A few years ago, there was a very widely circulated statistic from the National Association of Home Builders about the increase in home sizes over the last sixty years. According to their numbers, the average American home grew from 983 square feet in 1950 to 2,434 square feet in 2005.

I grew up in a home that measured about 850 feet of floor space. It was a three bedroom house, though one of the bedrooms was extremely small. Growing up, I shared a bedroom with both of my older brothers for several years, then eventually inherited that room as my own as the older ones moved out.

We currently live in a home that’s very close to 2,000 square feet. It’s far larger than the home I grew up in – it has four bedrooms, for one. Our two children share a bedroom together – there’s also the master bedroom, an office, and a guest room.

Both houses have a kitchen, a living area, a dining area. Both houses have plenty of room for two adults and two kids to live.

What’s really the difference between the two situations? What makes up the added value in that extra 1,200 square feet?

In the end, it’s mostly used for storage.

I think I realized this most clearly over the past weekend, when it seemed that time and time again, all four of us wound up congregated in the same room. We spent a lot of the day in our living room, playing with toys, reading books, and enjoying the relative freedom that a family weekend brings.

On an average day together, we spend most of our time congregated in either the family room or the living room (which could easily be one room). At nap time, both kids fall asleep in a single bedroom, and we sleep in a second bedroom. We use the kitchen and the dining room for meals. As for the rest? The guest bedroom is often unoccupied. I could do most of my writing at a small corner desk in the family room instead of using an office. The laundry room could basically just take part of the space used for the entryway. We could eliminate all but one of the bathrooms without a real crisis.

And suddenly we’re living in a 1,000 square foot home.

Does this mean I regret this house purchase, and that I’m now looking to downgrade to a smaller place? Not at all. I like the area in which we live, where there are children the same age as my son (or within a year or two) in virtually every direction. Last summer, my kids spent almost every evening and good chunks of every day running around in the yard with other children their age – well-mannered children who are also being raised to be intellectually curious. We have a nice big yard that borders on a field and also on other yards, creating a huge green space for our children (and other children) to play together on.

What I did learn is quite simple, though: the square footage shouldn’t be the primary factor when choosing a house. Although there are times when it feels good to have room to spread out, most of the space is completely unused most of the time (except for storage of things we probably don’t really need to keep). Even more important, choosing a lower square footage usually means much less expense over the long haul – you don’t really lose living space, but you do lose storage space, which means that you can’t accumulate as much stuff, which thus means you’ve got less money invested in material items that are just tossed into storage.

One thing’s for sure – as my wife and I consider these factors and re-work the plans for our retirement home, the plans are slowly growing smaller and smaller.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

As usual, we’ll start things off with a few links to older articles that directly answer questions I’ve heard recently.
Debt Reduction and Debt Elimination Programs: What’s the Catch?
The Big Debate: Pay Off Debt or Save for Retirement?
One Big Way to Get Intense About Financial Independence

And now for some reader questions!

One of my goals is to learn more about home repair so I can be ready for some DIY projects (currently live in an apartment but am preparing to buy a house in a few years)… Hands-on experience is the best, so I’m sending out some queries to family/friends to do some things for them in exchange for an education, but I’m also a very reading-oriented learner. To that end, can you recommend any DIY home repair books that go into sufficient detail for a newbie?
- Aristotle

Personally, I’ve loved the Reader’s Digest Fix It Yourself and Do It Yourself manuals. They’ve helped me with tons of different tasks over the past few years. The focus of each book is a bit different – the “fix it yourself” is more focused on repairing problems, while the other one is more focused on doing upgrades.

I also wouldn’t overlook internet resources for specific tasks. You should always check YouTube and Instructables if you’re trying a new project. Some of the “how tos” offered by those sites are tremendous and even exceed some of the published versions I’ve seen.

When you originally asked the question, several readers recommended the “1-2-3″ books available at your local Home Depot. I’ve glanced through these and found that they go really in depth into specific areas. I think they’re good if you’re really interested in mastering a specific topic (like plumbing), but I’d start off with a more general book.

