10 Great Money-Saving Reasons to Radically Downsize Your Life

We are in the middle of a radical downsizing of our life (see previous posts). We are moving from the typical American lifestyle (big house, lots of expensive junk that we never use, horrible consumer habits, etc) to something quite different (renting a room for a home base and traveling with just what we can carry in our suitcases). This experience has been hands-down, one of the best ways to save money that I have ever found. Here's why:

1. We don't/can't shop for stuff any more. Since we are in the process of getting rid of stuff, it doesn't make sense to bring any more stuff into our house so shopping trips have been reduced and when I do find something I want, I realize that soon I won't have anywhere to put it so I don't buy it.
2. Knowing that we have a deadline looming, it really brings into focus what is important--namely bulking up our savings as much as possible.
3. We aren't spending much on food these days. Our goal is to skip going out to eat (we haven't done this much lately anyway) so that we can eat up the food we have in our cabinets instead of packing it up and giving it away.
4. Instead of being consumers, we are now on the other side of the equation--I am selling stuff like a maniac on EBay and Craigslist.
5. While we still have one car, we are looking at the possibility of eventually being totally car free. If we do end up traveling mostly overseas like we have planned, we will have no need of a car. I didn't realize how much a car actually costs until I got rid of my car. I had had a car since I was 16 and didn't think twice about paying all of the expenses that went along with it (car payment, insurance, maintenance, parking, etc) until I got rid of my car and found that I had an extra $800 to $1000 PER MONTH!
6. The purchases we do make are now analyzed, scrutinized, and evaluated for overall usefulness and cost. Now instead of needing a half dozen fleece jackets, I need one. When determining what kind of camera to get, I decided on a nice (and inexpensive) small point and shoot type instead of the multi-lens (and much bigger and expensive) SLR camera. Ditto for the one good pair of walking shoes, the couple of pairs of pants and t shirts (instead of multitudes), etc.
7. When I review our bill list each month, I literally can not wait to sell the house and move. Our monthly bills will radically drop because we will be paying a small, flat fee for a room instead of huge heating bills in the winter, cable TV/internet/phone, utilities, a big house payment, etc.
8. I'm not stockpiling stuff like I used to. I used to be the coupon queen. If I could buy a dozen bottles of dish soap because they were on sale and I had coupons, I would be in heaven. Now I look around and the cabinets are almost bare and I feel surprisingly much better, like the great weight of being responsible for so much stuff has been lifted off of me (this has also saved me a lot of money!).
9. I don't have any credit cards, hubby has one more to pay off, and when we do this, we will be saving money that would have otherwise went to interest. Oddly enough, I used to feel so secure with a wallet full of credit cards. These days I look in my wallet that contains my ID and a couple of debit cards and I feel indescribably light and free.
10. I think my health will improve the more we downsize. No car means more walking. Less work means more time for yoga and walking. More freedom means less stress. All of these things will probably save money on health costs.

I'm sure we will realize even more financial benefits as we continue on with our journey

35 Days Til the Big Move

Our goal: to have our house sold/in the process of being sold, to have my portable business set up and generating income, to get rid of basically everything we own except what we can fit in our suitcases, and be on a plane to Japan by December 31, 2010 (the end of next month!).

Some back story: we have been toying with the idea of selling everything and traveling for more than a year. We have been inching towards such a goal since the idea first came to me, but now things are in motion and it looks like our "drop dead" date for the goal will be the end of next month (yikes). It's interesting how when you set your mind to something the universe starts arranging things to help you reach your goal. And it's scary. In theory, the goal seems wonderful but the closer we come to making it a reality, the crazier the idea seems. What if what I am doing is a big mistake? What if this isn't what we should be doing after all? What if we (namely I) fail miserably? The hubby thinks the idea is insane but he would literally follow me to the ends of the earth so he is willing to go along with whatever I want to do (and I think he is secretly excited about the whole idea too). It's so easy to stay in the rut of everyday life--it is so comfortable there! So I re-read this article and this article and while I am still wondering what the heck I have got us into, I also realize that change, and the fear that comes with it, is normal.

