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Living in a Small Space Can Pay Big Dividends

Written by Laura Martinez - 15 Comments

When we got married, our first apartment was a very tight fit. It was a small, one-bedroom apartment with an awkward layout. Our living room had to be creatively arranged to accommodate a small couch, a television, and a chair for any guests that might drop by. There were also no locks on any of the interior doors, so people had to announce when they were using the bathroom as a precaution (this actually worked) and our stove was smaller than average.

It wasn’t the Ritz, but we enjoyed our time there and have some happy memories. We spent a decent amount of time finding this apartment, and it was well worth the effort. While many of our friends were confused that we purposely chose a small place based on only one of our incomes, we found it was a great start for our marriage. If you’re trying to decide on your first place as a couple, here are some factors to consider.

Big pros for our small space

I want to share some of the immediate and longer-term benefits we’ve had from renting a small apartment.

  • Lower rent: Our rent was very reasonable for the area, and we had a great location across the street from the beach. That gave us more money in our pockets and a bigger buffer for our monthly cash flow. An added bonus with our small apartment was that the building had a laundry room. We had to schedule our laundry times with neighbors occasionally, but it was less than 30 feet from our front door.
  • Less stuff to buy: The temptation to fill your apartment with stuff just isn’t there with a small apartment – there’s no space for it! Given our limited budget, this was a huge benefit.
  • Encouraged us to explore: A smaller place encouraged me to get out of the house to stretch my legs and explore the world around me. Our location was convenient to many free and low-cost activities, and we discovered a number of ways to have fun without spending a ton of money.

I know some people would say that we lacked some convenient features in our apartment, and they’re right. After all, our little place didn’t have a dishwasher, and the layout was a bit odd. But these minor issues didn’t stop us form enjoying our home.

Why we chose a smaller apartment

At the time of our wedding, I was a full-time college student and starting an internship. The pay was good for the area, and even better for a student, but there was a long commute. Living in an area with a lot of traffic, I had to be smart about when I left for work and when I headed back home. My goal was to complete the internship assignment for the semester – there were no guarantees that it would continue, and I didn’t know how quickly I’d be able to find comparable work and pay if/when it ended.

At the same time, my husband was a recent college graduate who had been working for his new employer for less than a year. We looked at our budget and decided to focus only on apartments that we could afford with my husband’s salary.

We had specific goals that we wanted to reach, and keeping our housing costs down would help us get there sooner. One financial goal was to pay off our car loan. It was a good chunk of our monthly expenses, and the car was rapidly depreciating in value. We also wanted to build up our savings for the long term goal of buying a house. Having lower housing expenses allowed us to meet both goals and build our credit score as well.

When we moved out-of-state, we rented a larger apartment, but we still based it on one income. With no car payments at this point, the money that we saved was going toward our savings, and we eventually started house hunting.

Big help for us on house hunting

Being patient and keeping our housing expenses relatively low was beneficial for a few reasons. When were were preparing for the house hunting stage, we knew what we wanted in our first place based on our previous experience and that of our friends with their own places.

We also were used to resisting the pressure of buying a bigger space and moving out of the comfort zone of our budget. Believe it or not, it was the financial “experts” at the banks that were pushing us to looking at bigger mortgages. Buying a house was only one of our goals, and we knew that getting the biggest house we could afford would hurt us in the long run.

Thoughts on living in a small space

Have you ever made a conscious decision to live in a relatively small space? If so, what were some of the benefits and drawbacks that you experienced? Is there anything in particular that people should watch out for? And do you have any tips for finding a great deal on an apartment?

Published on March 22nd, 2011 - 15 Comments
Filed under: Debt Reduction, Frugality, House & Home, Saving & Investing

About the author: helps families achieve financial freedom by sharing tips for reducing debt and building freelance income over at Couple Money.

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15 Responses to “Living in a Small Space Can Pay Big Dividends”

  1. 1
    Amber Says:

    Hi Laura
    You don’t say how small is small, but mine is 440sq ft., which I share with two medium sized dogs. There are TONS of people making this choice to live small and love it. Just check out Apartment Therapy for a quick fix.
    My favorite benefits:
    1. Low utilities
    2. Less accumulation of stuff
    3. Only having to plug in the vaccuum 1 time and I can reach the whole house.

    That said there are drawbacks, and I think the main one is how much time I spend thinking about every square inch of space and whether it is being used as efficiently as possible. This could drive some folks nutty, but I love it. I have also had to buy some furniture that fit the space better than what I had in my old apartment that was twice as large, so in that way I did not save money. On average monthly though, my utilites run about $80 total for water+heat+electricity.

  2. 2
    BG Says:

    One person w/ 440sq ft (not counting the dogs), is equivalent to four people w/ 1760 sq ft. When I was growing up, there were 8 of us in less-than 1500 sq ft (1 bathroom). I still can’t figure out how my parents did it.

    I wouldn’t mind down-sizing, if for no other reason than to be forced to sell (or give-away) a ton of stuff that we don’t use. Life would be so much simpler too.

  3. 3
    Des Says:

    We just moved from 1400 sf to 800 sf, on purpose. At first, it was difficult and frustrating trying to make it all work (with 2 dogs, 5 cats, and kids on the way), but I was totally won over when we got our utility bills. We pay less than a third in utilities here (partially because we are now on a natural gas line, and have well water). Also, I can clean the whole house top to bottom in a couple of hours, since there just isn’t as much to clean :)

  4. 4
    BG Says:

    Des) Wow, that is truly incredible. BTW, I do remember that old house I grew up in: my parents had built lots of shelving between the studs (and knee-walls) in the bedrooms. When you have a family in such tight quarters, you got to be inventive!