Trent, how is the iPod Touch? What do you use it mostly for? Music? Internet? No wait, I know – Twitter!
- the weakonomist

I mostly use it for web browsing (mostly checking blogs when I have some time to burn), checking the weather, and Remember the Milk. I’ve started using it as a pedometer, too, with the Nike+ iPod kit – I figured out how to tie the little pedometer sensor onto any kind of shoe.

I have a few games on it that I’ve played while waiting for appointments and on long car rides, but most of them are overly simple. The best iPod Touch game I’ve played (by far) is Rolando – an action puzzle game where you have to tilt the iPod to get balls to roll into certain places.

We are getting ready to come into a sum of money due to a death in the family a few months ago. However, we do not know how to best put the money to use. Should we pay off our unsecured debt (we have a lot) or create a larger emergency fund (we only have about one month’s worth of bills)?
- Chris

It depends on whether you’ve got children or not, honestly. If you have kids, I’d make sure my emergency fund was larger. If it’s just the two of you, I’d probably focus on paying off the debt.

Why? If you have kids, the last thing you want to do is radically disrupt their life because of a job loss or some other financial event in your life. Having a large emergency fund provides some security against such a scenario.

If you’re merely a couple without kids, you’re much better positioned to deal with abrupt financial changes – you don’t have dependents, after all. I might still buff up that emergency fund a bit, but my focus would be on reducing that big mountain of debt, which is sucking you dry via finance charges.

Trent: Off topic from the coversation but I appreciate your honesty on sometimes feeling the urge to quit blogging. My question is how much different is blogging for fun compared to doing it for a living? I mean I could quit right now and nobody would care nor would anybody be affected. If you were to quit thousands of people would be upset and I’m sure you’d quickly look for new work to support your family.

For me I feel like quitting everytime I put a lot of effort into an article and only 50 people read it. When you’re making zero money and have few readers the urge to quit is greated. How does one overcome this urge?
- Studenomics

I do feel a certain “push” to keep writing because of the expectations of the audience, something which doesn’t exist if you don’t have much of an audience. There’s also a financial need to keep writing, too – it provides a portion of our household income.

But those aren’t the reason that I continue to write – for the most part. Sure, there are times where I feel like I have to come up with an entry, but most days I simply enjoy writing. I simply love coming up with ideas and finding ways to frame them so that they can potentially provide a positive impact on a reader’s life. That, to me, is incredibly exciting, and it’s why I keep writing so many articles for The Simple Dollar. My real motivation is to have an article out there so that when a person who really needs that advice is searching for answers on Google, they might come across it, be inspired, and make a positive change in their life.

That’s an internal motivation. Expectations and income are external motivations, and I’ve come to find that external motivations aren’t particularly good at keeping me motivated over the long term. It sounds to me that blogging is largely filled with external motivations for you. Perhaps you should seek out internal motivations.

Interest rates have dropped to the point that it makes sense for DH & I to refi our mortgage. We are six years into a thirty year loan. DH just turned forty years old. Our two options: 1)refi to another thirty-year loan (effectively tacking on six years) and reduce our payment by $400 monthly (helpful considering we have a large & growing family and don’t necessarily expect enormous income growth relative to expenses growing with the kids) or 2) refi to a twenty-year loan at a cost of only about an additional $25 monthly. The first has the appeal of more cash on hand, the second gets us out of mortgage payments slightly sooner. This is our “forever” house, btw– I fully intend to move out of it when they carry me out in a box.
- Margaret

When are you planning on retiring? If you fully plan on working until you’re seventy or older, the thirty year mortgage makes a lot of sense. It provides you plenty of breathing room as your kids are growing up, allowing you to provide great experiences for them in their childhood. However, you’ll effectively “pay” for that later on.

Alternately, you may want to retire at sixty two, giving you more years of health in retirement – years to spend with grandchildren, traveling with your partner, and so on.

