Is Smaller Better???

July 24, 2015

Have you watched HGTV recently? They have a show called Tiny House Hunters (spoiler alert – it’s not about termites looking for a new place to destroy) where people are on the hunt for ultra small houses. Most of the houses showcased are less than 200 square feet. That is smaller than the average US standard hotel room. I watched each episode with wonder, trying to imagine living in such a miniscule space.

A few buyers wanted to be free to move around. These tiny houses allowed their owners to move anywhere a truck could haul it. Others wanted to live more eco-friendly and have a small carbon footprint.

But the episode that really grabbed my attention was about a single woman who wanted to simplify her life and retire early. She figured out that she could afford to live in her dream location as long as she kept her housing costs under $60,000. So she quit her job, sold her lovely house in Colorado and set her sights on a tiny house on Hawaii’s Big Island.

So is this just a fad? While it is extreme, there is a definite movement towards smaller houses. Per this article, the National Association of Home Builders states that the average house size has shrunk from over 2,500 sq ft in 2007 to 2,152 in 2015. After decades of expanding house sizes, it looks like the days of the McMansion are waning.

What’s driving this trend? More Americans have decided that working 12 hour days plus an hour commute just to afford their big house isn’t worth the trade offs. Then there are the Baby Boomers – a large population of empty-nesters who don’t want the expensive and time-consuming maintenance required for their big houses and big yards. Lastly, millennials are demanding smaller, more eco-friendly homes in the urban areas. Home builders are listening and are building new single family houses that are smaller.

While I doubt I could live in a house smaller than the average dorm room, I am in the process of downsizing my life. My children are in college at Ohio State University so I sold the big suburban family home and bought a smaller single family house in the city. It’s large enough to comfortably accommodate them when they visit for the holidays but too big for just me.

A short term goal is to downsize even more in four years to a place with two bedrooms and water views and use the proceeds plus my savings to help fund my retirement. Every year, I check my plan with this retirement calculator to make sure I’m on track. Of course, life can throw curve balls but hopefully my plan to cut expenses now and even more in the future can help me dodge most problems.

I don’t know what drove the lady in Tiny House Hunters to retire in her mid-50s and pursue her dream of living in Hawaii. She bucked society’s norm by giving up her big house and fancy job to do something as radical as living in a tiny house. Extreme? Yes, but I admire her courage and dedication.

 

 

Shave Your Budget, Not Your Moustache

November 12, 2014

A recent Wells Fargo study found that 31% of survey respondents do not think they will have enough money to “survive” on in retirement, yet more than half say they plan to save later for retirement in order to “make up for not saving enough now.” If we have learned anything from Aesop’s fable regarding the ant and the grasshopper, it’s that waiting until later is NOT a good strategy. This is especially true when it comes to saving for retirement. Continue reading “Shave Your Budget, Not Your Moustache”

Less Can Be More

March 21, 2014

The old expression “keeping up with the Joneses” has led far too many people into living a lifestyle based on consumerism, having a nice house, nice car, nice clothing, and nice vacations, but a not-so-nice balance sheet.  I have seen this happen more times than I care to remember with clients, friends and family. In fact, early in my married life, I fell into the same trap.  We lived a very nice lifestyle and had a lot of “stuff” in our lives.  Fortunately, I was able to put together a savings plan that came first, so we didn’t become fully immersed in that kind of lifestyle.  Continue reading “Less Can Be More”

Financial Lessons From the Amish

August 27, 2013

One of my favorite things about summer is fresh corn so I’m fortunate to have an Amish neighbor who runs Briar Hollow Farm Market, where I can buy it within walking distance from my house. When I first met the Stoltzfus family, I was amazed at their simple way of living. We can learn a lot from the Amish way of life though. Continue reading “Financial Lessons From the Amish”

You Might Be a Redneck…But Be a Frugal One

June 18, 2013

As Jeff Foxworthy says, ” you might be a redneck if …” Well, does buying my father tickets to a NASCAR race fit the bill? Dad is getting ready to turn 80 this year, and since his June birthday always falls close to Father’s Day, he usually ends up getting dual purpose presents from my brothers and I.  Even though he doesn’t meet all the criteria for being a redneck NASCAR fan, over the past several years he has become an armchair follower of Earnhardt, Gordon, Elliott, and of course, Danika Patrick. Continue reading “You Might Be a Redneck…But Be a Frugal One”

Is Your Budget Penny Wise and Pound Foolish?