So here's the overall plan:

1. Sell the house and everything in it.
2. Rent a room from a cousin who lives near us to store a few boxes of personal possessions that we will pick up and bring with us when we get back from Asia. We will also be storing our car at his place too.
3. Go to Japan for a week or so then head to the Philippines. Stay in the Philippines until March.
4. At the end of March come back to our Seattle-area town and stay in our rented room at the cousin's house for the month of April while I prep for a bike ride.
5. Bike from Canada to Mexico during the month of May (hubby will follow along in the van which will also carry our few personal possessions to our new home base in Atlanta).
6. Arrive at the US-Mexico border on April 30th, drive to Las Vegas for a few days, then on to Colorado to visit our sons and their families.
7. Take a leisurely drive from Colorado to Atlanta where we will be renting the guest suite at my sister in law's home. We figure we will be arriving around June 1st and we will be making this our "home base". Drop off our stuff.
8. Head to Connecticut where we will visit family for the summer (June, July, and August) since it is hot as Hell in Atlanta in the summer.
9. Head back to Atlanta in the fall. We plan to go on a couple of cruises out of Florida and possibly go to Europe during the early and late fall.

What we've done so far:

• Listed the house for sale.
• Set up a private mail box that will hold our mail then forward it to where ever we are (we want to maintain our residency in our current state).
• Updated some of my tech stuff (I bought a new camera, some memory cards and USB drives) and decided not to upgrade other stuff (my laptop and netbook still work well and although I would like the latest computers with all the bells and whistles, I think it is more important to save my money for other stuff...like travel expenses).

What we need to do:

• CraigsList the bigger furniture items.
• EBay some smaller electronics items.
• Have an "estate" sale to sell everything else in the house.
• Sell the house, of course.
• Decide what stuff we will keep (likely pictures, important files, and some small stuff but everything else has to go including some antiques that I will miss).
• Give my "final, final" notice to the place that I work for (I gave notice a month ago, they asked me to stay, I agreed, and it has been dismal since then so I really think it is time to go. I will, however, try to work out some contracting with them that I can do long distance).
• Resign from a couple of community Boards that I am on. I volunteer just about everywhere but I am particularly active with a couple of non-profits so I will be giving them my notice as well.
• Pay off hubby's last remaining credit card with the proceeds from the sale of our stuff.
• Put all other money we generate into our emergency and travel funds.
• Forward all of our mail to our new mailing address
• Get some business cards made with our new info on it (I like Moo cards).
• Make a few repairs on the house (like fixing the fence, part of which blew down during last week's storm).
• Sign up for the military "Space A" flight which will take us to Japan for the sum total of $10 (it's a perk of the hubby being retired from the military and will save us an armload of cash on our overseas flights).

Once the house sells we will:

• Bank all of the proceeds from the sale.
• Pay off the final utility bills (we will leave money with the cousin to do this as we will likely be out of the country when it sells and sending mail from the Philippines is pretty unreliable).

And after the first of the year we will need to:

• Do our 2010 taxes as well as B & O taxes.

And our expenses will roughly be:

• $500 to send one grandkid to school in the Philippines (a lump sum for all of next year)
• Cell phones ($80 a month since we are still under contract for another year)
• Tithe (I do this monthly based on my income. I am guessing this will go down since I won't have a regular, steady income)
• Taxes (another lump sum to be submitted with my 2010 tax return).
• Car insurance ($45 a month which we will pay in lump sums twice a year. We had considered dropping car insurance for the months we are gone but then we won't be insured if we drive anyone else's car so decided to keep it).
• Health insurance ($35 a month. A bargain, which gets withheld from the hubby's retirement pay each month)
• Basic living expenses (rent, food, clothing, toiletries, entertainment, etc). In the Philippines these costs will be much less than what we have been paying for our household in the US and, when we get back, renting a room will also be much less than what we have been paying to maintain our own house (I figure it will be a savings of about $2,000 a month over the cost of a mortgage, utilities, home repair, house insurance, property tax, et al).

So that's it so far.

And the most important lesson from this....without living the cash-only life style and being debt free, none of this would have happened. We would still be stuck on the hamster wheel of charge up the credit cards, work more to pay debt, get depressed about our debt and being forced to work to bring in an income to pay the debts, charge more stuff to make us feel happier temporarily, ad nauseum. Being debt free, having money in savings, and cutting expenses to the bare minimum really does allow us to do basically anything we want to do.

