Category Archives: downsizing

Small House Regrets?

By Claire Posted in downsizing, Small-House Living Tagged , ,

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 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. In the end, it didn’t matter. We had our first 80-degree day of the year, so we were able to have our family Easter gathering on the patio. What a lovely day!

Moving Back In with the Folks? Eeeek!

By Claire Posted in Debt-Free, downsizing Tagged , ,

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 (let’s just say it was back when James Taylor still had a full head of hair).

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 financially 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 Donny Osmond poster ever again!

 

Downsizing for Freedom

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

Our downsizing experience was driven by a desire to regain financial peace, but another by-product of it is that we gained a lot of freedom.

Did you know that freedom is scary? At least it is after years and years of falling into a familiar pattern. In our case, we always had to live near my husband’s job. Even after he started his own business, we had to stay in the area because that’s where his contacts (potential clients) were. This meant that we lived in the same metropolitan area for nearly 30 years.

Then economic change reared its ugly head, his business closed and we had to find a new place to live. Where? Anywhere. Sounds great at first, but for us, having far too many choices was scary. How do you determine where to go when you don’t even know how to support yourself anymore?

We did have a couple of small Internet-based businesses, but we could live anywhere we could get Internet access, so that didn’t really help us narrow down our range of choices.

In the end, we chose to move to an area where we often went on vacation. We rented a lovely house (quite cheaply because we were signing a one-year lease instead of a summer lease), and figured we would eventually buy a house there. But while we loved living up the road from the beach, we learned that it was not the right place for us to live full-time. The natives weren’t very friendly to outsiders, and we got lonely.

We ended up leaving after two years, and we did so easily because we had the flexibility of being renters. The experience helped us see that our ensuing freedom was quite wonderful. Having had a few years to think, we were ready to take advantage of that freedom. We traveled to different places, looking for a new hometown, and finally found one.

That was over ten years ago. In the new town, we rented a lovely restored house from the 1920s. Both of us had always wanted to live in a historic house, but we weren’t crazy about the time and money involved in restoring and keeping up one. Instead we got to spend two years in an absolutely beautiful old house, and whenever something went wrong, we just called the landlord. Now that’s freedom!

While living there, we got to know the town and its people, and found that we were comfortable with both. When the landlords told us they wanted to put the house on the market, we used our recently gained knowledge of the town to find and buy a very small house in a great neighborhood for cash. Our utility costs (and our property taxes) are quite low, giving us the freedom to live on a relatively modest income in comfort. Should we decide to move elsewhere, this house shouldn’t be hard to sell, or we could rent it out for a few years. That flexibility, in addition to the financial peace we still have, is due to the freedom we found by downsizing.

 

Downsizing for Flexibility

By Claire Posted in Debt-Free, downsizing, My Books, Personal, Small-House Living Tagged , , , , , , ,

As I said in my last post, for years I’ve kept a record of how much money we spend each month and each year. It includes categories, which is very helpful because you can see which categories are becoming too large and eating up too much of your money.

In our case, it was obvious which category was becoming too large, and its growth was beyond our control: housing.

The irony here is that we had paid off our house several years earlier. But the property taxes had been going up from 5-10% annually, and were approaching $600 a month. My husband’s business was declining, so the bulk of our income was shrinking. Once he had to close the business, how would we pay nearly $7000 a year in taxes? (Since he’d worked in that industry for over 30 years, he wasn’t trained to do a different high-paying job; $10 an hour at Home Depot was not going to be enough to cover our expenses.)

We didn’t want to risk losing our paid-off house because we couldn’t pay the property tax, so the issue of downsizing finally became very real for him as well as me. We had to find a cheaper place to live; once we did so, we could figure out the income side of the equation.

Downsizing wasn’t an easy decision, even though it was an obvious one. It meant moving away from nearby family and friends because we had to go some distance to find housing that we could afford in an area that we knew and liked. But doing so gave us a lot of flexibility in terms of figuring out what to do next.

If you’re in this position, or suspect that you are, you’ll need to crunch numbers even though you already know you need cheaper housing. Find out just how much money you spend each month vs. how much you earn; then you can determine the number that qualifies as an affordable housing cost for you.

It’s possible that you can find more affordable housing nearby. If housing costs aren’t exceptionally high where you are, you may be able to go from a big house to a smaller one, or from a house to a townhouse or condo.

Another option is renting. That’s what we did, and I must say we enjoyed the break from homeownership. Renting is also a great way to buy time while figuring out your next step.

Whether you buy a more affordable home or rent one, trying to put yourself in the black (or stay there) is always a good thing. Earning less than you spend is the only way to find financial peace; it’s worth whatever changes you have to make to your lifestyle.

Making those changes is where flexibility comes in. Releasing yourself from high costs gives you the flexibility to move anywhere, work anywhere, live anywhere. As you consider the possibilities, you realize that downsizing isn’t just about finding a cheaper place to live. It’s about changing the path that you’ve been on for years to do something different. I share stories in my book about people who have been able to pursue their dreams once they realized they had to downsize their lives.

So many people find themselves trapped in order to maintain their lifestyle. By downsizing, you’re no longer tied to one way of living. Even if your housing costs aren’t climbing like ours were, or if they are but you can afford them, downsizing might let you switch to a career you like better that pays less, or move to an area where loved ones await.

The flexibility that lets you consider such possibilities is a wonderful by-product of downsizing.

Next: Freedom