Wednesday, July 9, 2014

Creative Retirement: 7 Reasons to Sell Your Big House…Now!

Although financial experts urge us to think about retirement soon after we begin working as 20-somethings, most of us don’t think very much about retirement planning until we reach a certain age…you know, once we start feeling that age, with the usual aches, pains, and thoughts like, “They stopped recording good music in the 70s.”

The fact is that most people don’t like to think about planning for retirement. And with all the experts out there insisting we have to have at least $1 million saved up (right, that’ll happen for most of us), who can blame them?

But there’s one thing you can do right now that can only help your retirement plans: sell your big house. A big house is nothing but a burden to anyone in their 40s or older. Here’s why you should sell, now:

1) A big house requires many hours of your time paying for it and keeping it up, hours you could be spending on the golf course or reading good books.

2) A big house usually means higher taxes, costing you dollars that you should really be putting away for retirement, especially if you have no pension or retirement account to speak of.

3) A big house encourages your adult kids to move back home, or to never leave in the first place. Times are tough, I know, but how will they learn to cope if they have your basement to hide in?

4) A big house lets you keep the clutter instead of dealing with it. One reason people postpone freedom in the form of downsizing their lives is that they don’t want to go through their possessions and make decisions about what to keep and what to give up. But if you don’t do it now, the job will just hang over your head until you (or your heirs) are finally forced to deal with it.

5) Big houses aren’t as popular as they used to be, thanks to smaller families and a lousy economy. Sell now so you don’t take a bigger loss down the road.

6) Big houses are often two-story or multi-level houses; at some point you’re not going to want to deal with stairs, or you may not be able to. So it’s unlikely that you’ll want to stay in the house in your old age.

7) If you have enough equity in your big house, selling it and using the proceeds to buy a small house, townhouse or condo will let you face future retirement with a paid-for abode.

I think that last point is especially important if you don’t have a pension waiting for you. The biggest item in most budgets is the mortgage payment or rent. Imagine not having to pay that someday if you have only a modest retirement income to live on!

Friday, June 20, 2014

Embarrassed by Downsizing?





We recently saw some distant relatives at a family gathering, people we hadn’t seen for years. One asked my husband why we had moved from our big house in the suburbs to a small house in a small town.

One of the things I love about my husband is that he’s honest and direct. He simply replied, “After my industry moved overseas and I had to close my business, we couldn’t afford to live in our area any more.”

Simple enough, right? But it’s very hard to admit that despite your best efforts, things aren’t going well financially. The responsible way to handle things is to be proactive and downsize willingly, before you’re forced to sell everything just to keep the electricity on. But there’s a huge temptation to pretend like nothing has changed.

It’s dangerous to live in denial. Many people face financial difficulties in these hard times, and some actually make things worse by using credit to continue a lifestyle that they can no longer afford. Even when they reach the end of their rope, and are finally forced to downsize to a smaller house and/or a less desirable area, they may try to keep the fa├žade going by putting a little spin on the situation (“We sold our house because we’re going to travel a while before moving to the Hamptons.”)

Being honest about your situation means you don’t have to wear yourself out pretending that nothing has changed. You also free others who are having financial challenges to be open and admit that the smart thing for them to do right now is to downsize. Your example can show them that there’s nothing to be embarrassed about and that life goes on…..a happy life, too.

Years ago, I would occasionally see bumper stickers on cars that said “Don’t laugh. It’s paid for.” I’ve thought about putting a little sign with that slogan in my yard (don’t worry, my husband would never go for it!) But we love our little house, and we’re happy with it. No, we don’t live in the McMansion anymore, and we don’t live in the suburbs, either. But I’m being completely honest when I say we’re fine with that. Downsizing our life has actually made us quite comfortable. And we don’t care who knows it.

Thursday, June 5, 2014

The Burden of Collections


I love going to estate sales.

I love rifling through books from long ago. I like to see juice glasses like the ones my grandma set on her breakfast table, and framed pictures like those people had in their homes when I was little.

Since we downsized, I’ve learned to admire these things without buying them, because we simply don’t have the space for them. If I should find something I absolutely must have, I’ve promised myself that some item I currently own will have to leave the house before the “new” (to me) item can come in. That’s the only way I can stay on top of my possessions and not let them get out of control, as I once did.

