Planning for retirement: Step One: Live rent free

Nobody plans to fail, but we often fail to plan.   When it comes to refinement planning, it seems we all start too late.  My husband and I only started a few years ago and we are in our fifties.  We started way too late.  The good news  is that we will be okay anyway.  We always planned on living off Social security.  Which though difficult is possible.  Those payments won't provide for lifestyles of the rich and famous.  But it can be done.  The most important thing is to get major expenses under control.

What I have learned over the years living in New York is that rent or housing is the biggest expense going.  With housing under control, everything else was easy.  When I first came to live in NYC, I was lucky enough to find a cheap apartment.  It changed my life.  I found that I could work part time and stay alive.   My husband saw the beauty of my situation and leaned the lesson as well.  Having a cheap place to live is job one.

This could mean any number of things like a tiny house or affordable housing.  I live in New York which provide services to citizen taxpayers.   I own my own home, so housing won't be a big problem.  But since I grew up in an apartment, living in affordable housing will not be a hardship for me.  In fact I derived a sense of comfort from having neighbors close by.  When my husband and I were looking to buy a house, I was adamant about not  living  in the "woods."  I had to be able to go out, meet people, shop, etc.  No house in the country for me.  We ended up with the best of both worlds.  Farms ten minutes away, but a supermarket and public library within walking distance and even a bus to the mall.  But  the taxes may be too much.

Before retirement we will sell our one family house and buy a two family house.  We'll have to move away, but that's okay.  We live in New York and we could stand to leave the cold.  A two family house will provide the income to pay all the expenses.  In short we'll be living rent free.  With any luck the rental property will will throw off enough cash to pay for utilities as well.  Then it's just food and entertainment.

New Year's Resolution

Let us be rich, truly rich. Let's all just close our wallets and make do with what we have. There's a lot you can do without money. The best things in life are free. I change buttons on my clothes for an update. Some people decorate clothes with buttons. You can cover an old jeans jacket, sprinkle a little bleach or do some dying. I had a silk turtleneck that started to lose it's color. I got a packet of dye at a yard sale and renewed it. Silk wears like iron. I still have it and it looks good. There are tons of things you can do without spending big money to update clothes and furnishings. Sell some stuff and get what you want with the money. The idea is to check out of this treadmill economy and keep it together until the jobs come back. Let's feel truly rich and have big bank accounts. Let's be able to fire our bosses and put them out of work for a change. I have said all I can about being cheap. I'm saying goodbye to this blog and starting something new next year. I worked for the union at my old job. I am not happy with what is being done to workers in this country. My husband wants me to write about the issues this coming election year. The Cheapest Woman Alive will now become Lefty Lucy Says. Enjoy my politico blog and please tell your friends.

FINANCIAL PEACE

Nothing beats the knowledge of financial security. I know that I can sleep at night because I have savings, money in the bank in case of anything. Your financial safety net makes you strong. Without a mortgage and car payments my husband and I are free to live our lives. My husband doesn't have to take a crappy job for no money. That's all that's out there right now. Employers have everyone running scared for a job. They are lowering wages while at the same time making one person do the job of three. I tell my husband "for no money you can stay home." My solution is going to be to buy something in Florida that needs work. He can add value to his own properties instead of adding value to a boss' property. I believe in working hard, but I also believe in paying the people who actually do the work. In the last thirty years the productivity of the American worker has skyrocketed. Fewer worker can now do much much more. That means there are fewer jobs. This is a structural problem for which there are no easy solutions. However instead of the gains going to the people who actually do the work, the gains have gone to upper management. The top is making a lot more money while the people who actually do the work are making less. I want out of this system. Having no debt gets me and my husband out of the rat race. Also we want less than most people. Yesterday I was in TJ Maxx. I saw a gorgeous, delicious handbag for about $100. In a way I wanted it, but knew I didn't need it and certainly didn't want to see a bill for it next month. I prefer to have financial peace and not worry about a bill. Lately I've been shopping off eBay. I sell stuff and with the money made buy stuff I want. I don't need a budget for purchases this way. I can only spend the money I make, which is a good way to live in general. I have financial peace.