I think you should consider which of these two paths sounds most appealing to you. When you know, then you’ll have a good idea as to which mortgage plan you should choose.

I’ve enjoyed a couple of your “Dowloadables” products and am curious about how many you sell per month? Of the four you have listed, which title is the most popular?
- Frugal Dad

I have four downloadables available for $2 each, which appear on the right hand menu:
31 Days to Fix Your Finances: A series of exercises helping you center your financial life around your own core values.
The One Hour Project: Thirty one-hour projects you can do to improve your financial situation.
Twenty Great Ideas: Twenty personal finance and development books, boiled down to three to five pages each.
Building a Better Blog: A collection of all of my blogging techniques – great reading if you’re thinking of starting a blog of your own.

These are actually collections of earlier Simple Dollar posts, formatted into a downloadable PDF that you can share freely with your friends.

I sell between 60 and 100 of these in a typical month, about half of which are “31 Days to Fix Your Finances.” This has made me believe the effort is worthwhile, and I’m thinking of making a few more of them.

What type of cellular phone provider do you use? what kind of phone and services do you opt for?
- Louie

I use a regional service provider, U.S. Cellular. Given that I spend 98% of my time in the upper Midwest, which is the area where U.S. Cellular provides great coverage and service, they’re a natural fit. There happens to be a tower not too far from my home, so I get extremely good service from home all the time.

Their phone selection isn’t particularly great, though they do have a wide selection of Blackberries. Quite honestly, though, I tend to stick with cheaper cell phones. I’ve had my current phone for a few years now and it’s looking awfully worn.

We have a limited minutes plan that’s actually pretty cheap each month. We’ve looked at other services and not found a compelling price-based reason to jump ship, especially since we’re happy with the service.

Have you heard of anyone ‘diversifying’ their emergency fund into multiple currencies? Given the current financial chaos, and uncertainty about where deflation/inflation might go, I’ve been wondering if having 100% of my emergency fund invested in dollars is the best idea. Holding other currencies seems less efficient (due to fees and lower interest rates), and certainly carries its own risks, but do you have any thoughts on it?
- spautz

I would not worry about having my emergency fund in multiple currencies. An emergency fund is intended to be just a few months’ worth of cash to get you through a short term situation. I would always keep that in my local currency.

Beyond that, you’re beginning to ask an investing question with regards to how to handle the cash portion of your portfolio. In that case, I think it’s completely reasonable to diversify into different currencies – and if I were doing that, I’d go far beyond the euro and buy rubles and yuan as well, just for starters.

Just avoid the Zimbabwean dollar. Trust me.

Do you speak any foreign languages? Do you believe it is worth it for Americans to spend time to learn a foreign language?
- Frugal Bachelor

I do not speak any foreign languages. I can understand limited amounts of Spanish and can piece out bits of other language, but not enough to even attempt to speak them.

Having said that, I think learning a foreign language is a valuable skill for anyone to learn. Not only does it provide you with a new and valuable skill, it forces you to work with your overall communication and language skills, improving you in other ways as well.

If you’d like to learn a language but don’t know which one, consider one that would have a clear overlap with your career. Without that, consider a language used in a nation that you would enjoy visiting (particularly for a long term visit).

I’m a college student with limited income. I commute to both work and school (about 35 miles one way, 5 days a week). I usually just break even every month, though lately I’ve been working more hours, I make $8/hr. My car will be needing some work done, it just went over the 100k mark, but I don’t have the money to have it done. however, I just received a citi dividends credit card, I applied to take advantage of the cash back rewards.
I’m wondering if I should get all the maintenance done on my car and charge it to the card then slowly pay down the balance while the 0% APR still applies for the first 6 months. What are your thoughts on this?
- Brian

Putting a large amount on a credit card is a risk, particularly if you’re not sitting on the cash to pay it all at once. Having said that, if your car requires work and you don’t have the money on hand to cover it, you will most likely be using credit to pay for that bill. In that case, your 0% APR card is probably your best option.

