As I mentioned in a previous article, I am an IA, I am reading Thomas Stanley's new book Stop Acting Rich.  The most significant characteristic among the wealthy and happy is that they live in houses below their means.

I think that this is crucial for new home buyers to think about.  If you want to enjoy life, you can't be worried about money constantly.  One easy way to put yourself in the position of always being broke is by buying a home that costs too much.

Key To Happiness

According to Stanley's research, people who live in houses slightly below their means are happier than people who live in houses above their means. I don't think that this is really surprising, but interestingly, the price of the house and the size of the mortgage is not the only reason for this.

People who live in wealthier neighborhoods are much more likely to suffer from "keeping of with the Joneses."  If you live in a house in a neighborhood that stretches your budget, chances are the people around you will own other things that you will have a hard time buying, like luxury cars, expensive home furnishings, and other expensive items.

While Stanley didn't put it into these terms, I think the key to happiness is contentment.  But, this is not simply a mental place that you need to take yourself to.  Instead, you need to put yourself in the best position to be content.

How To Live Below Your Means

This list is not exhaustive, but here are some things you can do to help you to live below your means and be content with your life.

• Live in a more rural area - your money will go a lot furth
• Live in a neighborhood that is in line with your economic level.  It is better to live in a slightly cheaper neighborhood than a slightly too expensive neighborhood.
• Find activities that you enjoy doing.  Focus on doing not buying.
• Make friends.  Hanging out with friends and socializing often costs a lot less than shopping.
• Focus on building wealth.  Change your mentality to one of thinking about how to make more money, how to invest your money and how to increase your net worth.  Use your money to make more money, not hyperconsumerism.

Don't Be House Poor

If you only take away one thing from this article, take away this - buying a house that eats up your cashflow is a sure road to unhappiness.  If you really want a large house, then save your money, earn more money and get increase your net worth before buying it.  Once you are wealthy, then buy your dream house.  By that time, you might learn that your dream house is actually much smaller than you otherwise thought.

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2. Top 10 Tips for Graduating College With Little Debt
3. I Am An IA