Showing posts with label frugal positioning. Show all posts
Showing posts with label frugal positioning. Show all posts

Wednesday, January 16, 2013

Preparing for Retirement: Get Your “Stuff” Together

Just a small reminder that it really is a dog's life, and we just think we're in charge!  My son actually thinks this is his bed, but the dog of course, knows better.

Over one year ago, I finished losing seventy pounds.  At that time I cleaned out much of my closet.  What I have not done (at least not yet) is buy any new clothing.  Put simply, I haven’t needed anything.  Some time back, I mentioned that I may never need to buy clothing again-as some readers joked at that time,  that was surely an exaggeration.  Yes and no.  While I may see clothing that I WANT in the future, the truth is that my only “mandatory” clothing expenses have to do with planned obsolescence. So far, that has only including what someone once joking referred to as the underwear disintegration effect.  Obviously this will change, as my goal is to lose 62 pounds by my 62nd birthday.
In the past, many retirement bloggers have waxed eloquent regarding the so called experts estimation of the amount needed to live on in retirement.  I, as well as many blogging friends see the minimums as awfully inflated. While there are many reasons one may have lowered or equal costs in retirement, one of the many reasons some folks live on less in  is that they have the “stuff” of life.   Much of that stuff is acquired through the normal paths of life.  Sometimes though, it is worth looking ahead to retirement and making some investment purchases ahead of time (or in the early years of retirement).
Obviously your ability to anticipate future needs depends on how much you know about your retirement plans.  I'm also not suggesting that we take money away from retirement savings per se.   If you feel  fairly confident about future activities or living situations, it MAY be worth your while and your money to direct some income towards these kinds of investment purchases.  My in laws committed many years ago to retiring in place. This means that they spent some money on their home, both making it energy efficient (to lower monthly costs) and preparing the house for needs later in life.
Before my husband passed away, we were beginning to think about post working world decisions. We knew we wanted to travel.  My husband was a black trail skier, and lived for golf. He had begun slowly investing in good quality but basic equipment (especially since were in sporting goods heaven). I did the same. Because we knew we would be cooking a lot more in retirement (we ate out a bunch when my son was in high school, we were both working and between the three of us we had six hobbies each), we bought a few things that would make said cooking easier and more fun.  I’m not talking  restaurant quality, but we knew a good mixer and such would increase our enjoyment of cooking. We knew we were retiring to different climes, so we would have started developing a "southern United States worth" wardrobe.
For myself, living on a fixed income is much easier and more enjoyable because for the most part I have both what I need and what I want.  Whether I want to cook or can, take a road trip tomorrow, work in the yard, or quilt, I rarely need to spend money except for on so called “consumables”.  Mind you, that doesn’t mean that I don’t see things that I occasionally want to buy-just that those purchases are rarely required.  This means that beyond the so called monthly bills most of my money is free to spend on the needs/wants of life-be it groceries, fabric, hotels, or entertainment. It works for me.

And speaking of cooking, tonight was one of those days when I threw everything in the slow cooker.  While I wouldn't call minestrone junk soup, it's a very flexible dish. Today I used kidney and canelli beans, lean ground beef, crushed tomatoes, vegetables and lots of broth and seasonings.  Add some popovers and there you are. Tomorrow I'll add more vegetables (perhaps spinach) to the second showing-and when I make it next I may add pasta as well.

This evening, I'm preparing to finish my large quilt and have valentines coasters and treat bags on my sewing table.  I've just watched Top Chef (and am muttering to myself).  I'm also limping around the house, because after a week of what the many of you call normal winter weather, my knee simply says "ouch!".  Colorado will certainly require some preparation if that is my end destination.

Wednesday, September 5, 2012

The Accidental Retiree..................

I came to this so called "retirement" indirectly.  I'm sure I'm not unique.  In 2005 and early 2006 I was a fifty-something at home spouse looking to be an empty nester in a year or so. My expectations at that time were five to ten more years of a working life and then a frugal albeit comfortable enough retirement. In fact, my husband and I had discussed retiring in Europe extensively (anything we would have lost through taxes or exchange rate would have been returned in spades because of the medical system and ease of travel).

