heat up limestones on the wood stove and put them under the covers before they went to bed. Eventually they had a closet downstairs converted into a bathroom for a family of six. The bedrooms were all upstairs. Her 10ish older brother told he that setup was luxurious. When he was was a child snow came in between the sheathing in his room In an earlier house.
David, Mrs. Lancaster truly lived through some lean times. I’m curious, had anyone else in the family gone beyond high school before your wife decided on technical college? What motivated her to continue her studies.
Yes, most, and they are now very comfortable in retirement. As for the three that didn’t: One has had to ask for money in retirement from siblings to make ends meet. Two other though also are well off without college degrees.
Dana, today you and Randy are in a very good place, financially and otherwise. Did the little house and portly rats shape your desires for a better situation?
Good question. I definitely felt financially insecure as a child, teenager, and young adult. (In hindsight, I’d characterize my college years as a time of “food insecurity,” though that term didn’t exist back then. I donate to the UC Davis food pantry because of those memories.)
Randy and I married young (23) and had just vague ideas at the time about what we’d do with our lives. I don’t think we ever expected to be well off. Neither one of us came from wealthy families (his dad was in the military; his grandparents were Dust Bowlers). It’s surprised us both how well things turned out, relative to how we were raised and what we anticipated.
Back to your “little house” piece, we lived in a “medium” house (better than what I grew up in, less than we could have afforded) for more than 20 years, and that did set us up well for where we are now–both in home equity and the opportunities that’s given us and in saving money elsewhere because our housing costs were modest. So I’d say Randy and I are more like your parents than like mine.
Dan, I’m reminded of the first item on this list from Jonathan. My parents also laid the foundation of their sound finances by living in the same house for decades. I wonder what the financial outcome would have been for the many folks who downsize their home for retirement if they hadn’t “up-sized” earlier in life?
Edmund, thanks for the link to Jonathan’s article. Much to the chagrin of my first wife, I would never allow us to become ‘house poor’ by buying a home that was more than I could comfortably handle. Still, I had this question in the back of my mind; would it have been better to push the budget with a bigger house, and let appreciating home values along with the leverage that a big mortgage provides propel me into the financial stratosphere?
I recently answered the question, though I admit my situation may be anecdotal. Around 1990, our friends lived a short distance away from us, in a neighborhood of 3000 square foot homes. I do not remember what they would have cost when new, but it was surely more than I could have afforded.
Recently I drove through the subdivision, and curiosity got the best of me. So I stopped the car and logged onto the county auditors website. I checked the transfer page for recent sales prices and was shocked to see the homes selling in the $350,000 price range. In other words, pretty cheap. I’m not sure why this is, perhaps the fact that the homes are 50 years old and in need of upgrades?
Again, this is just for us, I think it worked out better owning real estate that was comfortably within our means while building up the retirement accounts.
Dan, I loved this piece. It’s amazing how relative scale is when you’re a kid—your parents built a wonderful life and legacy in that house. It reminds me of the “three up, two down” I grew up in over here, with five rooms packed into just 600 square feet. Our only heat was a single portable kerosene heater that burned a pink fuel, and one of my favorite winter pastimes was scraping frozen condensation off the inside of the window frames—only learning years later that the heater itself caused it.
We were always grateful for families like yours whose hand-me-downs ended up in the local charity shops. That said, someday we really need to have a serious chat about your childhood fashion choices… not your finest work! 😉
WHAT? You didn’t care for my psychedelic sport coat and bell bottom jeans with the rope belt?
Dan, I’d pay good money to see you in that ensemble!
My most sincere thanks to the Clements family for not enabling the posting of pictures🙏
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