Save Money, Downsize, & Ditch Your Money Pit!
Credit to Author: Paul Fosse| Date: Mon, 11 Nov 2019 18:05:00 +0000
Published on November 11th, 2019 | by Paul Fosse
November 11th, 2019 by Paul Fosse
Last week I watched a video that has inspired me to write this article. This video reminds and reinforces the process that I’m going through in my life and I thought I would try to generalize it and show it may benefit my readers. In another article I may explore the broader social and political implications, but today, I’m focused on how you can use this minimalist concept to save money and time. It will be useful to both young adults just starting out and older people trying to simplify their lives. It may not apply to those with young children, since that is a phase of your life when your needs are very different.
In this video, he gives a tour of his 1-bedroom apartment that has the following:
After showing his apartment, he comments that since he doesn’t buy or maintain a lot of belongings, he has more time and money to spend on experiences. The part that I found most interesting is where he talks about technology. As we digitize our lives, there isn’t a need to have a big house, fancy car, nice watch, or expensive suit to impress people. People’s social status is now determined by the number of followers they have on the various social media platforms (if they play in that environment) or by their job title if they are in the corporate world (I’ve got a foot in both worlds). He goes on to speculate how in the future, maybe the only belonging that people will own is a VR headset and all their belongings will exist in the virtual world. He states we already are staring at a screen all day. There are a few things (like a toothbrush, a chair, and a bed), that will be difficult to move online, but many of our belongings (all papers, souvenirs, pictures, and many tools) can move from the physical world to the virtual world. He says in the future we may just travel from hotel to hotel, only bringing a few clothes and a laptop and a toothbrush. The hotel will have the bed, TV, sofa, and docking station.
Last month, my 92-year-old mother made the decision to sell the home I grew up in. She fell in January and has been living in a retirement home since then. Once she decided to sell the home in rural Iowa, I was surprised that I had a signed contract to buy the home within a week. I knew it would take some time go through my mom’s belongings, so I set a closing date a month away (November 1, 2019). The difference between this move and every other move that I have done in my life is we were doing radical downsizing. We were going from a 2,000 square foot home to a furnished 150 square foot room. Luckily, my mom and I are planners, so we had been preparing for this moment for 30 years. Every trip back to my mom’s home involved going into a space and helping her go through my father’s belongings. For example, he had 2 US patents he was awarded for innovations in building concrete pipe. Concrete pipe was very much a “CleanTech” industry of the last generation, saving millions of lives around the globe by enabling inexpensive pipe to get sewage away from water supplies. I planned a trip with my family in October to see the dedication of the new building housing the exhibits from the company that his cousin Nav founded and he helped grow. In addition, I needed to help my mom go through her house and find places for her belongings. Everything had to go one of 6 places.
Going through the belongings, it struck me that many of these things hadn’t been used in 10 or 20 years, but as long as we have space for things, we just forget about them and leave them alone. With the help of a local firm that helps people decide what to sell, what to donate and what to throw away, I only had to worry about what to keep and get it to where it needed to go. I used the 4 days efficiently and got everything sorted. When I returned from that trip, I was committed to not have as many belongings for my kids to sort through.
After my 3 kids moved out over the last 5 years, my wife and I have been left with a 3,800 square foot pool home and we only use the master bedroom, bath, the office, and the kitchen. I added up the monthly expenses and the home costs us about $6,000 a month. Some would say to hold onto real estate for the appreciation potential, but having owned many homes over the last 30 years, I’ve come to the conclusion that good money can be made in the business of selling and renting real estate, but owning homes to live in has many unexpected and recurring costs. I would be buying a smaller home if I knew it could meet my needs for many years, but with transaction costs in real estate very high, it doesn’t make sense to buy if you are only staying there a few years. It also allows you to move much closer to your work, since you don’t have to be as picky with a rental as you would be if you were buying a home.
So my plan is to downsize in 2 steps. First to move from my existing home to one that is half the size (about 2,000 square feet), then to downsize again in 3 to 5 years to one even smaller (about 1,400 square feet). To make the first move we must first sell, donate, or throw out half of our belongings which we think will take us about 6 months. This first move should save us about $2,000 a month and the second move another $1,000 a month! This will pay for a lot of vacations!
I’ve spent some time looking at apartments, townhouses, and rental homes. I’ve determined that I can only move to a townhouse or rental home, since apartments in northwest Tampa don’t have charging stations and there are no level 2 chargers by any of the places I spend time (work or gym). There are also no level 3 chargers without driving an hour out of my way. This is of course ridiculous, since a huge number of people will be buying EVs over the next few years. But employers, retailers, and apartments have no idea this major transformation is happening, so even when they build a new parking lot or build new apartments, they don’t even think of putting charging stations in. That will all change over the next 5 years and this will enable us to move to an apartment without a garage. It is also possible we won’t even have a car, but just use a Tesla robotaxi to meet our transportation needs. Why own a garage if you don’t own a car?
As I go through each room, these are the things I have learned:
It may take a month or so to clean out and get rid of unneeded items from each room, so you should allow yourself 6 to 9 months to prepare for the move.
I’ve found Facebook Marketplace for large items and eBay for small items to be the easiest and best way to sell things you don’t need. If I can’t list an item for $20, it isn’t worth listing and selling. I will instead donate the item to a local charity. A yard sale may also be a good choice for the smaller items. You might have a different limit, think about this before you list items.
Find a local charity that does a good job processing donations and supports a cause you care about or use Craigslist or Freecycle to get rid of things you don’t need.
You don’t have to pay a high price for others to haul your junk away. If you can fit it in your car or truck, you can usually take a limited amount to your local dump for free if you show them proof you live in the area. If you can’t fit it in your vehicle, check if it is cheaper to rent a trailer or truck or have someone haul it away. It is usually cheaper to do it yourself.
Try to maximize what you throw away and recycle with your weekly pickups. If you sort through things gradually and make a pile to be thrown when there is room, you may be able to avoid having to pay for a truck or for others to take a big load to the dump.
Make sure you shred any documents with personal information, because people do go through the garbage.
If you are all excited about this, but your spouse isn’t sold on it yet, try to focus on the advantages that you can realize with the move. First, you can move to a place that is more their style. Think about the reduced maintenance in labor and costs that will be realized. You can use that money saved toward any goals that you have talked about, but haven’t had the resources to do. Let them know they don’t have to do it all at once, breaking it up a little each week makes the tasks more manageable.
Earlier this year I had planned to add solar to my house to reduce my energy costs and impact on the environment, but after thinking through that idea, I came up with a better plan of action. Why use solar to air condition space that is unused? It is better to reduce the space used before I convert to solar. Similarly, I downsized my car to the Model 3 when converting to electric. Although I had a minivan before that, I didn’t need that size of vehicle anymore, so I downsized as I converted. I also reduced our number of cars from 2 to 1, since my wife works from home. I could have converted the second car to an EV, but eliminating a car is better both for the environment and for our finances than converting it to an EV.
With Black Friday coming up, all the focus in the media and advertising is on buying more things, but spend part of this holiday time reducing your belongings instead of ever adding to the pile of things you own.
If you decide to order a Tesla, order soon, since they may sell out soon for those wanting to get delivery this year and still get the $1,875 US federal tax credit. Use my Tesla referral link to get 1,000 miles of free Supercharging on a Tesla Model S, Model X, or Model 3 (you can’t use it on the Model Y yet). Now good for $100 off on solar, too! Here’s the link: https://ts.la/paul92237
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Paul Fosse A Software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I’ve also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code: https://ts.la/paul92237