Category Archives: Debt-Free

How to Avoid Becoming an Involuntary Van Dweller

By Claire Posted in Clutter, Debt-Free, downsizing, Personal, Retirement, Simpler Living Tagged , , , , ,

Last time I mentioned imagining that you’re one of the many women following the trend of living in a van and making it their own little home as a way to become motivated to declutter. That exercise is also useful even if you don’t think you’ll ever have to downsize, because you never know what kind of curve ball life might throw at you down the road.

Many women will reach retirement age with very little in terms of support, but they don’t realize it now. Unless they’ve had a great job with wonderful benefits and managed to save up a sizeable retirement account (and/or will receive an impressive pension), they may find themselves on a very tight budget if their husband dies first (statistically likely).

Many women have been disappointed to learn that because their husband didn’t earn an above-average wage, they’re only receiving a small monthly stipend from Social Security, not enough to live on unless they’re debt-free and live very frugally.

One of my friends lost her husband to cancer when they were in their mid-50s. She had been a stay-at-home mom and still had one teenage child at home. She was shocked to learn that she couldn’t even get widow’s benefits from Social Security because she wasn’t 60 yet. Financial aid from one of her older kids is the only reason she’s not homeless now. Today she’s in her mid-60s and living on Social Security; her husband’s job didn’t offer a pension, and they never had any spare money to save for retirement because they spent it all raising kids.

So unless you have plenty of money waiting for you in retirement, now’s the time to reduce your expenses so that you don’t end up living in a van in your old age. Cash out everything you own that you don’t really need anymore. Find a more inexpensive place to live. If your car isn’t paid off, sell it and buy something less expensive.  Then take the money you save each month and sock it away for your retirement years. You’ll be glad you did.

Rental Cars and the Downsized Life

By Claire Posted in Debt-Free, downsizing, Personal, Simpler Living Tagged , , ,

Since we downsized our lives over ten years ago, we look at our belongings in a different way than we once did. Now, keeping things simple and keeping expenses down have become the determining factors in what we own and what we do.

Case in point: by moving to a small city, we don’t have to drive far for anything, yet we have most everything we need here so we can go a month or more without leaving town. Add in the fact that we both work from home, and the result is that we put very few miles on our cars. So we haven’t had to replace them; they are now getting a little long in the tooth, being 12 and 16 years old, with 85,000 and 130,000 miles on them, respectively.

Recently, the air conditioning began to go on the “newer” car, and the repairman says it’ll cost about $800 to fix it. Since the a/c still works well on the older car, I’ve been driving it around town lately. But when we’ve taken some longer trips this summer, we decided we’d rather drive something newer and cooler (literally) than our “newer” car. So we rented vehicles instead. (The car rental office is a mile from our home, so it’s quite easy for us to pick up and drop off rental vehicles.)

It will take several rentals to equal $800. A 2019 minivan with 6,000 miles on it cost us $210 for a week-long rental in June. A 2019 SUV with 17,000 miles on it cost us $130 for a three-day weekend in August. So we can enjoy a longer trip with a newer vehicle for a reasonable price and without adding miles to our own vehicles.

If we drove new cars all year long, our car insurance bill would be quite a bit larger than the $500+ we now pay for one year of driving two old cars. But it doesn’t matter how much you pay for car insurance as long as you have it when you go to rent a new car. So we enjoy a low car insurance rate all year, and new cars when we travel.

I should point out that those affordable car rental rates are due to our Costco membership. We get quite a discount on car rental rates by going through them. See https://www.costcotravel.com/Rental-Cars for more details.

Replenishing a Savings Account

By Claire Posted in Debt-Free, Personal, Simpler Living Tagged , ,

As I mentioned last time, we have a savings campaign going on in our household. If we can stick to it, we will hopefully begin to fill the $5,000 hole in our savings account while enjoying the logical byproduct of less clutter in our house.

Next month marks 17 years since we paid off our previous house and became officially debt-free. We have only been able to stay that way by the grace of God and by living simply. A savings account also figures prominently, because when you’ve committed to being debt-free, you must have some cash set aside for emergencies of all kinds, whether it’s a $100 repair to your car or a $3,000 furnace because you like to stay warm in the winter.

We save any windfalls, dividends, tax refunds and other cash infusions that may come our way, and we’ll continue to do that. But in addition, this year we’re trying something else to help rebuild our savings account.

Recently I saw a chart in a newspaper ad for a local credit union. They’re offering an account similar to a Christmas club account; for those who aren’t old enough to know what a Christmas club account is, it’s when you deposit a specific amount in a special bank account every week so that by Christmas, you have a nice chunk of change with which to buy Christmas gifts without using your credit card, therefore not going into debt.

This account is a little different. You pick a day of the week and commit to making a deposit into the account on that day every week for a year. The first week you deposit a dollar. Easy enough, right? The next week you deposit $2, the next week $3, etc. By the end of the year, you’ll be depositing $50 or so a week, but you’ll end up with a balance of $1,378 plus interest.

We’ve decided to follow this plan. We’ll probably feel those $50+ deposits at the end of the year, but that’s my husband’s busy season, and my books usually see a bump in sales in the fall and winter anyways, so those deposits shouldn’t be too painful. Besides, it will feel good to know we’re making headway on rebuilding our savings….hopefully before something else breaks around here!