How many of us have had money problems in the past year? How many times can we recount the paycheck not going quite far enough? I think one contribution to our money shortages is we tend to live bigger than we can afford. That doesn’t just apply to buying expensive things, it also applies to our housing. I know quite a few people who own houses too big for them to afford or an apartment they have no business renting.
I’m about to introduce a concept so foreign, so underutilized, and so incredibly useful it’s nearly taboo to Americans. That concept is living with people. “But Elsie, we do live with people.” Yes, you live with people by accident a lot of the time. You live with a significant other or you live with your parents because it’s cheaper. What I’m suggesting is, what if you could live alone but you decided not to? This decision is a financial one but it’s also really a decision that includes making connections with people rather than isolation.
American culture has become so much more isolative over the last half century. Instead of a mother or father staying home with a new baby they tend to go right back to work and let daycare handle it. Instead of taking care of aging parents we tend to put them in nursing homes. I realize that these examples are also financial decisions and I think that if we made better money decisions as a whole Americans would have the money to stay home when we need to.
One of the best studies we have on long term happiness began in 1938 at Harvard university and is still going today. 268 Harvard students were followed for the entirety of their lives and tested over the years to see how their decisions and lifestyle choices affected their happiness and longevity. Those who reported having more close friendships and good relationships with their family tended to be happier and live longer. In fact, having good interpersonal relationships by midlife was a better indicator of longevity than having old relatives was. We already know that for the most part married people live longer, additionally The Grant Study found that those who reported having stable, good marriages preformed better on memory tests and did not have nearly as much mental decline in old age as their single counterparts. Americans tend to highly value financial success and hard work. What this study shows is the people who live happier, longer lives are those who “lean in” to relationships rather than work. Harvard.edu, Yahoo!Finance
Part of the American dream is the idea of living independently, with no one to depend on. In other countries they don’t have such an independent view. Denmark, for example, invented the idea of cohousing. A group of single family homes with the traditional setup, coupled with a shared kitchen and living area where families can interact and serve meals as a group. Each family has their own separate space but share responsibilities for cooking once a week or other things like watching children. The whole concept encourages togetherness and cooperation, rather than the kind of isolation and competition we experience with our neighbors in the U.S.
This all may sound like a prescription for communism but hear me out. Group living solves so many problems we’ve created for ourselves in the U.S. We’re having less children than we ever have, yet our houses are bigger than they’ve ever been. Consequently, we can’t stay home after the baby is born– we can’t afford it. Imagine if that couple with the new baby lived with their parents. They could probably stay home and take care of baby. People tend to believe that while living independently you can still have close relationships. While thats partly true I think living with others sort of forces us to have regular interactions. We see our room mates or family daily, we check in with them and talk about our day. We don’t end up doing that if we’re just alone at home. I think we spend a lot of our lives working towards some ideal that’s been laid out for us. If we really focused on fostering close relationships instead of material success I think we’d find we’re happier and better off. If we can let go of what society tells us to want, most of the time material things, we can learn to meet our needs better and not live under a mountain of debt.
For singles, living alone is sort of the picture of success and at the same time it’s hard to afford. In the age of two income households, living alone on one income means you need to be making good money or you have to settle for being poor. If young people like me didn’t have this idea that we need to have an apartment to be successful then most of us could live with family or friends and save a whole lot of money. I’ve been out of high school 7 years now and I’ve never lived alone. Not only have I saved a lot of money and paid off all my debt, but I’ve been able to build a relationship with my parents I never had in high school. I think 20-somethings who live with their parents are made to feel like lazy, privileged kids who don’t know the value of a dollar. Believe me, you will never meet a more grateful, more self-aware young person who knows the struggles of paying bills than me.
Choosing to live with others is one of the best financial decisions I could’ve made for myself. Saving money at an age when most people are 20k in student loan debt is a huge leg up. I own my car outright and I’m able to save for my retirement; I work full time and go to school part-time. That is the opposite of laziness. I’ve found over the last few years that saving money often means choosing humility over looking cool. If you have $2,000 to spend on a car you go buy a $2,000 junker instead of using $2,000 for a down payment on a new car and then paying $400 a month for 4 years.
Group living is just another one of those ways money smart people humble themselves. I think our society needs to change in that we need to let go of the idea that somehow living independently is the best way to live. Not only are we spending more money needlessly, we’re closing ourselves off from the close relationships that we instinctively seek. Some good financial decisions require sacrifice. I don’t see group living as a financial sacrifice, in fact as we’ve seen in the research you’re more likely to be happy in cohabitation so long as your household is stable. More house and more work to pay for that house just isn’t going to make us happy folks.