Tag Archives: debt-free living

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!

Decluttering, Denial and Retirement

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

(The third of three posts on Decluttering and Denial.)

We were pushing 50 when we were forced into downsizing our lives. Our kids were going out on their own, and while we still had a few years before the younger ones left home, it was clear that we no longer needed our 5-bedroom house. Empty nests don’t need to be that big.

So we discovered the freedom of living small, and we love it. But the act of giving up so many belongings, and moving to a much smaller house (so long, two-story foyer and giant master suite) made perfect sense for a couple heading toward retirement age. That said, accepting that we were that couple was kind of hard. I much preferred to think of the whole exercise as a prudent financial move than something that was appropriate for people our age.

The fact is that most people our age don’t have unlimited funds. Buying ever bigger houses and nicer furniture, and redecorating every few years, is fine for millionaires, but for us normal people, well, we don’t have that kind of money. For those of us who lost livelihoods in the lousy economy of the 2000s, it’s imperative that we live carefully, even frugally, because we don’t have a big, fat retirement account or pension awaiting us. We put everything into our businesses and our families, and now that those are gone, we need to look out for ourselves.

But those who are in denial about the fact that they’re nearing retirement age, and live like they’re still young and amassing houses and possessions, are putting themselves in danger.  It used to be common sense that you paid off your mortgage before retirement so that no matter what happened, you’d always have a roof over your head. Now people are retiring with mortgages, multiple car loans and several credit card accounts nearing their limits. Retiring on a fixed income with that kind of debt load is a recipe for disaster.

Denying what I see in the mirror, that I am getting closer to retirement age, would be an exercise in futility. Time marches on. Those of us who can admit that and make the tough decisions that will minimize future pain (including decluttering and downsizing as well as paying off debt) are doing ourselves a big favor. Those who remain in denial had better have ample retirement funds.

Is Downsizing the American Dream a Bad Thing?

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

An article posted at TheAtlantic.com laments the findings of interviews and surveys that show that an increasing number of Americans, particularly young Americans, are more concerned with hanging on to what they have than moving up in the world, and are also more interested in becoming debt-free.

Clearly this is a reflection of the stagnating economy that we’ve been dealing with for many years now. Young people in particular are overloaded with debt, especially student loan debt, which keeps them tethered to whatever job they might have and limits their ability to buy a car or house.

One thing missing from the article, however, is that many of these young people saw their parents overloaded with stuff, and the debt that comes from buying more stuff than you can afford. They grew up watching their parents buy houses with three-car garages when they only had two cars, just so there was more room to store their stuff. They watched them clean around all their stuff and lose spare rooms to all their stuff. And of course in extreme cases they saw them hoarding stuff.

The real theme I see in this article is that people want freedom. They want to be free of debt, and they don’t want to become loaded down with stuff they have to pay for, for years to come.

They also want affordable housing, but not necessarily impressive housing. Note the survey reference to owning a nice home. In recent years, “nice” meant “bigger and more impressive than your friends’ homes.” Given the survey and interview responses, perhaps “nice” can go back to meaning “affordable and comfortable.”

The sad tone of the article could use a little optimism. The fact is that downsizing your lifestyle can be freeing. Moving to a smaller place means you spend less time caring for your home and more time doing things you’d rather be doing. Moving to a more affordable place means improving your financial bottom line, and maybe even helping you become debt-free.

Yes, it can be painful to go through a downsizing of the American Dream. It sure hurt when my family was forced to go through it. But it only hurts for a little while because the freedom you gain is so worth it. Eleven years on from our involuntary downsizing, we are thriving, and enjoying debt-free life in a small, nice home.