Many individuals are beginning to identify with minimalism, as rising costs in real estate have generated a need for creativity…at least when it comes to living space. According to U.S. Bureau of Labor Statistics estimates, it costs 32 cents per month to maintain any given square foot. That means that an additional 54% of your mortgage payment goes toward maintenance. Sounds a little extreme, doesn’t it?
Fortunately, there are several ways to tackle this problem, and they have everything to do with purchasing smaller spaces and being smart about their set-up. Author and real estate professional Matt Parker shares that, “Living smaller is not only going to become mandatory (increased building costs, increased real estate values); it is emotionally freeing, and socially conscious. The recommendation is not to stop buying real estate; it’s to create spaces that supplement your health, loving relationships, financial future and your only precious resource: your time.”
Parker offers the following recommendations to increase wealth by cutting back on home expenses:
- Minimize warehouse-sized shopping. Studies show we can’t tell if bigger packages are actually cheaper because we have no reference for them. Additionally, you will end up wasting or over-consuming large quantities (and enjoying them less).
- If you can swing it, 15- to 20-year loan amortizations can save you hundreds of thousands of dollars.
- Install motion-sensing light switches in your rooms to cut back on your electric bill.
- Planting small trees in your yard has been proven to drop summer temperatures by approximately 15 degrees, and raise them similarly in the winter, especially once the vegetation is lush and sufficiently-sized.
- Get a professional wardrobe assistant several times a year, buy great outfits, and use an app like Letgo or Listia to “off” old clothes. Stop buying random clothes you won’t wear and save money in the process.
- Connect with real estate agents who have lots of listings. “In any given month, we have thousands of dollars of furniture and home dressings to give away for free,” says Parker.
- Eat whatever you want, in exactly the amounts you need. Buy the right amount, and don’t engage in a stockpile method of storing food that requires refrigeration and storage containers.
- Eliminate landline phones.
- Establish a lifestyle budget that forces you to create cash accounts for: vacations, cars, investments and doctor’s bills. What would an extra $500 be worth in 30 years invested in a tech stock versus a refrigerator with glowing ice receptacles?
According to Parker, financial freedom isn’t about not buying and consuming the things you enjoy, but, rather, prioritizing them over things that appear to be necessities, but really aren’t.
Matt Parker is the author of “Real Estate Smart: The New Home Buying Guide and Real Estate Agent Talks.” Parker works entirely paperless and happily lives in a 560-square-foot home with his wife, where he prioritizes living, not clutter.