• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Home
About Us Contact Us Advertising
Articles
Budgeting Debt Frugal Insurance Investing Making Money Retirement Saving Money
Tips
Money Saving Tips Trash Audit
Make Money Forums Blogs
Create a Blog Control Panel All Entries All Blogs
Tools
Calculators Prescription Drug Coupons Online Savings Accounts Test Your Knowledge Financial Directory Credit Cards

SavingAdvice.com Blog

Bridging the gap between saving money and investing

Subscribe

 

Join Now or Login

  • Home
    • Advertising
  • Tips
    • Money Saving Tips
    • Recycle, Reuse and Repurpose
  • Make Money
  • Credit Score Guide
  • Forums
  • Blogs
    • Create a Blog
  • Tools
  • Financial Basics
    • Back to Basics: Saving Money
    • Back to Basics: Beginners Guide to Retirement
    • Back to Basics: What Every Child Under 10 Should Know About Personal Finance
    • Back to Financial Basics: Investing In Stocks

Skipping the Extra Bedroom Could Mean Having $500K More in Retirement

June 15, 2020 by Amanda Blankenship

retirement

An extra bedroom has become a fairly common (and acceptable) waste of space in your home. According to Finder.com, there are 34 million more bedrooms in America than there are people. However, the habit of purchasing extra space for your home could seriously be costing your retirement savings.

How an Extra Bedroom is Killing Your Retirement

Typically, spare bedrooms are largely unoccupied. Sometimes they house a lightly-used home office or an extra bedroom for company when they come to town. In general, your spare room doesn’t get more than two weeks’ worth of use per year.

Here is a piece of advice: just buy a pullout couch for your guests and downsize. In metro areas, a four-bedroom house is about $100,000 more expensive than a three-bedroom (plus the interest on your mortgage).

Let’s get a little more specific. In Boston, for example, the median price for a four-bedroom house was $540,000, while a three-bedroom sat around $380,000. Assuming a 20% down payment and a 30-year fixed mortgage rate of 4%, that is a difference of over $600 per month.

Now you’re probably thinking, “what about in smaller cities?” Well, there is still potential for savings. In Las Vegas, four-bedroom homes are $80,000 more expensive. Chicago home buyers will save $100,000 opting for the smaller space.

Breaking Down the Potential Savings

If six figures in initial savings isn’t enough to motivate you to give up the spare room, don’t worry. As mentioned above, in a city like Boston, this could equate to $600 per month in savings. That amount of money could make it possible to live in a better area and still be within budget. It could go towards paying off debt and help you reach financial freedom earlier.

Best of all, it could add serious funds to your retirement. If you invest the extra $600 per month and earn 5% per year, you will have an additional $500,000 stowed away by the time you pay off your home. Boomers closer to retirement may not be excited about moving, but downsizing by one single room could offer six figures of added retirement security (or extra trips with your grandkids).

Younger families focused on giving their kids their own bedrooms may think downsizing isn’t for them either. Making your children share a room doesn’t make you a bad parent and it can give you the financial freedom to spend more money and time with them.

No matter how you look at it, Americans are wasting money on extra bedrooms in a big way. In some cases, it could cost them their retirement.  Readers, would you consider giving up your spare room to help pump up your retirement savings?

Read More

  • 10 Smart Podcast Episodes to Help You Understand Money During Coronavirus
  • Can You Still Make Money In Real Estate?
  • How to Use a Retirement Withdrawal Calculator to Retire Sooner
  • Think Twice About Using Your Retirement Savings Right Now
Amanda Blankenship
Amanda Blankenship is a full-time stay-at-home mom. Her family recently welcomed their second child, a baby boy, into the world. She loves writing about various topics, including politics and personal finance. In her spare time, Amanda loves to play with her kids, make food from scratch, crochet, and read.

Reader Interactions

What did you think about this article?
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Comments

    Leave a Reply Cancel reply

    Your email address will not be published. Required fields are marked *

    Primary Sidebar

    • Articles
    • Tips
    • Make Money
    • Credit Score Guide
    • Forums
    • Blogs
    • Tools
    • About
    • Contact

    Subscribe to Our Newsletter
    Your subscription could not be saved. Please try again.
    Your subscription has been successful.
    Copyright © 2025 SavingAdvice.com. All Rights Reserved.
    • Privacy Policy