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Size Matters. How Big Are You?

What do you consider status symbols? What are the signs that you’ve “made it” in your world? And do you think that what you consider to be markers of your place in society is substantially different from what others consider? Are there regional differences as well, or differences based on how you were brought up or what your family had? Is it what I think of as the usual house-car-school dynamic for you, or do you have other things that you rely upon to signify success to the outside world?

Human society is rife with status symbols – big cars, big houses, titles after the name, designer clothing, the right neighbourhood, membership in elite groups, and name recognition. For many, the status symbol looms more important that any underlying meaning, because the status symbol represents power and reflects how we want other people to see us.

The condition of one’s body can be a status symbol. As times have changed, so have the ways in which men display their ‘financial status’ to those around them. “Hey, wanna see my financial status?” In the middle ages when workers did physical labor outdoors under the sun and often had little food, being pale and fat was a status symbol, indicating wealth and prosperity, through having enough food and not having to do manual labour. Now, when workers usually do less-physical work indoors and find little time for exercise, being tanned and thin is often a status symbol.

They also indicate the cultural values of a society. For example, in a commercial society, having money or wealth and things that can be bought by wealth, such as cars, houses, or fine clothing, are considered status symbols whereas in a society that values honor or bravery, a battle scar would be more of a representation.

But does it really matter what you drive or where you live? Are we viewed differently depending on the size and model of our car or whether or not we live in an up and coming area?

Downsizing your home is most commonly associated with empty-nesters and retirees looking for smaller spaces after the kids have moved out, but it’s also becoming a more popular move for a growing number of hard-working, money-smart homeowners. It’s also a move that makes a lot of financial sense.

Sometimes appearances are more important than comfort levels. For home owners who place a great deal of importance on how they are perceived by others, which is often exemplified by offering the appearance that one is maintaining a certain level of financial success, a smaller home might not project that image.

Especially for long-term home owners, trading down means changing a lifestyle, and some people are resistant to change. There is a certain comfort level obtained by staying with what is familiar. That along with the stress, cost and aggravation of moving can be classed as the downsides but look just as frankly at the upsides.

If you’re spending less on your mortgage payment, you are likely to have money leftover every month to allocate for other needs or desires. Or perhaps you could pay cash for a smaller home from the proceeds of your existing home. Just saving $500 per month for the next ten years turns in to $6,000 per year, not including interest. That’s $60,000 over the course of a decade, even if you just tuck the money under your pillow.

Fewer rooms and smaller spaces cut down on the time expended to clean and maintain. Smaller homes can reduce the time spent on household tasks, leaving more hours in the day to do something else more enjoyable. With your newfound time, you can start a hobby, visit friends, travel or simply relax instead of spending hours cleaning, improving, or fixing your too-big house.

It costs a lot less to heat/air condition a smaller home than larger. Typically there is no wasted space such as cellars in smaller homes. Less square footage decreases the amount of energy expended. Reducing energy is better for the environment and helps to keep your home green!

If there is no place to put it, you’re much less likely to buy it. That means less money is spent on clothing, food and consumer goods.

Less responsibility, smaller workload, increased cash flow and greater flexibility – added together all reduce stress. Homeowners who have successfully downsized sometimes appear happier when they are no longer overwhelmed by the demands of a larger home.

The site of your primary residence can have a big impact on the cost of groceries, gas, car insurance, commuting and property tax A new location can result in a shorter trip to work and it is also a great way lower your taxes due to the lower assessments on a smaller home.

So the type of car you drive reflects how we want other people to see us. People who drive a Bentley or Maserati states that they are really, really wealthy. Park one of these on your drive and the neighbours will think, “Hmm, that’s an expensive car. He must be doing well.”

Your car tells others who you are and how well you are doing. Yes, those wheels of yours are sending a message about you. Whether you want it to or not.

However there’s no getting away from it – cars are money pits – they constantly go down in value, devour fuel by the gallon, and often require all manner of repairs and maintenance work.

Figures published in the UK in 2007 shows that it now costs an average of £2,197 to maintain, service, insure, tax and fuel most vehicles, compared with £1,409 in 1997. The prices of petrol and oil alone have risen by 52.6 per cent over a decade. In addition to this vehicle tax and insurance have gone up by 52 per cent on average from £395 to £601.

Therefore size is important!

Buy as small as you can for your day to day needs. A smaller, more fuel efficient model can save money on fuel bills, tax and insurance – and reduce emissions. You may decide you need a big car because you have relatives that live over 400 miles away. If you only visit them twice a year however, and most of your driving is done in a 50-mile radius a big car may be inefficient. By buying a smaller car for the majority of driving and renting a bigger car for the long trips you will save money.

Like any major lifestyle decision, planning is the key to success. Plan first, then downsize! Bigger is not necessarily better! It just takes a little bit of strategy to make sure that you are doing the right thing and that you won’t be sorry about it after the fact. Success does not mean a beautiful car, a big house or the latest gadgets.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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