Recently I went to the estate sale of an elderly lady. It was held in her 1930s frame two-story house, and run by a group of tired-looking middle-age women that I assumed to be her daughters and/or daughters-in-law, because they kept referring to “Mom” in their conversations.

They had done a great job of setting up the sale, and what a job it was! All through the house were tables covered with tablecloths and neatly arranged items for sale. I could barely walk around the L-shaped living/dining room full of tables without bumping into someone or something. Every surface was covered with stuff.

There had to be at least five long tables of glass and ceramic figurines, all neatly arranged and shiny, as if someone had recently cleaned them (what a job!) Along one wall was a long display of costume jewelry, many pieces in their original boxes, all priced individually. There were also tables with lamps, glass and metal ashtrays (remember them?), wall plaques and artificial flower arrangements. There was no furniture except a few chairs for the sellers to sit on; the furniture must have already been distributed within the family or sold before the sale.

The kitchen was packed to the gills with dishes, pots, cooking utensils, and other kitchen items, many with mushrooms on them. Apparently “Mom” was into the 1970s mushroom craze and had amassed quite a collection of mushroom-decorated items.

The rest of the house was filled in a similar fashion, with various collections displayed neatly and price tags on each item. I can’t imagine how hard those women worked to get that sale ready. But I have to wonder how they really felt about all of Mom’s collections because no one seemed to be choosing many of those items, buying more useful things like lamps, yard tools and clothes instead. If they didn’t mark down Mom’s collections toward the end of the sale, they were likely left with the items and more decisions to make about what to do with them. Ugh!

I once had quite a few collections myself. When we downsized, I still liked my collections and didn’t want to give them up. I put off making decisions about them for a while (there were certainly plenty of other things to do at that busy time anyways) until it finally occurred to me that there is no law that you have to keep a collection together, and that if I was honest with myself, I really preferred some items in my collections over others. Hence it was OK to break up my collections.

Once I made that realization, I could finally do what I needed to do. I reduced my teapot collection from dozens down to three. I reduced my enormous collection of back issues of Country Living down to one small stack of clippings after committing to flipping through a few issues while on my exercise bike each night and tearing out anything I just had to keep. I did the same thing with my many quilt magazines, some of which had been published in the 1980s (!)

Both my husband and I have always been bookworms, so we had hundreds of books, maybe more than 1,000 counting paperbacks. We gave up about 2/3 of them.

I won’t list my other collections that were broken up; to be honest, I can’t even remember all of the stuff we got rid of! But I’m doing just fine without it, and someday when I die, my kids won’t have to go through all of it like that elderly lady’s family did for her estate sale.

I sure felt sorry for those gals.

Friday, May 23, 2014

Why My Profile Photo Looks Like Carlotta Vance



I chose Marie Dressler as my profile photo (see right column of this blog) in homage to her character, Carlotta Vance, from the classic 1933 film, "Dinner at Eight."

Carlotta is a woman who once had fame and fortune, who knew what it was like to live in luxury. But in the movie, she is no longer young and beautiful, no longer pursued by men who want to woo her with furs and diamonds. In fact, as her career wanes, she finally reaches the point where, as she tells her dear friend Oliver Jordan, "I haven't got a sou!" Yet she faces life with courage, concern for others, and as you see in the clip above, a sense of humor.

The character of Carlotta is a role model for me. Over the last decade or so, the lousy economy has dealt my family some hard blows. We lost a business and had to sell our family home. Our income is nowhere near what it once was.

It's often tempting to feel sorry for myself, and sometimes I do. But most of the time, I want to be like Carlotta. I want to face the future with a sense of hope and charity.

In that spirit, I wrote Downsizing Your Life for Freedom, Flexibility & Financial Peace. It's had a good response, and I'm grateful. Now I'm writing another book related to it that I hope will also help and encourage others.

Times are challenging for many people these days. I want to help my readers by sharing what my family has learned, and by telling everyone that being proactive about change, especially change you didn't ask for, is the best way to get through hard times and keep enjoying your life.

