Surprisingly Big Benefits of a Smaller Home

It’s hardly news that downsizing your home will save you money.

In addition to the lowered mortgage payment and taxes, you’ll also spend less on utilities and maintenance.

But living in a smaller house isn’t just a smart financial decision.

Deciding to downsize can also improve your quality of life.

Here are nine ways that living in a small house has made my life better:

1. You Have Less to Clean

I’m not known for my housekeeping abilities, but living in a 1,400 square foot house means my lack of a clean gene doesn’t show so much.

I grew up in a 2,500 square foot house, and cleaning was an all-day, all-family affair. It was exhausting even just thinking about it and we didn’t do it as often as my mother would have liked.

Now, I do my cleaning in 15-minute bursts throughout the day, and cleaning the house rarely becomes an overwhelming horror that I avoid. If we had more house, that would mean more rooms to clean and more places for clutter to gather.

2. You Can Improve Your Health

If you have less to clean, you are more likely to do the kind of dust-eliminating deep cleaning that only happens in larger houses if you employ an army of maids. Less dust (and pet hair and dander) means cleaner air and fewer allergic reactions.

In addition, a small house really encourages you to get outside more often. Why stay inside a small space on a beautiful spring day when you could go for a walk or a bike ride?

3. You Become Less Focused on Stuff

Just as a goldfish will grow to fill the size of a bowl it lives in, a regular family’s need for stuff will grow to fit the space it has to fill.

Living in a large house means more rooms to furnish and decorate. But it’s more than that. When you live in a small house, it’s easy to browse in stores without buying because you don’t have room for new stuff.

Small living changes how you view making new purchases. In a large house, there’s always room for more, so you might as well indulge.

4. You Have More Free Time

Along with buying less stuff because you have no room for it, you will also avoid the time costs of maintaining all that stuff, as well as the time cost of keeping your large house clean and in good repair.

Living in a small house means that the needs for your home take a smaller bite out of your free time, allowing you to pursue the things in life that you are really passionate about.

5. You Have More Family Time

One of the selling points for big houses is that everyone gets to have their own space. And while I would never want to give up my me-time, I don’t think I need an enormous separate room to have it.

Families in very large houses don’t have to spend time together, because each person has a space to retreat to. When everyone is all thrown together into a small living area, that allows for more fun family time. (It also allows for more squabbles, but isn’t that what family is also about—learning how to handle conflicts?)

Average Square Feet of Homes in US

Average Square Feet of Homes in the U.S. – Source:

6. You Optimize Your Space

People will often want a big house for reasons that seem perfectly logical: they need space for overnight guests, or a large dining room for the annual Christmas party, or a restaurant-sized kitchen for when the whole family comes for Grandma’s birthday dinner.

But these kinds of reasons ignore how families actually use their space on a day-to-day basis. You will be much happier using all of your available space the 360 days of the year you do not have overnight guests, parties, or dinner for twelve, rather than having unused space for the majority of the year.

It’s better to plan for regular rather than irregular use since it’s easier to find creative solutions for infrequent problems.

Resource: The Minimalist Home Office: 5 Tips to Organize Your Workspace and Get More Done

7. You’re More Likely to Know Your Neighbors

Big houses are often on big lots. You can easily wave at your neighbor while you’re both getting in the car in the morning, but it takes a little more effort to actually spend time with them.

Small houses are often set closer together. Spend an afternoon sitting on your porch, and you’ll have the chance to see children playing on the sidewalk, neighbors doing yard work, and the nice couple down the street walking their dog.

It really is easy to be a good neighbor when you don’t have to walk a quarter-mile to get there.

8. You Can More Easily Afford the In-Demand Neighborhoods

While every real estate market is different, you can generally count on small houses being more affordable than their big-blueprinted neighbors. That can often translate into a more affordable home in the hot neighborhood with great schools.

9. You’re Reducing Your Environmental Footprint

Small houses consume less energy and use fewer materials in the building process.

But in addition to these environmental benefits, small houses are also generally built-in more walkable areas, which means you don’t have to jump in the car just to get a gallon of milk.

And since buying a small house will often mean buying an older home, you will be preserving the environment by not building new—which is the ultimate in recycling.

10. Smaller Mortgage

The cost of homes for an area are usually based on a “per square foot” amount and a little extra for the number of square feet in the lot.

A smaller home will necessarily have a lower mortgage. Using the average square feet in a home we mentioned above and a $100 per squarefoot estimate (to make the math easy), the average home now costs $100,000 more than and average size home from 1970 (in today’s dollars). 

That means a 30-year mortgage will be about $700 more per month. If you took that $700 per month and applied it to the principle of the mortgage on your smaller home, you would pay it off in 10 years instead of 30.

That’s some serious debt freedom! 

11. Lower Escrow Costs

Along with the higher mortgage, the cost of insurance and property taxes are typically higher with a larger home. 

This is going to vary greatly from each city, county, and state government. Check with your local tax authorities to see if downsizing your home will make a big difference in your costs.

Taking that money and applying it to the mortgage could be a big difference in how fast you pay off your home.

12. Easier to Renovate

Big spaces need big renovations and small spaces need small renovations. 

If you have a major renovation to do, the smaller home will take less time and cost you less money than similar renovations in a large space.

If you are person that loves to change things up, then the smaller house allows you to afford doing this more often.

13. Easier to Sell

Smaller homes are more affordable, making them appealing to a mutch wider part of the population. First time home buyers, retirees, those with limited budgets, all of them are able to afford a smaller home.

Large homes usually limit you to people who can afford the house and those who need the space. While larger home are very appealing, they can quickly price themselves out of a large portion of wage earners.

14. Cheaper to Furnish

Home furnishing can be an expensive part of homeownership. Couches, beds, dining room furniture, it all ads up.

With less space there is less to furnish and a lower cost to you. Another advantage could be, with less furnishings needed, you could get nicer furniture.

I don’t recommend this until the kids are out of the house. Mine have beaten my furniture into submission on more than one occasion!

15. You Can Take Risks to Benefit Your Income

One of the main goals here at PT Money is to help people find ways to earn more so they can live the lives they dream of. 

By having a lower cost of living, you can sink more money into side hustles, new business ventures, and other investments. If we were to take the simple $700 per month I mentioned on the cost of the mortgage, how much faster could you retire if you invested that into retirement accounts?

The Bottom Line

Downsizing isn’t just for empty-nesters or those who bought more house than they can afford. If you live in a big house, think about how downsizing to a small one could improve your life, your relationships, and your bottom line.

Do you ever have the desire to live in a smaller (or bigger) home? Why?

Emily Guy Birken About Emily Guy Birken

Emily Guy Birken is an award-winning writer, author, money coach, and retirement expert. Her four books include The Five Years Before You Retire, Choose Your Retirement, Making Social Security Work For You, and End Financial Stress Now.


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  1. Smaller homes are harder to sell. There’s a small house in my neighborhood that’s been for over three years! The owners still live there while they try to sell it. They have open house every two weeks. I don’t think they’re worth investing in if they’re not at least so big…