That is not how things progressed.  This is in no way a complaint, just an observation that I got where I am now through accident of circumstances, rather than planning or conscious decision making. Widowhood and the mandate to change locations quickly required some down and dirty and emotion based decisions.  Follow that by the lack of job opportunities and financial disaster.  Mix in  few other normal life events and there you have it.  I am where I landed but after all this time I'm still not sure if I'm where I'm meant to be planted.

Previously, I've talked about my financial planning and decisions.  In spite of much thought and numbers crunching I've been unable to make financial or housing decisions for my future.  In this past week or so, I have realized that I may be going about this in the wrong way. I believe that I need to figure out what I want my future to hold and the financial situation will follow (one can only hope).

Obviously it's an ongoing process, and I'm still working that process. I have come to some conclusions (I hope) and more will follow. Since I always try to share the reality of frugal retirement on my blog, here are some of my thoughts in no particular order.............and with no conclusions drawn so far.
  • I love my house. I love that I have a single level (no steps, even to the front door) open plan house. I don't need all the space I have, but I love it none the less. There is nothing I don't like about my house.
  • I truly enjoy my small business and income streams. I would NOT want a real job (read, dress up and go to an office and answer to someone else) under any circumstances. I also would not want my hobby/job income to be necessary for life in the long term (but would not object for a year or so if it would bring long term stability)
  • I'm a laid back retiree/person at heart. I need lots of  free time for spur of the moment "stuff". For example, while I've learned that I love learning new things, full time school is no more right for me than a full time job. I need time to read, smell the roses and daydream. If I want to spend the day canning tomorrow, I want to be able to decide that today.
  • I don't love my yard, or my neighborhood. Please understand that I don't hate my neighborhood. People move here because of he gigantic high school and the gigantic football stadium and any retirees are empty nest folks who moved here for that reason. I'm used to an extremely diverse, multicultural and multi age lifestyle. This is the same reason I'm not interested in living in a "retirement" or fifty plus community.
  • In the same vein as the above comment, I'm not used to living in an outer suburb where one has to drive everywhere.
  • Sometimes we live in a catch 22 situation. I have a forty thousand dollar downpayment invested in this house, and with current housing costsi n denver I would reap that if I sold. However, with no savings, I don't have the money to repair the foundation, meaning that I would need to sell it now as is. It's a conundrum.
  • I love my dogs. When these guys leave my house (and I have no idea if they will remain with me or go with my son), I don't know if I will have another furry family member. But any home I have will need to be dog friendly. Letting the dogs go is not an option, for financial or other reasons.
  • Travel is important to me. I don't need to take a cruise, or even fly to Europe. I do need three or four long vacations a year-road trips or otherwise. I also need some day trips and overnights throughout the year.
  • Church and it's attendant social activities are important to me.  More than that, the right church is important to me. I drive over twenty minutes (on the freeway) to get to my current church. In an ideal world I would like to be closer to a progressive church who considers outreach it's primary mission.
  • Being able to volunteer, both in terms of time and finances, are important.
  • In theory I can live in any climate, but the reality is that if I live in Denver or somewhere else, I would be a hermit for a quarter of the year. My knee issues are not cured by surgery, and cold weather makes them more painful.  On the other hand, it would be nice to live where it wasn't triple digits for three months. Since I'm not going to be able to live a snowbird life, per se, this is an ongoing discussion with myself.
  • If I didn't live in Dallas or closer to family, my perfect life would be Texas Hill country in a walkable town, or along the coast.
  • When I hear that my sister went over to my brother and sister in law's for a barbecue or to see a football game, I have to admit I feel a pang. I don't have that kind of relationship with my in laws although we do get together for holidays and special occasions. I would love to be able to visit my sister or brother every week or so.
  • Housing is more expensive in Denver, period. My 2300 square foot house built in 2010 would be $300 thousand in Denver and cost me $180. As for the rest, I don't know.
  • I cannot plan my future based on my children. I can commit to a house with enough space that kids can "come home" and let them know they are always welcome. Other than that, my son has to take responsibility for himself as best he can, with non financial help from me.  The economy is the economy and there is no easy way to deal with that. I can help him in any way but with money, and he will always be welcome to live where I live. I'm not planning my future lifestyle based on his needs, however.
  • Although I need a place to live, a "home" if you will-I see no reason that it has to be this house, or even a house.  For me at least, from my perspective, my home is neither a financial asset nor an investment. Had I lived here for five more years, it might be a different story.
  • Finally (and I've said this before), I want to run my home, not for my home to run me. This means I am unwilling to be house poor in terms of time, money, or effort.  As I mentioned at the top, I love my house. Even so, I'm unwilling to spend every weekend on upkeep and every penny on improvements.  Many folks (including my late husband), would consider that heaven, or at least acceptable. That's not me, and pretending it is simply will not work.
Well, there you have it.  As I said, this self reflection is an ongoing process and any conclusions will come slowly. I hope that my next move or major lifestyle adjustment is well thought out, as it may well be my last. I'm sure more thoughts will follow.