When a Weather Disaster Happens, You Need This Stuff

The last few days have been a whirlwind of snow, icy roads, sub-freezing days and nights, a power outage, and a shuffling of relatives who came for the holidays and were surprised by the treacherous weather. Even though I would much rather hang onto my cash these days, when a winter storm hits, these items can be priceless:

• Flashlights and extra batteries.


• A battery-operated radio.


• A car cell phone charger.


• A cell phone that allows internet access.


• A shovel.


• A windshield scraper.


• Candles and matches.


• A fireplace with lots of seasoned firewood.


• Extra blankets.


• Winter clothing (heavy jacket, hat, gloves) and winter boots.


• Food that is simple to prepare and eat and which doesn't require cooking.


• Tire chains.


• A chain or rope (to pull or be pulled from a ditch).


• Bottled water.


• Pipe and faucet insulation.


• An alternate heat source (like a kerosene heater).


• An alternate cooking source (like a camp stove).


• A full tank of gas.


• Other stuff you can't do without and can't easily access if roads are impassible (prescription medicines, diapers, extra oxygen canisters, etc).


• A generator and fuel.


• A chainsaw and fuel.
  

Obviously it would be pretty expensive to run out and buy all of these things at once, however it is a good idea to start with the things that are most important to you (in my case, flashlights, a radio, and bottled water) and put aside a little money each month to stock your emergency supply kit. Also, many of these items can be bought cheaper than retail by purchasing the items at the dollar store, the thrift store, and at garage sales. Finally, you may not need all of these items. Apartment dwellers probably won't need a chainsaw or generator. If you don't have a car, you can skip the tank of gas, tow rope, and window scraper.

Another Quick Update

It seems like all I have been posting lately is updates but things seem to be moving rather quickly around here...

• We listed our house for sale (again) this morning and had a potential buyer look at it this afternoon. Tomorrow I will take my friend's advice and toss a small piece of our house (a small piece of wood from one of the beams in the garage) and throw it into the canal by our house. She said fast moving water so I hope that counts. She said that when she did that, thus releasing her house to new buyers, her house sold in three days!
• A while back I reported that hubby had agreed to cut out his expensive Philippine stations from our cable plan (saving about $70 a month!). He recently found that he could watch shows from all of the stations in the Philippines for free online. So now he is a happy camper, he has told many of his family members about this (they too are talking about cancelling cable now), and we are now considering cancelling cable all together.
• I met up with a friend today who I haven't seen in a couple of months. Her husband passed away last week and we had a long chat about everything that had happened while I was away on vacation. This kind of reinforced a bunch of things for me, namely that you never know when someone will die (he had some medical issues but they were scheduled to leave on a cruise today) so I want to spend as much time as possible with the hubby now before it is too late (he is 20 years older than me and not getting any younger!). She also wondered out loud about what she would do with all of her stuff (they were both well employed, had a huge house, and owned nearly every material item known to man); ironically she said they bought so much stuff so that the other would be happy but he couldn't take it with him and she doesn't care about the stuff, her only thought now is that he is gone and she is miserable. Kind of realigns one's priorities in a hurry.
• Hubby is now on board with selling everything in the house before we move. Before he was pretty tied to his stuff but today he was making plans for an "estate sale". The realtor said it is better to list it as such instead of as a garage sale because #1 we are selling everything in the house (thus 'estate') and #2 people like to go to garage sales in the summer and estate sales year round. Makes sense to me!
• FYI--Tomorrow is National Survivors of Suicide Day. Events will be held all over the country and a webcast will be available online.
• We're throwing a "farewell party/big Thanksgiving day blow out" at our house next week. Since we don't have much family around where we live, we usually meet up with another couple and go out for dinner for the holiday, however it honor of pretty soon not having a house, we figured that this may be one of the last times we will be able to throw such a big party. I have been hunting down loss leaders at local stores for the past two weeks and I think we have everything we need for dinner. We have invited lots of friends and acquaintances, I got a huge turkey for 27 cents a pound, and we are semi cleaning out our cabinets (so we won't have lots of food left when we move) and will probably be cooking up some interesting dishes along with the usual fare (don't know what I will do with 20 cans of pinto beans but I am guessing they will end up on the menu somehow). As usual, I am using cash to purchase everything.

