Merry Christmas! Today only, as my gift to you, you can get my new book The Sentimental Person’s Guide to Decluttering, free! Check it out HERE.
Author Archives: Claire
The Truth about Tiny Houses
Tiny houses continue to be popular, and I understand why people like them:
- They’re cute, and often cleverly designed.
- They’re good for people who want to live very simply.
- Since they’re on wheels, you don’t have to pay property tax on them.
- Since they’re tiny, they don’t cost much to heat or cool.
- They’re sturdier than a modern towable trailer.
- They’re cheap enough that you can pay cash and live mortgage-free.
Nevertheless, I can see some problems with tiny houses, particularly for those who are looking for a cheaper way to live:
- They’re very expensive per square foot. A new 20-foot long model (226 square feet including loft) sells for $62,950 or $279 per square foot. Consider that many nice small homes sell for $100 per square foot or less. (Of course, tiny houses can be cheaper if you build your own.)
- There’s little room for storage, meaning you can’t save money by buying on sale in bulk, nor will you have room to store the tools needed to make repairs or create things (ouch!)
- You’ll have to find a landowner who will give you permission to park your tiny house on their property.
- Tiny houses often have wooden exteriors, which will require regular maintenance to prevent weather damage.
Finally, there’s the fact that most tiny houses have upstairs lofts for sleeping, and they’re usually accessed by tiny ladders or steps. Being a woman of a certain age, I think I’d be courting disaster when making my routine middle-of-the-night bathroom trips down to the bathroom and back up to bed using a ladder. So tiny houses might be better suited to the younger set.
Nevertheless, tiny houses have been a popular topic for a few years now. No doubt the lousy economy has something to do with this surge in popularity.
Personally, I find that living in a small house with a basement solves the affordability problem very well. Our purchase price worked out to $84/per square foot (not counting the basement or garage). Our basement is finished, making it great for entertaining and useful for extra storage. And even though I can’t take my house with me when I travel like people with tiny houses can, I find that a well-appointed hotel room or vacation condo suits me just fine and makes a nice change of surroundings.
But that’s just me. If you’re convinced that a tiny house is the only way to go, why not rent one to see how you like it? It would be fun to spend a month in something as cute as this tiny house, and it’s in a lovely location to boot.
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:
- 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.
- 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.
- 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?
- 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.
- 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.
- 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.
- 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!
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 façade 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.