Friday, July 19, 2013

Save money by decluttering!

Inspired after reading about how "stuff" keeps Americans from doing the stuff they'd like - spending time in the yard - I started on a new goal - 2,000 items out by the end of the month.  The first 200 were frighteningly easy;-)  Interestingly, the person at Goodwill who helped us unload told me  he has "NOTHING" extra at his apartment.  He said he sees people coming in with entire pick up trucks full of stuff and now sees it as just extra baggage so to speak.

Now, not only feeling lighter,  I found three things I'd been looking for and realize we have doubles of quite few things, like pet medicines, that I won't need to buy.  These are all financial savings.  Out of curiosity, I Googled "Does decluttering save you money?"  Here are a few links that say yes!

Best wishes!

Decluttering saves you money:

Decluttering your home room by room:

Thursday, July 18, 2013

Does your "stuff" make you sad? At what cost?

If I asked you to quickly list ten happy moments you experienced today, would any of them relate to your "stuff"?

I, like so many Americans, own too much stuff, plain and simple.  We have too many toys, too many books, too many clothes, shoes, etc. etc.

And I know full well, the stuff doesn't make me happy.  I'd say the stress that comes from cleaning and organizing the basement, garage, kids' rooms, closets, etc. is one of my major sources of stress. 

About six months ago, I started a nightly review of 10 happy moments that day. What surprised me was that 99 percent of happy moments were interacting with people: my husband, kids, friends, family, neighbors, the joke I shared with the check out clerk.  For a self-confessed introvert, that was surprising.  The only physical things that appeared regularly were nature and flowers in my garden.

Now I easily have 10,000 or more objects in the house if you include every pen, book, toy soldier, and screwdriver.  Yet not one of those makes me happy.  (Which is not to say the lack of say a refrigerator wouldn't negative impact my daily happiness).  By and large, all this extra stuff costs a lot not only in dollars, but time.

I came across an article in the Boston Globe called Too Much Stuff, Too Little Time, which tells me I'm not the only one.
According to the article, people have so much stuff they don't have time to be in their own backyards!

It occurred to me that rather than "investing" in another gizmo, I ought to invest in shared smiles with the people around me preserving both cash and emotional well-being  So today, 7/18/2013 will be day one of a thirty day no buy except food goal.  This sort of thing is always easiest day one;-).  Best wishes! 

When five million dollars isn't enough to retire on.

I have a good friend who met with her financial advisor recently to see if she was on track for her dream - retire at age 50. She's 44 now, an 80 plus hour a week professional who's been burned out for the past ten years. Her advisor told her that her if she wanted to retire at 50, she'd need approximately 6.8 million.

When she told me this, my jaw dropped. Who has that kind of money? And did he know she wasn't planning to eat gold bars for breakfast?

The answer comes from the shocking ability of everyday expenses to erode retirement dreams. The advisor's basic look at it was a six percent return, her living to a ripe old age of 104 (which she has long said she plans to do), a 2 percent withdrawal rate and no worries of ever running out of money.

So why would she need 6.8 million? Her current lifestyle takes about nine thousand a month to support and the advisor bumped it up to 12 taking into account inflation and unexpected expenses.

Does that sound insane? She would say her lifestyle is not luxurious at nine thousand a month. They live in a 2400 square foot home in California, have two cars, and take one nice trip each year.

The nine thousand, very roughly is as follows:

$1600 mortgage/real estate taxes $1400 health insurance $1200 one major vacation a year - usually 3 weeks of foreign travel $1600 food - most meals eaten out $ 600 house maintenance $ 200 car maintenance/gas $ 400 clothes (very well dressed lawyer;-) $ 200 gifts $ 300 medical costs $ 400 entertainment $ 500 electric, heat, computer, phones, television, etc. $ 300 haircuts, hair color, acupuncture, massage, non-comped work expenses, etc. $ 200 pet expenses (including kenneling for long vacations)

The take away for me was how enormous is the cost of a dollar spent in retirement. For every dollar you want to spend, you need many, many multiples of that dollar working hard for you. And the fact is, sometimes those other dollars (your capital) go on strike or get sick - i.e. stock market crashes.

With no more in-flow, all the numbers change. Looked at this way, every dollar of expenses not used in daily living can do double duty on the road to retirement. Saving a couple hundred a month not eating out really does matter. First, those saved dollars can be added to your workforce (the final capital sum you need to retire). Second, your workforce has more breathing space as it doesn't have to support those lazy two hundred dollars that ate out.

So the next dollar bill you hold in your hand, ask is this gal going to enter my workforce or loll around living off the earnings of the other working dollars;-)

P.S  I was shocked to realize I hadn't posted since January 2012 - where does the time go?  I've finished my book and it is with a professional editor.  That has been sheer joy.  I'm about half-way through my second book.  In the mean-time, I've been "frugaling" with enjoyment!  Best wishes!