10 Steps to Get a Grip When You're Overwhelmed

Stepping back into my life after a long vacation was a bit overwhelming. All of the work, responsibilities, and basic "stuff" was just waiting for my return. How to get a handle on it? Here's what I did:

1. Get a good night's sleep and forget about everything until the morning. I work much better in the morning after a good night's sleep. I am practically useless by evening time. Some people are just the opposite but for me, mornings are when I do my best work.
2. Clean the house and do laundry. I can't function well when my "inner circle" area, namely my home, is a mess. It clouds my thinking and adds to the weight of stuff that I feel is overwhelming me.
3. Gather and organize all of the "incoming" stuff. This includes going through all of the mail, email, phone messages, etc. Tossing out the junk and sorting stuff into "respond now" and "later" piles.
4. Make my office "grand central". Depending on the amount of stuff I have to do, my desk and sometimes the entire floor may be covered with piles of stuff to do.
5. Organize piles and lists. List #1 is a list of stuff to buy (laundry soap, for example, which I noticed we were almost out of when I did laundry. The list gets longer as I go through my piles), list #2 is a list of errands to do (pick up birthday cake for friend, drop off outgoing mail, etc), list #3 is phone calls to make, pile #1 may be things that can be done quickly (write letter for X), pile #2 may be longer term things (write report on X), and pile #3 are things that will take a half day or more of concerted effort to complete.
6. Start to work on each list then pile. List #1 is on the desk ready to go with me when I leave, I review list #2 to see if there is anything that I need to get ready when I leave to do errands (ie: if it says pay bills, I need to get the bill, write the check, and make sure the envelope has a stamp on it), I then sit down and call everyone on list #3, and depending on the time, do everything that needs to be done in pile #1. I usually save pile #2 for the next morning when I can focus on working specifically on whittling down the pile, then schedule blocks of time to do things in pile #3.
7. The next day, after I get a lot of things done, I can usually merge all of the lists into one to include leftover errands, messages to return, and things to buy.
8. The next day, I also try to block out time to finish up everything in pile #1 and pile #2.
9. By the following day, I usually have the bigger projects left so I try to set aside a day or even a half day to hammer away on these projects.
10. Reward myself for my diligent effort with a frapuccino from Starbucks!

I'm Back--An Update

Our six week vacation came to an end and now we are back home. Here's an update:

• Our house is going back on the market on Wednesday. I can't wait to be "home free" (note I didn't say "homeless"!).
• I had a "come to Jesus" meeting with the Executive Board of the organization I contract with. Instead of accepting my letter terminating my contract with them, they overwhelmingly wanted me to stay. I thought I was in the Twilight Zone! But at least a significant part of my income will remain in tact for now.
• Oddly enough, when the Board went into Executive session to discuss me, I got a phone call with a job offer from a friend, completely out of the blue. Serendipity? Or the universe applauding my bravery?
• I had the opportunity while we were on vacation to barter a couple of jobs. I did some web design work for a couple of businesses and ended up with a handful of spa passes and a dozen Christmas trees. I love bartering!
• We are building up our savings and hope to go to Asia in December.
• When we got back from vacation, I came back to a full slate of meetings and a huge amount of responsibilities that I had got used to now worrying about when I was gone. I can't wait to move to a more location independent lifestyle a la this article.
• Finally, now that I have time to kick back and surf the 'net (at least more so than when I was on vacation), I have time to find great articles like this, which reminded me of many of the frugal lessons that my grandmother taught me.

