https://www.financialsamurai.com/dont-let-your-ego-make-you-buy-a-big-house-you-dont-need/
I have a confession to make. I want a bigger house. With a family of four and potentially an au pair, a bigger house would provide for a better lifestyle. Now that we’re spending so much time at home thanks to the pandemic, a bigger house is also much more valuable. Real estate FOMO is getting the better of me!
The question I have been thinking about is whether it is my ego making me want to buy a bigger house or practicality. I’m hoping it’s because we simply want to live a better life.
I recently submitted an offer for a single family home. Why would I do such a thing, especially given I had just gone through the difficult process of selling a single-family home rental the other year? Ego and maybe a little bit of real estate addiction.
In 2014, we downsized from a 4 bedroom, 3.5 bathroom, 2,300 sqft house to a 3 bedroom, 2 bathroom, 1,920 sqft house with a small office. Not only that, we downgraded from a well-known and expensive neighborhood to a relatively unknown neighborhood.
We took our ego squashing quest even further by buying a Honda Fit as well. With simple clothes, a compact car, and a modest house, we successfully completed our mission to go completely Stealth Wealth. It felt wonderful being nobodies!
Then things started to change once our son was born.
My wife and I haven’t cared about status for a very long time. If we did, we’d still be plugged into society so that we could make more money and boost our identities with our job titles.
But even with Financial Samurai, we don’t actively promote ourselves because we don’t care. We’ve always just done our own thing, regardless of whether people think we’re strange or not.
In 2014, we could have bought a house 2X more expensive than the one we live in now with cash, but instead chose to purchase a 40% cheaper house. But after four years, I’ve begun wondering whether we should start living in a bigger house with more amenities for the sake of our boy.
After all, the median size of a new home today is about 2,400 sqft on a 8,400 sqft lot. Our house is only 1,920 sqft on a 5,000 sqft lot. Shouldn’t we at least live a middle class lifestyle given we earn more than the median household income of $80,000 in SF?
Why are we being so frugal when our lives are half over and we have a precious little one to take care of? Once our daughter was born at the end of 2019, then I really started desiring a bigger house.
Given our house size is below the median, by definition, most homeowners will have larger house sizes than ours. One close friend just built a sweet 5,000 square foot house and he doesn’t have kids yet. Another friend remodeled his 7,800 square foot house for his wife and three kids. I live in a hut by comparison.
It’s strange to suddenly care about our house size since our kid doesn’t care about the size or cost of our house at all. All a child cares about is whether he’ll be safe and loved and supported by family and friends. We’re providing this as stay at home parents.
Maybe we’ve taken frugality too far. My ego is saying I’ve worked hard for my money and we deserve better. But my sensibility is saying we don’t really need anything more than what we have right now.