One of my favorite places in my home to sit is in a really comfortable chair that faces a big window looking out on some nearby houses and a cornfield (I live on the edge of a fairly small Iowa town). I usually sit there in the morning with a cup of coffee as I do some reading and taking of notes for future Simple Dollar articles, and sometimes I’ll just gaze out the window and see what the neighbors are doing.
I live in a pretty modest area of town. There’s a section of houses about a mile south of me that are much larger and nicer than our house, and another section of houses about a mile east that are even larger and nicer than those houses.
When I look around, I see a lot of Toyotas and Hondas sitting in driveways. Most of them are several years old, a lot of “late-model, used” stuff.
I see a lot of gardens in the backyards. I see a lot of modest decks, big enough for a few people to sit and for people to grill.
I see a lot of houses that look like mine.
I know a lot of the people in my neighborhood. A lot of them have good jobs. A lot of them live pretty modest lifestyles.
I don’t know their finances, but I’m willing to bet, based on outward signs and what I know of their careers, that a lot of people that live near us that are close to our age have their homes paid off, and they have some money set aside for retirement.
You might not think “financial success” when you drive by the modest homes in my neighborhood with older (but still shiny) cars in the driveway, and my own home is included in that.
On the other hand, when I drive through other neighborhoods, I see houses with two or three times the square footage of my own. I see brand-new cars in the driveway, some of them being Lexuses, BMWs and the like. I see enormous decks, some of them multi-level. The people in those homes give an outward appearance of success, or at least one particular type of success.
I have a lot of friends in those areas, too, and most of them have jobs similar to the people in my neighborhood. They’re teachers, or they work for local businesses.
So, what gives? Why do they have a huge house and a new car and I don’t?
Well, that money has to come from somewhere. A few of them might have been helped by parents or had some other kind of windfall, but many of them still owe a lot of money on their homes and, likely, on those cars, too. The number of bills they have coming in is a lot higher. Likely, they don’t have a lot of breathing room in their monthly expenses. It might mean fewer retirement contributions or some consumer debt. It often means some higher level of financial stress than I have.
Most of the people in both neighborhoods — myself included — have a choice as to which lifestyle approach to take.
I could have a 2,000 square-foot modest home with a small deck and a late-model. used car in the driveway, but that option comes with debt that’s completely paid off and money in the bank for retirement.
Or I could have a 4,500 square foot home with a huge deck and a brand-new car in the driveway, but that option comes with a big mortgage, car loans and no room to save for retirement.
There are advantages to both options, but given the two choices, I prefer the smaller home. That’s why I chose it.
Why? The bigger home would certainly be nicer to live in, in some respects. If I were to sketch out a 4,000 square foot home, I’d have a bigger kitchen and a game room and library in the basement with recessed shelves and a bigger bedroom for Sarah and me with two closets and all kinds of other little features.
It’d be nice to go out and drive a luxury car whenever I needed to go anywhere. Luxury cars do have lots of little touches that make them nice to drive.
There’s a real choice to be made between an expensive lifestyle and a less expensive one.
So why not choose that lifestyle? There are a few reasons.
First of all, I did live that lifestyle, and it was loaded with background stress. Sarah and I spent the early years of our professional adult lives carrying a significant debt burden in the form of student loans, credit card debt, car loans, and we also spent a great deal of the money coming in.
It was a stressful life. A lot of the time, the things we spent were just effective short-term distractions from that stress. We’d go on trips and come home to financial stress. We’d go out for a fancy dinner and come home to financial stress. We’d buy a new television or a new gadget and come home to financial stress. That financial stress meant professional stress, too, as we had to stick with our current job and career path in order to be able to keep paying the bills, and that meant we had to put up with some career issues that weren’t enjoyable.
Another factor is that the larger your home and the more stuff you have, the more time you have to spend simply keeping it up. If you have a house that’s twice as big, that’s twice as much time spent doing things like dusting, vacuuming, and so on. (In fact, it’s likely more than twice as much time, because, with a larger house, the distance to put stuff away is farther.)
Furthermore, a larger home means more room for stuff, which means that it’s easy to accumulate more items, which means more time organizing them and looking through them to find the things you actually want. This might not seem like a big deal, but the truth is that you spend almost all of your time only using a small fraction of the items in your home, while the rest just sit there. More space for more stuff means more space for stuff to just accumulate and sit in closets.
For me, it boils down to a simple choice. I could live in a larger home with a nicer car in the driveway, or I could have a lower stress life with more free time. I will take the latter choice every time.
What about the value of looking successful?
There’s a catch here, of course. By living in a more modest home and driving a more modest car than some of my friends, I don’t look as successful to others, at least in some respects in terms of what modern American culture values.
I know that if all of my old high school classmates looked at the homes of everyone in our class and had to decide who was the most “successful,” I almost definitely wouldn’t be the winner. The life I choose doesn’t convey “wealth” or “success” at first glance, not at all.
Doesn’t that have a cost? Doesn’t that cost me in professional and community life?
For me, that question really depends on one thing: are there things I want in my professional life or my community life that are enhanced enough by the appearance of financial success to be worth the cost of financial success? In other words, what do I want out of life that I could have if I appeared more affluent that is denied to me by living a less showy life?
For me personally, neither my social life nor my career are bolstered in any real way by spending money on appearing affluent, nor does it really help my wife. I’m a writer with a home office, so I don’t need a fancy wardrobe or car to bolster my career. My wife is a teacher — she needs to dress professionally but functionally for the classroom, but she doesn’t need an expensive car either, and neither of us needs a home to convey “success.”
In fact, outside of sales and management, there aren’t many careers that thrive on presenting affluence.
What about social factors? For me, it comes down to this: I’d rather have friendships that are built on character and shared interests than on possessions. Every single one of my close friends is my close friend because we enjoy each other’s company, share some interests, and respect each other’s character. I don’t really want friends or relationships that aren’t based on those things. I want friends I can trust. I want friends with which I can have deep conversations. I want friends that I can share meaningful leisure time with.
The truth is if I’m going to invest my money into what will make me more successful in my career and more successful in building the kinds of friendships I want, I’m better off investing my money in things that will minimize my stress and maximize my free time. The less stress I have, the better I am at working and the better I am at building social relationships. The more free time I have, the more time I have for friends.
Owning a large home and a fancy car works against both of those things. A large home absorbs more time and costs more. An expensive car definitely costs more money, too. When I’ve spent more money on those things, I feel more money stress. When I spend more time cleaning and maintaining my home, I have less time for friends and I have less time for leisure, too, which adds to stress. A bigger and more expensive home costs more money and eats more time, both of which work against what I actually want out of daily life, adding social stress and reducing leisure and social time.
The key is how you define “success.”
I define success as having low stress in my life, a fulfilling job, plenty of leisure time, good friendships, and a good community reputation. Having an expensive home or a luxury car does not really support that model of success; in fact, it works against that model.
Other people have different ideas of success, and there are some visions of success that do involve expensive houses and nice cars. It’s just not my vision of success and the life that I want.
The question for you is this: how do you define success? What constitutes a successful life for you? If a successful life for you is oriented around low stress, meaningful work in a career that doesn’t reward flashiness and good friendships, then choosing success means choosing frugality and financial stability far above having a nice home.
There isn’t a right answer for everyone, just the right answer for you.