  5. 5
    Marcus Byrd Says:

    I am currently living in a small space. I love the house because it is a nice place, but we are so looking forward to getting a place where we can stretch out. The savings are great but another positive is that when we do get that place it will come with a greater appreciation because of the two years we are having to do without.

  6. 6
    Scarlett Says:

    When my husband and I first married (in our mid-30s), we lived in the apt. he already rented; about 800 sq. ft. not counting basement (which housed the washer and dryer). When it came time to even think about buying a house, we attended a couple of those “We can show you how buying a house is more affordable than renting the appt. you’re in now!” presentations. Neither of the experts were able to show that a house was more affordable for us AND we were socking away everything we could for a down payment. That’s the #1 advantage: a low monthly output for your housing. Also, it’s really hard to stay mad at someone you can’t get away from.

  7. 7
    Jim Says:

    We purchased a 24 foot motorhome and really enjoy it. It is cozy but we find it very comfortable. We recently came back from a 30 day trip and had a great time. What we realized is that we really don’t need that much space to live comfortably together. Our home is 2100 sq feet and it is way too much room for us. We could comfortably live in a home half that size. Our plan is to have my wife retire in 2 or 3 years and then we will travel for a bit and hopefully be able to sell our home for a moderate profit. Most likely either buy a smaller home or rent. When we were younger a “big” house was such a status symbol…home ownership is no longer what it use to be IMHO.

  8. 8
    Nickel Says:

    BG: Space and people don’t scale in a linear fashion. If one person lives in 440 sq ft including a bathroom and space for cooking, you don’t need 4x as many bathrooms, or 4x as much cooking space for 4 people. In other words, one person in 440 sq ft != 4 people in 1760 sq ft. I’m definitely impressed by 8 people in 1500 sq ft, though!

  9. 9
    almost there Says:

    My wife and me are adrift in a 2400 sq foot house and it is too big for us. But it is what we like and have put a lot of work into. If one of us were to pass on I think the other would look into the small house movement or just buy the smallest house that we could get. I refuse to live in a condo or townhouse and have the risk of my neighbors burning me out. Lived with that for too many years.

  10. 10
    BG Says:

    Nickel) Great points! My grand-parents live in a little apartment (build onto the side of my parents house) that is probably a little smaller than 400 sq-ft. Basically a bedroom / kitchen, a sitting area (family room), and a small bathroom. No self-standing stove/oven, but the kitchen area has a dorm-sized refrigerator, microwave, and toaster oven. No sink (except for the bathroom).

    And, it feels quite spacious in there.

    Alternatively, our house (about 2100 sq/ft — 4 people) — has pretty small bedrooms, and larger common areas. A 2-car garage is counted in that figure, and it just a storage area for junk really. And I feel confined — because of the clutter. We do have a bedroom that is dedicated to toys (to keep them out of site). Can’t wait for the youngest to get older so we can start getting rid of ’stuff’.

  11. 11
    Wifey of a Roadie Says:

    We’ve lived in plenty of small spaces — I’m talking budget-motel sized spaces with no bedrooms, only a living space, kitchen space and bathroom. It was my husband and I and two cats — very cozy. No regrets here. We saved money and every teeny tiny place had something awesome e.g., a 7th floor view of the Norfolk Harbor, a rooftop swimming pool, and sauna, or right on Hollywood Boulevard. If I needed too, I’d move into a small space again in a heartbeat!
    Wifey of a Roadie – Out!

  12. 12
    bookworm Says:

    When we built our house 11 years ago during the McMansion boom, we took some criticism because we had two teenagers and several pets, yet built a house that was 1500 sq. ft. People questioned us as to why we built “so small.” Now of course, the kids are on their own, the house is fast to clean, has enough room for the kids to visit for a weekend, and very reasonable utility bills. When we get even older, we may sell and move to an even smaller house. Truthfully, we were never crowded; there was plenty of room for the four of us, plus pets. I also love that our mortgage was way smaller than those of our friends! And a smaller house absolutely keeps you from accumulating Stuff.

  13. 13
    Elle Says:

    Thanks everyone for sharing your stories! I’m glad we were the only ones who enjoyed the benefits of small space living.

    @WOAR: When we were first shopping for a place in Norfolk, we were looking at studios and 1 bedrooms. I loved being across the street from the beach, but if we didn’t get the apartment we were looking at a tiny place by EVMS.

  14. 14
    Robbin Says:

    We love our 475 sq.ft. apt!

    My Husband & I have been sharing it for three years. We were even highlighted in the the NY Times’ Habitats column (July 2010).

    Sharing a small apartment successfully requires a certain state of mind, a keen sense of space & design and good “roommate” skills.

    Oh, and wireless headphones… definitely wireless headphones:)

    We even started a business together offering room dividers for others in small spaces:
    http://www.vitalsteelnyc.com

    Here’s the post to the NY Times Habitats article:
    http://www.nytimes.com/2010/07.....5habi.html

  15. 15
    oldcarbuff Says:

    Two adults, teenage son (and friends constantly in and out), and one or two big dogs in just under 1000 sqft Arts and Crafts bunglaow felt crowed, but now with just me and one medium sized dog, it’s almost too big.

    I love my house, though. As long as I can manage the stairs, I’m home.

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