Lower Your Expectations

I never could afford to live in Manhattan and just didn't want to pay the premium. I lowered my expectations and bought in a place I could easily afford. Sure I wasn't in Manhattan, but I didn't really care. I had everything I needed. I wanted to live in an artsy place and I have that now, but I didn't overspend to live in that kind of place. In fact I underspent. I could have gotten myself in trouble with a big and shiny new house. Instead I kept myself grounded and bought a smaller, older, kinda ugly house that had good bones, but needed work. If I had gotten the new expensive house on the hill, I would now be a foreclosure statistic. There is something to be said for wanting less. My husband is the same way. Even if we suddenly had a windfall I doubt he would ever buy a brand new car. He'd by a late model used car and do all his own detailing, leaving it just the way he likes. He did that this fall with a motorcycle. He didn't buy a new bike and he didn't spend a fortune. He bought an older 2007 Kymco Venox cruiser with 2.4 k miles for $2,300 and totally customized. He bought new things by selling off the old stuff. He sold the original saddle bags and replaced them slightly used leather ones he loved, from Ebay. He also sold some yard sale finds, took the profit and bought everything for the bike for practically nothing. He got what he really wanted by investing in the work of bargain hunting and not being too proud.

The Frugal Paradox

Being cheap has negative connotations, but I believe that being cheap makes you rich. All my life I have been a bargain hunter. If I won the lottery tomorrow, I would still scour the market for day old bread which toasts up fresh in minutes. Frugality to me is a way of life and I don't mind it at all. Yesterday we drove to a free porch sale in our area. My husband found a gorgeous triple ply pure cashmere sweater. I love Craigslist for free stuff. We also picked up a bunch of firewood for the winter. Everything I get for free means more money I get to keep. I even found some kids junk jewelry which my mom is taking to South America where there are people who really have very little. Sometimes in our struggle to buy the new TV, we forget just how rich we really are here in America. We have so much that between Craigslist and Freecycle we could easily furnish most of our needs and the needs of others. I gave away six winter coats this year and I still think I have too many. But I had to let some stuff go in order that other stuff can come in. We're going to have a big clean out this year in order to let more stuff in. Being frugal has made me rich.

Great Christmas

I had a really great Christmas on the cheap. I made a vegetable lasagna and got together with friends. They were all struggling artist types and after the meal we started jamming and sung folk songs. It was a lot of fun. I was all sung out though because the choir had two services on Christmas Eve followed by a service on Christmas morning. There were just too many hymns and way too many verses. I sang six verses of Joy to the World. I didn't know there were that many verses. I almost closed the book after verse number four but luckily I checked the next page first and kept it open for the last two verses. It was a beautiful service and I was so glad that I was in Church surrounded by wonderful people. And although it's a cliche, the best things in life are free. Well almost, through my penny pinching I was able to give money to my church this year. It was money I didn't think I would have, but I found it waiting for me when I needed it.

TAKE TIME FOR YOURSELF

I've been posting 5 days a week for many months and now it's time for me to stop. I have talked about just about everything I know on being Cheap. The best way to refill when the well goes dry is to take a break. Back when both I and my husband were working, we would often take mini vacations just to relax and get away. Mini vacations are pretty cheap. We would go somewhere close overnight and have a very nice time. I packed food of course. Most times the food bag was heavier than my weekend bag. The small expense was well worth it. My favorite getaway was Black Friday. Everyone was shopping and the pool was empty. Even though I'm cheap, I do believe in treating myself to making good memories. I don't get my hair or nails done, but I do like to go away for a bit even if it's only overnight. Next year we will be taking a trip to Florida to look for a house. After that we will be traveling down there regularly to get away and put the place together with second hand furniture and mismatched plates. We will also use the place as a getaway from the cold. I also reached out to my old job and I may be going back part time, if my health can handle it.