Why You Should Rethink the American Dream
In the school of experience
My husband and I moved four times to four different apartments in our first four years of marriage, then bought a house and stayed there for eight years.
When we moved to a larger town for a better job, we sold our first house for about 50% more than we had originally paid for it. I thought we had done well. But after subtracting the amount we had spent on home improvements over the years, I realized we had actually made far less on the sale.
We rented an apartment in our new town so we could get to know the area before deciding to buy another house. Our rent was approximately the same as our previous house payment, but of course it didn't qualify as a tax deduction the way our mortgage interest had.
Imagine my surprise when we filed taxes the next year, took the standard deduction, and realized that it wasn't that much less than our mortgage interest had been. We had paid thousands of dollars in interest every year in order to save a few hundred dollars in taxes.
I started to wonder if owning a house was such a good investment after all.
Six years later, in 2007, we sold that house and made just enough to use as a down payment on a brand new, slightly larger house. We were a bit over-extended with the new housing costs, but we figured that with cost of living raises and my new part-time job we could manage.
That was a mistake. In 2008, not only was there no raise, there was actually a cut in pay. And my new job was cut also. This didn't fit with our plans, and by the time we paid for our daughter's wedding in 2011 we had serious credit card debts and an underwater mortgage. Millions of people were in the same situation.
Fortunately, our lender accepted a short sale in 2012, and we moved back into an apartment.
And here we are, eight years later, out of debt, with well-funded retirement accounts and reasonable rent. Our 800-square-foot apartment more than meets our needs.
We have no plans to buy a house.
I realize that's not the American Dream. With 80% of the U.S. population preferring single-family home ownership, and only 8% preferring apartment or condo living, we're outside the norm.
In European countries, however, more people live in apartments than in detached houses. My uncle has lived in Germany for decades, and he and his family have always lived in small apartments. That's not unusual – 62% of Germans live in apartments.
My husband and I are very happy apartment dwellers. I think that if you stop to consider the benefits, you might actually agree.
6 reasons to love apartment living
1. Less effort
Any living space requires upkeep, but less space means less time spent cleaning and tidying. Chores don't feel overwhelming, so it's easy to keep up with them. Vacuuming takes less than 20 minutes, and caring for a mini garden on a balcony may be pure joy compared to mowing, watering, pruning, weeding, fertilizing, and raking an entire yard.
Some people love working on their house, but if that's not how you want to spend your weekends, vacations, and all your extra money, apartment living frees you from the obligations (and temptations!) of home ownership. It's not lazy, it's an intentional choice to focus on other things.
3. Less clutter
Apartments are generally a lot smaller than houses, and that means you have a lot less space to accumulate possessions. This forces you to be vigilant about clutter. In a house, you might have a basement, attic, garage, or shed where you can stash things you want to keep "just in case." In an apartment, extraneous stuff is obvious, and so you learn to edit.
4. More connection
Unlike a house where a family might be scattered in various separate rooms, in an apartment you tend to gather together. You might use your kitchen table for meals and also as a desk, and spend a lot of time together there. Even if I'm watching TV in the living room and my husband is reading in the bedroom, we're only about a dozen yards apart. We have breathing space, but we're present for each other.
5. Less conformity
As an apartment dweller, you realize that you don't have to get caught in that work/spend cycle just because everyone else is doing it. You're free to explore other avenues to well-being.
6. More financial freedom
What trade-offs are you making if you decide to upgrade to granite countertops or if you need to replace your HVAC system? If your money is always going toward home projects and repairs, then maybe you don't travel as often as you would like, or you don't buy those season tickets, or you don't pay for organic food, or you don't give as generously to causes you care about. Apartment living lets you build your budget around what's really important to you.
Our way of life isn't for everyone, but for us a minimalist lifestyle in an 800-square-foot apartment has brought more contentment and stability than our years as homeowners.
The American Dream might not bring as much happiness as we're led to expect. Questioning that belief might be a positive choice for you too.
Simple Money: Achieve Financial Peace and Abundance with Minimalism.*
- discover your money beliefs and how they influence your financial decisions
- make a budget that lets you focus on your needs and find a way to afford your desires
- buy less and demolish debt
- feel empowered, not poor, as you control your spending
- increase enjoyment and satisfaction without spending money
- and more!