As always, I'm interested in your opinions, thoughts and experiences.  Armchair recommendations, anyone?

Tuesday, June 5, 2012

Long Term Plans- Positioning For Retirement(Part I)

Traditionally, I am not a goals person. Regular readers of this blog know this well. I tend to be a seat of the pants kind of person, making a few loose commitments and playing life by ear. It's not that I don't like to be "doing" or "going", it's just that I don't like to commit to doing so far in advance. This is true whether its creating items to sell, working around the house, even travel.

That said, the time has come for me to make some long term plans.  Time to make a one year plan and a five year plan, if you will.  Why do this, you may ask?  The short answer is, because I am that seat of the pants person much of my life. To borrow an overused phrase, it's time to "position myself" and take the steps to get me there.  I need to know that I can do and have the things that are important to me, without worrying about how I will get there.  I also need a life with more time for me, and less time for house and it's maintenance (physical and financial).

To that end, I have made one major decision, from which all others will lead, if you will.  The bottom line is that it's not reasonable to keep this house in the long term. At this point in my life a "paid off house" is probably not in my future, at least at this location. I love my house. However, the maintenance is too much (both in terms of physical and financial cost). I am not a do it yourselfer, although I am learning new skills all the time. While I love so called traditional home making skills (sewing, canning, many other things), I don't love cleaning my 2400 square foot home or making repairs on it. I don't love (and cannot handle) maintaining the lawn, and eventually my unemployed child will find a job and I will have to pay to have someone else do it. Most importantly, I don't love the fact that my housing costs (mortgage, taxes, homeowners) is between a third and half of my income (without the extra income streams).That's before maintenance, improvements and replacement costs.  This does not mean that I will sell my house tomorrow. It does mean that I am investigating a sale within the next year, and that anything above basic maintenance for said house is not on my radar. Ideally, I would like to clean up my credit and have a years worth of quilting income (as shown on a tax return) before I take the next step. It means that I am concentrating on downsizing, organization and perhaps even placing other bills and debt above the house. Remember, I'm in the first investigational/planning stage here.

While I enjoy the things I do for extra income, and they have in some cases been incorporated into my lifestyle, I don't want to HAVE to do them. I certainly don't want to HAVE to do them until I am 70. At the same time, I want to be comfortable. If I want to take off for a couple weeks, I want to be able to tell myself yes. If my church has a mission to Honduras again (where everyone pays their own travel expenses) I want to say yes.  While I have had financial disaster the past few years, I am blessed to have a regular, guaranteed income each month (pension and social security),  extremely good health care and family and friends. I would prefer to base my life and lifestyle on these givens, rather than maybes.  This does not mean that I want to make my life smaller (as one blogger  once described it). I want to make my life at least as large or larger. To do that may require some shrinkage in some areas.

At this point in my plan I have a lot of questions, a few plans to make and lots of ideas.  Questions such as, is it more important to be close to my siblings at the cost of crippling weather and a higher cost of living, or closer to my children (whom I will see less) at a cheaper cost of living and much, much warmer weather.  How do I reconcile wanting my kids to have home to come home to for holidays with my need to have a lower cost of living?  Rent or buy something smaller (both tough in my financial straits with poor credit). Stay in the Dallas area, or move further south towards the "hill country" of Texas (with warmer weather and out of tornado alley). These are just the beginning of my questions.