10 Things that "Everyone" Does But Most of Us Shouldn't

It is so easy to go along with the crowd. I think we learn this in junior high school. In elementary school, kids pretty much do what they want to do, not knowing or caring what others think. Then as kids approach their 'tweens, everyone else's opinion suddenly becomes so important that they forget about what they actually want to do and just follow the crowd. Advertisers learned this lesson early and have put it to good use...show people what "everyone else" is doing then make us feel like we will be less acceptable if they don't follow along in kind. Here's ten things that almost everyone else does but that I am slowly learning to rebel against:
1) You need a car. Every adult needs a car. I haven't owned a car in maybe five years. I finally couldn't justify paying nearly $1000 a month just for a car when I was supremely happy taking public transportation anytime we traveled. I figured that if I could take a bus in a third world country sitting next to a chicken on one side of me and a drooly baby on the other, and still be amused by life, then I could probably take public transportation in my own home town. And so far this has worked out very well. Now hubby and I share his car or I ride the bus and it has literally saved me thousands and thousands of dollars.
2) You need a house to be a rooted, responsible person. I am moving more towards the thought that you need a clean, warm, safe place to live. It need not be a house with a mortgage. In fact, the lower the maintenance on your home (ie: no mowing the grass, re roofing at regular intervals, finding a new pool man, redecorating every season, etc) the more time, and probably money, you will have to actually enjoy your life. I am dispensing with my house as soon as I get home next week. I am set on making my sister-in-law's guest house in Atlanta my new digs as soon as possible.
3) You need a college degree. I have always wanted a college degree just for the status of having one. I dropped out of college after three years because it just didn't make sense to pay tens of thousands of dollars to get a degree in order to get a job that would have actually paid me less than the job I had that supported me while I was in college. I guess getting a degree is a math equation that people don't often ask themselves.
4) You need a lot of expenses that you can use for tax deductions. These may include the interest on your home, business expenses, etc. My new thought on this is that it would make more sense to buy less stuff and work less in order to pay less taxes than to earn more and buy lots of stuff in order to get a fraction of the costs that you expend back in tax deductions.
5) You need a lot of stuff to have a fulfilling life. My in laws are amazing, wonderful people but it has been like I am trapped in an unending commercial while we have been with them. Granted, in their culture, status is of extreme importance. Where you live, what you buy, which credit cards you have, what kind of purse you carry, where you go on vacation...basically everything they do is dictated by what people in general will think of them. In their culture, people are judged mostly by these outward signs of wealth and prosperity. Fortunately in our culture, especially with the recent uptick in the popularity of minimalism, there are many more people who understand that material goods do not equate to happiness or fulfillment. I know many people who seemingly have everything yet they can't get through a day with a couple of drinks or a Xanax while others I know who would be considered below the poverty level are very happy and content with their lives.
6) You need a good job. Actually that has been the mantra for at least the last four generations of my family (before that people were self employed as farmers or small business owners). Since the industrial age began, people have moved towards the career job/stable salary tract and have forgot that it is perfectly acceptable to be your own boss. I have been my own boss for the last ten years and love it. I do, however, need to focus more on diversifying my client base. It is easy to get lazy when you have one client that pays really well and a couple of related clients which you just kind of fall in with. Starting next week, this diversification will be my main task as I work to rebuild/remake my business into something that works better for me.
7) You need to be responsible and do the right thing. This usually entails following the crowd and doing what everyone else is doing. I have been responsible and "doing the right thing" for ages and all it has done for me was get me into a rut and make me bored silly. I am going to start doing what I want to do and screw what everyone else thinks. If I want to paint my new bedroom purple with pink polka dots I will, and I won't even care that it isn't something an adult would do. I am also going to finish my novel, enter off the wall contests, maybe even sing on a street corner for kicks....anything to make life more interesting and exciting.
8) You need to be part of a community. I have been a bit overwhelmed with social/community organization responsibilities for the past decade. If something interests me, I tend to say yes and volunteer for things to the point that these sidelines become more like a secondary job. Part of the attraction to moving and settling somewhere totally new is that I won't have a half dozen board meetings to go to each week, I won't be responsible for moving organizations forward (ie: doing fund raisers, volunteering for projects, etc), and people won't be calling me for every crisis. It is great to volunteer and help out in the community but by trying to help everyone you actually do yourself a dis-service.
9) You need great credit. I will be perfectly happy when, like Dave Ramsey, my credit report becomes unavailable because I will have no credit track record. His credit score is zero because he never uses credit and one day, I would like mine to be zero as well. But, like Dave Ramsey, I will of course have lots of money in the bank so that I can pay cash for anything I need (he pointed out at his recent event in Atlanta that while he would be unable to rent an apartment that required a credit check because he has no credit score, he could easily write a check and buy the entire building. I think that's cool!).
10) There are lots of things that we have in mind to do during our lifetime but we often put them off in order to tend to our responsibilities. As a recant event showed me, you can be perfectly healthy one minute then drop dead the next so we should never put off doing anything. If you have always wanted to visit Washington DC, you should go now, even if it means CaigsListing a ride and CouchSurfing in order to do it...there may be no tomorrow.

