I remember driving around a few years ago and wondering how on earth so many people afforded the new houses being built on every corner of town. A few years into the question, I found my answer. Most people have a mortgage up to their eyeballs and will be paying the monthly minimum for a full 30 years. Quite literally, exchanging the greater part of their days pay for a big ole house they dont use.

I realize that a nice 4 bedroom, 3 bath home surrounded by a luscious, landscaped, bright green lawn  is the epitome of the American dream. But I also realize that owning an ideal house in the suburbs is near the bottom of our important list, and maybe it should be on the bottom of yours, too.

See, we dont care for a lot of stuff. Stuff tends to accumulate and get thrown in closets, then in the garage, then into storage sheds that you had to buy for all of the stuff. The worst part all that stuff actually costs a small fortune to obtain!

Why on earth would anyone care to accumulate decorations/furniture/clothing/toys/trinkets/junk that doesnt get used? If its not a necessity, youre blowing your money. And if your blowing your money, your blowing the time it took to earn that money.

Since we dont really want more stuff, we dont see the value in an oversized home. As far as we know, a home is a place to cook, hang out, relax, and sleep. Beyond that, it has limited utility.

The High Cost

Consider that the cost of owning or renting each spare bedroom/bath might total $250 per month. This seems a reasonable average. In other words, each bedroom adds $250 per month to your rent or mortgage.

Now consider the fact that the additional $250 per month requires $75,000 in additional revenue producing investments with regards to financial freedom (courtesy of the 4% rule ). Thats huge!

So an extra 2 bedrooms makes for an additional $150,000 required to support that lifestyle.

How many years does it take most people to save $150,000 in an investment account? Thats how many years a big house is stealing from your freedom.

Just like the daily Starbucks coffee and fast food lunch, the spare bed and bath are literally bankrupting people into a lifetime of dreaded corporate employment.

Why not just downsize a good amount into a smaller house and learn to be happy with less?

The Next Move

If you are considering downsizing, you have to decide where to live. Two things matter location and cost.

You should be most concerned with location, location, cost. The location relative to work, location relative to groceries, and cost of housing. Pretty simple. Find a place close to work and walk or ride your bike. The true cost of driving is unbelievably high.

The cost of housing varies widely across America. I grew up in the Midwest and I literally almost crapped my pants when I first visited California. I cant believe real estate prices in some areas. Homes are 4-5x higher than what I was used to seeing. All the better to get crafty!

I think individuals looking to downsize should consider a maximum housing price of $400 per person. Thats the maximum. That certainly goes further in some parts of the country, but its universally possible.

Which brings me into yet another rant on peoples weird obsession with a particular climate or state. Why do you HAVE to live there? Is there a documented reason explaining why youre forced to remain in New York City? No, you dont have to. You simply want to. And sometimes for humiliating reasons.

If you are looking for financial freedom . move to a location with a lower cost of living. Especially if youve socked away a big pot of gold and a good chunk of equity in your currently overpriced location. There are millions of people who could permanently leave work behind if they would simply make one move to an area with lower cost of living.

Alternative Housing Options

There are plenty of houses that can be financed for less than the $800 per couple limit we set. So I guess its a decent start, but there are options to reduce housing costs even further.

This is obviously the easiest choice and the one that requires the fewest sacrifices. If you dont have children (or do), why on earth do you need 4 bedrooms? Small 2 bedroom homes can be built or bought for under $50,000 in the towns that Ive lived.

Consider looking for a small foreclosure. Some are perfectly livable and others could use a little work. If you are handy and willing to put in some sweat equity, there are great deals to be had.

If you are really awesome, consider something out of the Tiny House Movement !

Roommates (Rent out Your Empty Rooms)

If you own a home, rent out the spare rooms. If you dont own, find a roommate to split the bills.

This can be tough for families but for couples with no dependents, why not look around? Contrary to popular belief, the other person looking to rent probably isnt a pervert looking to raid your underwear drawers. There are a ton of nice people out there who are wisely looking to save big money on housing.

We rented 1/4 of a 2-story house with other people for the first part of our marriage.  That allowed us to live on $250 per month total. Now we are looking to rent out the other bed/bath in our mobile home. This would make for our lowest rent yet, by far.

Live in a Mobile Home or RV

This is an awesome option.  We bought a small single wide mobile home a few weeks ago. If youve never looked in a mobile home, do yourself a favor and check it out. They are nice. Many are full size homes at a fraction of the price. You can buy used and let the original owner eat a bunch of the depreciation, just like a good used car. Only downside mobile homes wont usually appreciate (although ours might after throwing in some sweat equity).

5th wheel Rvs are a great option too, if you have a good spot to park it. You can buy a nice one outright for under $10,000. The biggest drawback is inefficient heating/air plus high electricity cost per KW/h at the RV parks.

Find That Tiny House

Once you have an idea of what youre looking for, its time to test the market. If you can be patient, there are deals to be had.

If you want something custom, you could look around at small home designs. Ive seen some extremely cool 1 bedroom homes that were crazy cheap to build.

Craigslist is a personal favorite for housing. You can filter results by pricing and size. There are options to find roommates, shared housing, and temporary living. You can also post your own ad if you are trying to find something in particular.

For apartments, you can use Google and apartmentratings.com  to call around and ask for pricing/details. When you find potential housing, use the satellite view Google maps to scout the neighborhood. During that same time, you can map out a route to walk or bicycle to work and the grocery store.

As always, you have to put in research to find the best deals.

What is your ideal house? Is it time to downsize?