In the future, as I work on my plan bit by bit, I will be blogging about these other decisions and plans (and sharing more than a few more questions). I need to research housing and lifestyle options. I'll need to decide what if anything to do to my house in terms of sale value (not much since I have no income).  Assuming the house sells for what it is worth, I'll need to decide what to do with the fifty thousand dollar down payment when it is returned to me after a sale-and what will I do if the house sells for much left.  Will I need to downsize? Am I ready to move to a new location and make new friends all over again?

Hopefully the answers will come, and when they do I will share them with you. Be assured that while I will be blogging about my plans as well as looking for advice, I will continue to blog about regular frugal retirement issues, and retirement issues in general. After all, life changes from day to day, and that's what this blog is all about.

Monday, June 20, 2011

Fixed Income Living-Positioning Ourselves For Retirement

Recently I’ve begun to take steps to position myself for a successful life on my fixed income. Positioning is an important part of planning for our retirement lives. It’s especially important when income is restricted, be it in retirement or another time. Positioning allows us to plan our lives so that we get the greatest reward with (hopefully) the smallest expenditure.

After spending too much time on auto pilot, I’ve decided that I may never have another “real job” at this point in life –although I do anticipate income streams. I’ll be truly living alone (for the first time) soon as my college student leaves home. All this means that among other things I’ve been crunching numbers, evaluating circumstances and deciding what I want to do “when I grow up”. As I look to turn sixty, I will begin to receive my husband’s social security benefits. Until now, I have been living on drained, almost gone savings and a very small pension. While my income will still be limited, it will be regular and allow me to make plans and have a base budget from which to work.

For me at least, these positioning decisions involve many areas of my life. The main decisions to be made for me (and for most folks, I expect) are financial, with housing being a primary consideration. After all, housing costs are usually the biggest part of our budgets, and home is where retirees and the unemployed spend a large amount of their time. Within that housing umbrella fall housing costs, the makeup of the abode itself, and the location. All are part of the same whole, and everyone has different needs.

As I said before, housing costs are a large part of the budget, and keeping them in control and reasonable allows us more disposable income in other areas. Some of us do that by downsizing, some by having paid off our mortgages early, others use other methods. In my case, I have a mortgage

Equally important is the house itself. Do we want to have to worry about getting up and down the stairs later on? Is it too big to clean? Do we have raking and shoveling and mowing taking up all our time? Will family be visiting often? Maybe we have hobbies that require space. My current home is a single level, fairly new house in a low cost of living area. Right now those things are important to me. Others may choose to have no yard, or live in a place where all of that is handled by an association.

General location counts for a great deal, both in terms of climate and convenience. Do we need to be near an airport so that family can visit? How important is climate in our decision. What kind of environment to we prefer. Do we want all folks our age, or live with a variety of ages, cultures and ethnicity? Are we willing to drive for basic services, or do we want them right around the corner.

After some time, I’ve come to a two tiered answer to many of these questions. Eventually I will want to do some serious downsizing both for financial and physical reasons. In the immediate future, I have decided to position myself in my current house, mortgage and all. Why? Well, I have a large down payment tied up and cannot afford to sell for less than I paid-a fact of our economy which cannot be ignored. More importantly, I love my house, and it has many money saving advantages. Being ten years old, most of the improvements on my list are more cosmetic than structural, and can be made at my time frame, when I can afford it. This house has a single, open plan which makes circulation easy. It’s also situated in a part of the country whine screens and fans are sufficient for many months. The house is in a fairly low cost of living area, and allows me space to garden, have two space intensive businesses, and raise large dogs. The only paid assistance I need is occasional help with the yard. While it’s far from my family in Denver, the cost of living difference allows me to travel there for a few weeks about four times a year.

My choice is not perfect. It means I’ll have to make some bigger cuts in other areas (good bye, cable my friend). It may mean that I have to make larger expenditures temporarily to make this house work and run more cheaply in the long run (I’ve been considering a whole house fan but was unsure if I was staying). It means that I will be a day and a half trip from my only relatives other than my children, rather than living in the same town. On the other hand, I’ve chosen a place with a low cost of living, many conveniences, and where shoveling snow (or hiring someone else to shovel it) is not a requirement.