My suggestion would be to start cutting your spending right now in any way you can. Can you carpool with someone for that commute, even just a day or two a week? Are there other expenses you can reduce? Look for things that will consistently reduce your bottom line (like carpooling or being more energy efficient) rather than one time savings (like selling DVDs). Good luck!

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Every other Sunday, The Simple Dollar reviews a personal development, personal productivity, or entrepreneurship book.

I’ve been a reader of the Zen Habits blog nearly since its inception. The author of the blog, Leo Babauta, applies a very simple filter to countless aspects of life: how can we break it down and make it simpler?

Over time, it became apparent that there were a handful of principles that could be applied again and again to any life situation, and those principles are the core of The Power of Less, Leo’s first book.

Reading the book, it comes off like a series of eighteen interconnected and exceptionally polished blog posts. This is actually a good thing – it means that each chapter isn’t overly long, has a focused and specific point, and connects well to the other chapters in the book.

Leo separates these chapters into two separate groups: one group clearly serves to explain the underlying principles behind the “power of less,” while the next group of chapters applies these principles directly to specific aspects of life.

Let’s dig in and see what we can learn.

Part I: The Principles
Quite frankly, I found the first half of the book much less powerful than the second half. Leo opens the book by attempting to set in place a handful of general principles that can be used in any situation to break things down into simpler and more manageable loads, but it becomes clear that these principles are clearly more powerful when seen in action.

Here are some of the principles outlined by Leo in this section:

Set limits Many people who are successful in a particular area often find themselves weighted down over time with related tasks – but ones that don’t really maximize their skills or their passion. Leo’s solution to this is to simply defend your area of expertise – step up to the plate for tasks that maximize your skills, but delegate or even avoid tasks that don’t utilize your skills well.

Single-task, not multi-task When you have one big task that needs to be accomplished, turn off all distractions and focus on that task. Remember, a five minute interruption actually eats much more than five minutes, as you also lose time in refocusing on the big task at hand. Turn off your phone, close that email program, and focus!

Start small Many things that we want to accomplish in life often feel too big to deal with – so we don’t. We give up on plans for the big diet or the big career push because the size of the task seems overwhelming. The key is to start small. Find a very small subset of the big task that you actually can accomplish, then focus on that. Instead of resolving to lose 50 pounds, resolve to lose one pound this week, for example.

Try thirty day challenges If you’re looking to change a behavior in your life, try that change out for just thirty days. Want to start eating a healthy breakfast each day? Try doing it for thirty days. Want to get into an exercise pattern? Just try it for thirty days. Want to try going vegetarian? Give it thirty days and see how it goes. By the end of the period, you’ll know whether that behavior truly works for you – and if it doesn’t, you can toss that behavior off to the side.

Part II: In Practice
The second half of the book was much more inspirational and valuable to me, personally. Here, Leo focuses on applying the principles laid out in the first section to specific situations. Here are five examples that stood out to me.

Time management Leo subscribes to the “rocks and sand” philosophy of time management. You should fill your day with just a few major tasks (the “rocks”) and let the small tasks fill in the time around it (the “sand”). When you attempt one of the major tasks, focus in on it and nothing else. Eliminate every possible distraction and allow yourself to get in the flow with that task. Not only will you get done faster, you’ll often get it done better as well.

Email Only check your email a time or two a day – and never first thing in the morning. When you check it, you should set up automatic filters to get rid of the routine things (like PayPal notifications) so that you can just peek in a certain folder, see all of the ones of a certain type, and move on. Most importantly, don’t reply to everything – read an email and ask yourself if it needs a follow-up – or what the worst case is if you don’t follow-up. If there’s no burning reason to follow up, don’t – delete it and move on to something more important.

Filing See the stuff written above about email? Apply the same thing to filing. Do it regularly – every day is a good place to start. If you don’t think the document will be needed again, shred it now – don’t file it. If you keep on top of it (and don’t waste time and space storing stuff that’s not going to be used again), filing doesn’t have to be a huge task.