As Our Vacation Winds Down: An Update

We have less than a week to go before the end of our vacation and we end up back in cold, rainy Washington. Here's what's happening of late (some money lessons included):

• I have been pondering the idea of what I will do with my job (or what it will do with me) when I get back next week. I have decided that I will terminate my contract with the business that I work for, therefore ending my eight year term with them. I love the work but with all kinds of upheaval going on and with the person I used to report to being replaced with two people that I literally can't stand being in the same room with, I think this is best for all. My business mentor/really good friend agrees whole heartedly with me, saying that the environment is so toxic there she can't believe I would even consider staying. Hubby was less enthusiastic but supportive nonetheless, and my conscience seems to think this is the best course of action for me even though it seems pretty crazy to leave a job, any job, during one of the worst times for unemployment in recent history. I am hoping that the universe will consider my actions brave and present me with some wonderful opportunities.


• Real life intervened in our pretty much idyllic vacation a couple of days ago when my SIL's receptionist had a severe aneurysm and nearly died. She is still in a coma in the hospital and while I didn't know her very well, she seemed very nice (and very young and healthy at about 45 years old!) so it was really a shock for everyone. Lots of money lessons came to mind including how her family will be able to make due without her income, how her family has so many additional expenses (hotel by the hospital, gas to get back and forth from home to the hospital a couple hours away, food, etc) that they weren't expecting, who will take care of her four children, whether or not she has health/disability insurance, etc. You never really think about these things until a big, tragic event suddenly happens and people are left to sort out the details. I guess I should really start planning what I/the hubby would do if such a thing happened to one of us.


• Our expenses have gone up. The first part of our vacation was spent vegging out at one SIL's home. We didn't do much and we had few expenses as the SIL treated us to nearly everything (dinners out, shopping, etc). The next part of our vacation took place on a cruise ship so all expenses (lodging, food, entertainment, etc) were paid in advance with the cost of the cruise. During the actual cruise we may have spent $75 total. Now that we are in New England with more than 50 family members and friends, our costs have risen because people take turn treating each other to meals out, we pay for gas to get around the city and go to other states to do tourist stuff, we have lots of nieces and nephews around so we tend to treat them (like skating a few days ago), we are doing some cooking at home but buying food, especially meat, in bulk can get spendy...you get the idea.


• We've had an interesting insight into how "the rich" live. We, like most of the family, do OK but some of the family that have come in from LA, Manila, and Hong Kong are decided wealthy. And it is interesting to watch how they do things. One cousin was talking to a friend and told him that he should come over for dinner with the family. So the guy did. He showed up about five hours later, after having hopped on a plane and flown in from Chicago. Now when I make dinner reservations, they usually include a short drive to the nearest city, not a plane ride half way across the country at a moment's notice. Another cousin literally doesn't know how to use a vacuum cleaner or wash dishes. She has a full staff that does every thing for her--her maids even wrapped a huge suitcase of gifts that she doled out to everyone and packed her suitcases! She is very nice but a bit odd. She avoids light in general, especially the sun but even direct light from light fixtures lest her porcelain skin get any sort of tan. She is very charming and we find her eccentric and amusing.


• I have decided that this is how I want to live. Much more travel, much less worry about mundane stuff like home repairs, who's doing what at work, what TV shows are going to be on, etc. Some people crave stability and a home. I have had that and it seems like I get so caught up in "normal" stuff that I miss life. I like a life that includes meeting new and interesting people, living on the spur of the moment (the family saying is that if you don't like the day's plans, just wait a few minutes because they will change), and enjoying new experiences (we've had so many over the last month that I've lost count!).

Now, the challenges are many. How do we disconnect from the life we have had for 20 years? How do I cut loose from a job that provides a good income (I guess I will see in a week or so) as well as from my many community obligations? How do we generate an income and where will we live? Will we miss having a stable but boring existence? Can we travel yet settle down for a few months at a time so we can have the best of both worlds? I guess these things remain to be seen.