Thursday, May 8, 2014

Where Should You Go When You Downsize Your Life?



For some, downsizing their life is simply a matter of finding more affordable and smaller digs within commuting distance of their job. But if you don’t have a job or you’re about to lose yours, it’s possible you may need to find a new town to live in, possibly even a new state.

Yes, I’m aware of the increasing number of ex-pats out there (people who have left the U.S.), But I’m assuming most people, like me, want to stay in this country. They just need to know how to find a good place to live that doesn’t cost as much as where they live now.

I shared a great tool for discovering your perfect new town in Downsizing Your Life for Freedom,Flexibility and Financial Peace. Now I have two great links to share, which I’ll probably have my publisher add to my book, but that you can check out right now.

First off, here’s a wonderful document (PDF) that lists all the metropolitan areas of the U.S. in order of affordability. What a find! It starts with the most expensive areas. We moved from page 1 to page 5, making our lives so much more affordable in the process. Find your current town in the document and start looking further down to see where you might go to make your life easier, financially and otherwise.

Then, if you’re wondering where other people are moving, check out this amazing interactive map, which shows who’s moving where and what the per-capita income is in every single county in the country. Be warned, though, you can waste a lot of time playing with this, it’s so interesting!

Tuesday, April 29, 2014

Moving Back In with the Folks? Eeeek!



Oh, the joy, fear and excitement of leaving home to go off on my own. How well I remember it, even though it’s been, um, a while.

Once I was on my own, I couldn’t imagine moving back home with my parents. So when I read this article about how the economy is forcing some adults in their 50s and 60s to move back in with Mom and/or Pop, I was both alarmed and sympathetic.

But when you think about it, it makes sense. Wages are stagnating but costs are rising. It’s been this way for several years, and something’s gotta give. If moving in with the folks keeps a roof over your head, what can you do?

Most people won’t be “moving back home” anytime soon. But to make sure it doesn’t happen, we need to be realistic about our personal financial situation. Are we facing layoffs at work? Are we barely making it on a pension? Do we see lower income but bigger bills in the future?

You have to be honest with yourself. If you refuse to face reality, you’re only postponing the pain, and you may be making it worse, in the long run. But if you make the tough decision now to downsize your life, and make your bills (and your lifestyle) more manageable, you may be able to avoid the fate of those who are moving back in with their elderly folks.

We downsized after an income loss and came through in much better shape than we expected. Life in our McMansion is just a good memory now, but everyone once in a while I look our old house up on Zillow to see how high the property taxes have gone, and think about how we dodged a bullet there. Even the $300+ monthly electric bill is just a bad dream. Best of all, we’re now so comfortable that the thought of moving in with my folks (who are still living and just as hard to get along with as they ever were!) doesn’t even turn up on my radar.

My motto is: Bite the bullet and do what you must so you don’t end up sleeping under the watchful eye of your Bobby Sherman poster ever again!

Tuesday, April 22, 2014

Small House Regrets?



If anything could make me regret downsizing to a small house, Easter would have. And it almost did.

We can squeeze eight people into our eat-in kitchen. Our growing family now numbers 16. You do the math.

By Good Friday, I was thinking about putting up a table for eight in our living room (which would require moving furniture out of there first). The living room isn’t connected to our eat-in area, so it would be like having two separate parties. Bummer.

We couldn’t use the finished basement like we usually do because it’s so darn cold down there right now (it was a long winter) and Grandma and Grandpa get too chilled in the basement even when the rest of us think it’s comfortable.

So, thoughts of “What were we thinking buying such a little house?” began to surface.

But here’s the thing. We love this little house, and 95% of the time, there’s more than enough space for us. It’s only when the entire family gets together that it feels a little too cozy.  

All year long, I enjoy the low utility bills.
All year long, I love that it only takes me a few hours to clean the entire house.
All year long, I enjoy the mental freedom of knowing that we have no mortgage. (We chose a small house so that we could remain debt-free.)

Weighing those things against a little coziness made it clear that we were thinking just fine when we bought this house. But in the end, it didn’t matter. We had our first 80-degree day of the year on Easter Sunday, so we were able to have our family gathering under a canopy on the patio. What a lovely day!