Daily routine Establishing a good morning and/or evening routine can be the key to a successful day. Figure out a handful of things you want to get done during that routine (a shower, reading, etc.), then do them. Make a thirty day commitment to just maintaining your routine – make that routine the focus of your day. Once it’s established and is clearly a normal part of your week, you’ll find that it has become the foundation of daily success in your life.

Fitness Start off small, with an exercise routine that you can complete without feeling completely worn out. Then simply repeat this routine every day (or on a schedule that fills most of the days in a week). Gradually, as you feel stronger, add bits and pieces to the routine. Most importantly, couple it with a thirty day commitment to a healthier diet – don’t completely transform your diet, but replace a few unhealthy items with a few healthy items (like eating a banana for a snack instead of bananas foster).

Is The Power of Less Worth Reading?
Visit Zen Habits. Read a handful of entries. Dig into the archives a bit and read some of the stuff that seems interesting to you. Are you starting to get inspired? If you are, The Power of Less will really click with you – it’s much like a polished version of the material there. If you don’t find anything inspiring, though, The Power of Less likely won’t click with you either.

There’s no good or bad about this, either. I’ve come to believe that the general philosophy of breaking things down into smaller pieces and establishing simple routines really clicks well with some people – and completely doesn’t work for others. It happens to work for me, so I quite enjoyed the book. My wife, on the other hand, thrives on the complex – I wouldn’t recommend this book to her at all.

Regardless, The Power of Less is well-written, easy to pick up and read either all at once or in bits and pieces, and is simple and approachable enough that anyone can tackle it.

When I was young, my parents always managed to make ends meet, even though my mother was a stay-at-home mom (she had a less-than-ten hours a week part time job when I was in school, but nothing else) and my father worked in a factory. Sure, we were able to bring in a little extra money by fishing and we lived very frugally at times, but my parents were able to raise three children on the income of one factory worker.

Flash forward to today. That scenario is basically impossible. Virtually every family I know either has both parents working full time or one of the partners earning a very solid income. The idea that one parent can work a typical factory job while the other parent stays at home is pretty much a thing of the past.

There are a lot of reasons for this change. Many people will point to inflation, talking about how much housing prices have gone up since the 1970s without a similar increase in wages. Others will point to food prices.

For me, though, the biggest change is the sheer number of bills that a “normal” family has.

My parents, for example, had their mortgage payment, a payment on a used car (usually), insurance, electricity, and phone service. That was pretty much the extent of their monthly bills. They had their own well to provide water. They had a septic tank in the back yard. We had an antenna on our roof to watch television. We burnt our trash in a barrel.

Compare this to our situation. We have all of the above bills (minus a car payment, at least for the moment), but we also have a cable bill, an internet bill, a cell phone bill, a water bill, a garbage bill. Other families in a similar situation as ours have many more bills: a car payment, Netflix, a satellite bill, and so on.

This adds up to hundreds of dollars a month for services that my parents simply didn’t have or need.

What can be done about this? The first thing to look at is whether or not these bills are actually required, or if they just seem to be. Do we need internet access? I use it for writing The Simple Dollar, but we could survive without it by using the library (which is within walking distance). Do we need cable? Not really – we could just toss up an antenna, use a converter box, and still enjoy Lost. Do we need a cell phone? It’s nice to have during emergencies, but we could get a prepaid phone to take care of that need.

Right there, we’re saving more than a hundred dollars a month. If we lived in a more rural situation, we could utilize a well and a septic tank and eliminate our water bill, too.

What does this little exercise teach us? My parents were able to make different life choices because they weren’t constrained by modern expenses. Even more important, we don’t actually need many of these expenses – we choose to have them.

If you ever feel stuck in your financial situation or your life situation, take some time and look at your bills. Ask yourself how many of them you actually need – and how many of them your parents would have tolerated. You might find that many of those bills can easily be tossed without reducing your quality of life much – and when you do that, you free up a lot of after-tax money each month. That money can make the difference between having the stuff that you want – or living the life that your soul needs.

Good luck.