Although some, during this pandemic, have found the extra time sequestered with family to be incredible, for others, it has underscored the fact that their existing home is too small.
Case in point: A family of four called us, wanting to move up. “We’ve completely outgrown our existing home,” they said. “We need more space, but we’re not sure we can afford a bigger house.”
After touring through their property — a 1,500-square-foot, three-bedroom, two-bath, single-family home — I sat down with them at their kitchen table.
“I have good news and bad news,” I said. I had worked with them a few years back and helped them move from a two-bedroom condo into their current digs. “The bad news first: I’ve run the numbers, and you’re currently not in a position to buy a larger home.”
“We figured as much,” agreed the wife. “But we can’t understand something. We fit perfectly in the condo — it was tight at times, but we all had enough room. Soon after moving here, we totally ran out of space.”
“I’m afraid you’ve run into a universal principal,” I explained. “It frequently catches people off guard.” I continued, “The principle states: ‘Your stuff will expand to fill all available space.’ It is actually a corollary of Parkinson’s Law which states, ‘Work expands to fill the time available for its completion.'”
The principle is simple: When people live in smaller homes, they understand that space is limited, so they buy small-scale items or hold off on frivolous purchases. They look forward to the day when they can get a bigger home to purchase the things they feel they need or deserve.
Once in the larger house, they fail to plan the space and act accordingly effectively. This failure means their new home quickly fills with stuff that consumes all available space.
A quick trip around the world highlights that this is, in many ways, a North American issue. Most of the world lives in small homes and have designed their lifestyles accordingly.
You would be hard-pressed to find a 28-cubic-foot refrigerator almost anywhere outside the USA or Canada. A quick trip to a country such as Italy, where people’s laundry festoons from every available balcony, demonstrates that most homes do not even have the type of clothes dryers we consider mandatory.
Additionally, as a society, we are obsessed with gathering possessions, many we seldom use and do not need. Paradoxically, those who learn to live with less frequently lead less stressful lives.
“Now the good news,” I said. “You don’t need a bigger home — just better management of the space you have.” I then explained a second universal law: “Money disappears at the rate you get it.”
I clarified, “This means that by developing an effective lifestyle plan and accompanying budget, you can live comfortably with substantially less. Invest the money you no longer spend on frivolous items so that down the road you will have the funds to buy a larger home if you decide you truly want it.”
This same principle applies to things like cars: I have lost count of the numbers of families who have not been able to buy their own home because they insist on driving fancy new vehicles.
Here are four key ways to help your clients reprioritize their lives:
1. Help them determine whether they really want to reorganize
Some people are quite happy with the lives they are living and do not want to change. Others, however, may want to change but just need help.
2. Help them establish a budget, and show them how to stick to it
Valuable resources in this arena are organizations, such as Dave Ramsey, who has helped thousands reprioritize their spending habits to attain their financial goals.
3. Help them reorganize their existing spaces to utilize what they have better
A trip to an organizational store can go a long way in getting clutter contained. If they store something away and don’t use it for an extended period, ask the question, “Do you really need it?”
4. Help them stop frivolous spending
We live in a society that measures a person’s worth by the quantity of stuff they own or the amount they spent to acquire something. Although it’s understandable on one level; on another, it’s totally ridiculous.
For example, many parents feel the need to buy their children more toys continuously. My advice is to buy fewer toys and then rotate them, so there are only a few out at any given time. This practice not only saves money but also maximizes space.
People who live comfortably within their means and invest wisely are often more fulfilled in their immediate lives and have expanded possibilities as their investments open other doors. Because money is actually a tool, teach your clients how to use it wisely.
You might not get an immediate sale, but you will gain friends and clients for life who, over time, might end up as a referral source for those who can afford to buy now.
Carl Medford is the CEO of The Medford Team.