I feel much better about living in my tiny house after speaking with Wealthy Barber Dave Chilton the other day. He’s just written a new book called The Wealthy Barber Returns, where he shares ways to avoid spending traps and bad financial habits that can hold you back.
One big lesson for Canadians: stop thinking a big house will make you happy.
“The message I drive home in the book is that you have to live in a house you can truly afford,” he told me. “Buy a modest home and if you do move up, make sure you can afford it relative to your income and savings.”
Chilton even goes as far as to say that living small is the key to happiness. “There’s a high correlation between people who live in smaller homes and happiness,” he told me. Why? Because it’s cheaper. “When you have a more modest home, it not only frees up the mortgage money, but you pay less for property taxes, upkeep and maintenance. It also takes less time to clean. Everything is lower,” he says. You can use the money you save on other things like savings and travel.
Our house is definitely on the modest side – my husband and I live with our two kids in a narrow old row house in midtown Toronto. For us, space is at a premium – especially because we both work from home. But we do love the low maintenance costs. Because our house is relatively cheap, we have more money to put aside in our savings. And we don’t feel guilty when it comes to treating ourselves to things like dinners out, new clothes or summer holidays.
At some point, we do need to move up to a bigger space, but we won’t let ourselves get maxed out by a huge house. Our new place will need to balance space with overall happiness — and that means we won’t be left cash-strapped.
Thanks for the tip, Dave!