Even as I’ve made positioning decisions now, I’ve looked ahead to the next phase of my life. I’m unsure when that phase will arrive, but at least I’m aware of it and what’s kind of decision are required. What about you. Will you stay where you are? Would you prefer to move, to downsize, or perhaps just to improve your climate? Is downsizing where you want to go? Is the housing market such that you can make the choice you want? How are you making these decisions work for you?

Wednesday, April 27, 2011

Urban Frugality or Rural Frugality-(Or Somewhere In Between?)

One of the blogs I occasionally visit is The Simple Dollar. This week Trent has an article about why he prefers living in the country (both for frugal and non frugal reasons). My perspective is different. I suspect that for me, it would be much less effortless to be frugal in the city or an inner suburb. Truthfully, I expect that one can be frugal anywhere. The methods change as do the frugal opportunities. We all have to take advantage of where we live.

 In my case, prior to my marriage I lived in cities (Washington DC and Denver). During my marriage we lived in “inner suburbs” (for lack of a better term). Generally these were high cost of living areas. Washington DC generally falls in around number five in terms of most expensive metropolitan centerss. After managing to live quite frugally (and on one salary most of our married lives), I think I have a good handle on why I think this kind of area is a great area to live in when you are trying to be frugal.
  •  Transportation costs can be very low. Because public transportation was cheap and everywhere (and often subsidized by employers), we managed to live on a single (used) car and a good bike until my daughter was of the age to work. If it rained, I simply drove hubby to the train and then came home. We could have had an even less expensive car (read Junker) if we had not also already been into road tripping travel as a family. On the other hand, if you did drive, you paid parking. And if you lived in the city, you may pay to park your car on a daily basis.
  • Garage Sales, Consignment Shops, Antique Shops, Second Hand Book stores and the annual Junk Trash day. Need I say more? Obviously if you are a person who would rather buy new at any cost, this won’t seem an advantage. In my case I managed to clothe my family and much of my home with really cheap, good condition used goods. One year I got my then six year old daughter a complete mix and match wardrobe for the summer (filling three bins) for a total of seven dollars. And I did that in walking distance from my home.
  •  Competition between stores (especially grocers) breeds low prices. When you have a Safeway, a Giant, a Harris Teeter, a Shopper’s Warehouse and a couple others in a mile radius, they have to compete. Yes, overall prices are high, but each week each of those stores has ten or so of those rock bottom choices.
  •  Lots of really cheap, good entertainment for pennies or nothing. When we lived in Arlington, on any given day there was at least one festival on any warm month-pick a day, you could find a street fair. Most museums and cultural venues have family days, free days and specials. Many cities have outdoor concerts, from large to small, art fairs and the like. A family or a single person can be entertained for a day for the cost of a beverage and snack. (Note: I deliberately left the Smithsonian out of this list, because while other cities may not have that resource, they do have other free and low cost entertainment alternatives.
  •  Cheap Housing, especially for single people. While this may sound like a contradiction in terms, an urban environement encourages home and apartment sharing, group housing and the like.
  •  Cheap ethnic foods. Although we could afford to go out rarely, when we did we had a plethora of cheap restaurants (most ethnic, and none fast food) close to home. Especially if we were willing to eat at lunch or early in the evening, we could eat well with our choice of Vietnamese, Korean, Thai and other restaurants.
As with any area, there are also disadvantages to living in this environment. The obvious big differences are the inability to have a large garden, and the lack of large storage space (barns, root cellars and the like). Land is also generally more expensive in urban areas. I think that people in a country environment probably have more options to control utilities. It would be difficult for me to have solar panels, a wood cook stove, a well, or other such things.

I do think that there are some frugal things that people do anywhere, and are not dependent on locale or other limitations for the most part. These include watching spending, negotiating, bartering with neighbors, buying used, setting financial goals, cooking from scratch, and having a general use it up or wear it out philosophy.

What about you? Do you take advantage of all the frugal resources around you? Do you think it would be easier for you to be frugal or save more money if you lived elsewhere?