October 12, 2012

I talk to a lot of people about their cash flow, budgeting, and debt and when we dive into the details of their monthly cash flow, we tend to look for relatively easy ways to trim spending.  We will look at things like keeping vs. ditching a land line, cutting back on the premium movie channels, and cooking more and going out to eat less.  These are all worthy pursuits and can all lower your monthly cash outflow for years to come.  But I’ll put them in the “micro” budgeting category.  Micro budgeting can save money, for sure.  But is it possible to make an even bigger impact on your budget?  Continue reading “Is Your Budget Penny Wise and Pound Foolish?”

How Buying a Video Game System Could Save Me Money

September 28, 2012

My kids always laugh at me when talking about video games.  Apparently, I’m the only dad that they know who does not own a video game system.  All of their friends have dads who play video games with their kids and when they are talking about “leveling up” or some new “zone” or “world,” I have absolutely no idea what they mean.  I’m a big fan of doing things with them that don’t involve video game consoles.   In fact, I haven’t played video games since Atari was “the” game system.  But, unbeknownst to my kids, that may be changing in the near future.  Continue reading “How Buying a Video Game System Could Save Me Money”

5 Ways to Reduce Food Waste in Your Household

September 12, 2012

If you’re like the average American, nearly $500 of your hard-earned money goes down the drain annually because of wasted food. $500 a year would go a long way toward shoring up your retirement savings or even paying down your credit card debt. Continue reading “5 Ways to Reduce Food Waste in Your Household”

Show Me the Money — to Pay Down Debt

July 09, 2012

One of the common complaints I hear from people who are trying to get out of debt is they are financially strapped.  “How can I pay down debt when I can barely make ends meet?”  Since the economic downturn in 2008, overtime pay has gone away, salaries were cut and haven’t come back up, and those who lost jobs and found new ones are unfortunately getting paid less.  It’s tough to find extra money to pay off credit cards and other loans but it can be done. Continue reading “Show Me the Money — to Pay Down Debt”

“The Andy Griffith Show” Meets the Kardashians

July 06, 2012

I just heard that an iconic American TV personality has died.  Andy Griffith was one of the most beloved characters of not just a generation, but of a few generations.  After I heard the news, I started scrolling through the channels and watched a few episodes to remember the good old days in Mayberry.  It took me back to a time that was much simpler, when the rules were clearer and business and personal ethics seemed to be in a better place than they are today. We tend to only see the positive when looking backward.  But, in looking back at the way life was portrayed in Mayberry, I noticed something that seems like an even more far away concept.  Continue reading ““The Andy Griffith Show” Meets the Kardashians”

Is the iPad Really Worth It or Just a Waste of Money?

July 05, 2012

I write a lot in this blog about ways to save money and live frugally. However, I do have to admit that I have a weakness for technological gadgets (this is one area where analysis paralysis actually works in my favor by stopping me from buying a lot of things I’m tempted to buy). Yet despite this, I’ve never bought an iPad or one of its many would-be competitors. Frankly, I just don’t get it. Continue reading “Is the iPad Really Worth It or Just a Waste of Money?”

Painless Ways to Pay off High Interest Debt

June 28, 2012

Are you struggling with credit card debt? If so, you’re not alone. Paying off credit cards and other higher interest debt is one of the most common goals that people try to save for. Unfortunately, having to pay off a large amount of debt with ridiculously high interest rates can make you feel hopeless, especially if your budget is already stretched. But it turns out that you don’t necessarily need to make huge sacrifices to become debt free much sooner than you may have thought was possible. Continue reading “Painless Ways to Pay off High Interest Debt”

How to Slash Your Entertainment Budget This Summer to Less Than $100!

June 18, 2012

Entertainment seems to be a universal budget crasher.  My son Brian told me that he tries to stay in his budget but sushi night always puts him over.  He has subsequently switched to the 10 cent wings night at his local barbeque place and bragged to me that he ate something like 35 chicken wings in one sitting. Entertainment, which inevitably involves expensive food, will bust a budget every time. My friends and I went on a hike this past weekend (free!) but afterwards we grabbed lunch with a group of friends so each couple ended up spending something like $35 bucks on lunch and libations.  There goes the benefit of the free entertainment. Continue reading “How to Slash Your Entertainment Budget This Summer to Less Than $100!”

A Tale of Two Choices Part 2: Which is Right?

June 01, 2012

Last week I wrote about 2 young men who are living very different lifestyles.  One is frugal now and is saving substantial sums of money and the other is living for the day with the assumption that when he gets married and settles down, there will be plenty of time for saving later.  As I was writing it, I was reminded of the epic tortoise v. hare race.  In the blog post, I raised some questions about the lifestyles and choices that these men are making.  Some of those questions are at the very heart of the field of behavioral finance and some of the questions could lead some of us to “judge” the choices that they are making.  This is where understanding each guy and how they are “hardwired” regarding financial decisions can be helpful.  Continue reading “A Tale of Two Choices Part 2: Which is Right?”