Tuesday, April 26, 2011

Simplicity (Downsizing, Downshifting, Living Without)

Simplicity (Downsizing, Downshifting, Living Without)

Prov 15:16  Better is little with the fear of the LORD than great treasure and trouble therewith.
Prov.15:17 Better is a dinner of herbs where love is, than a stalled ox and hatred therewith.
Prov 16:8   Better is a little with righteousness than great revenues without right.
Prov 17:1  Better is a dry morsel, and quietness therewith, than an house full of sacrifices with strife.
The “Great Recession” should have been a bit of a wake-up call for all of us. Since 2006, when the first home foreclosures began, our economic prospects have taken one beating after another, and they’re not likely to improve dramatically any time soon.

Our current Great Recession threats, among many others, have come to include:
  • Europe’s crisis with the virtual bankruptcy of Portugal, Ireland, Italy, Greece and Spain.
  • Rising oil prices and war expenses stemming from continuing unrest in the entire Arab world.
  • The economic problems (energy and imports/exports) associated with the Japanese earthquake.
  • The nation-wide problems of unsustainable federal debt, a weak U.S. dollar, a growing entitlement culture, and the irretrievable loss of U.S. manufacturing jobs.
But most Americans are still in denial about what all of this means. At a time when we should be “circling the wagons” with our personal finances, we consumers actually spent more money this past Christmas season than we did in 2007 (which was the official start of the recession, but no one knew it yet).

Teresa and I have been trying very hard to downsize and simplify our lives over the past few years. We’ve never really had a lot of money, of course, and Teresa has always been a full-time homemaker. Our tax records indicate that we’ve had an annual household income of something like $65,000 - $70,000 a year (but with great tax discounts and health insurance) for the last decade or so (our best decade). But life had still gotten unnecessarily complicated for us. So here’s what we’ve been doing.

By selling our larger house in 2009 and buying a much smaller one, we went from having an $1100/month mortgage to having no mortgage at all. When we made this move we also cut our energy bill way down and halved the amount of time it takes for yard work.

We’ve decided to try to keep a primary car that will be a good gas-sipper and absolutely reliable, and another that will be our second car—not one to jump in and go motoring off to California in, but fine for around town. Our second car is paid off, and we hope to keep it for a long time. But our primary car requires a $200/month payment. For now, we’ve just sort of decided that it takes $200/month to keep a cross-county-ready, gas-sipper car. Maybe someday we won’t be prepared or able to spend that much per month on automobiles. If so, we’ll do something different.

Then there are the credit cards. Our smaller house was a real fixer-upper. We spent many thousands of dollars on remodeling it. All of that (beyond what we could pay cash for) went on our credit cards. Since the last quarter of 2010, we’ve been treating our credit card payment like a mortgage payment—to the tune of $1700/month!

We actually feel poorer now than we did when we had to pay $1100/month for the mortgage on the big house (plus, we made more money back then). Almost all of our remodeling has stopped. We have a bare concrete floor in our bathroom, a bare plywood floor in our guest room, no backsplash along the kitchen counter tops, no baseboard in the entire house, etc.  We feel badly for our guests who have to endure these inconveniences when they come over, but we think this is the right thing for us to do for now.

The good news is that at the current rate, we will have our credit cards paid off very early in 2012, and the money going towards the paying down of that debt can then be redirected to more encouraging causes.

In all our downsizing, we’ve definitely lost some things: a pretty wonderful house filled with happy memories, room to entertain almost any number of friends, the pool I loved to sit near, and our freedom from credit card debt.

On the other hand, we’ve come to really love our little house. And we love having a plan that really makes long-term financial sense. 

We believe that there are two ways for a person to feel rich. Either he can make a lot of money, or he can minimize his expenses. We’ve tried to do the latter. And it’s comforting to know that in any real economic emergency, we could do even more.

While it may be a slight breach of etiquette to share details about one's personal finances, our hope is that our story may encourage others to "simplify" where they can, too. So here’s what our long-term, baseline, per-month plan looks like (after our aggressive measures for this year are completed, not including Christian giving).

Energy (both structures)                       $300
Water/Sewer (both structures)            $100
Gasoline                                                $150
Cable Landline/Computer/TV             $145         
Cell Phone                                             $135         
Primary Car                                           $200        
Auto/Cycle/Property Insurance            $325
Property Tax                                          $200         
Grocery Store Items                              $600         
Total per month                                    $2045

It’s better to have just a few possessions and a warm relationship with the Lord than to have great treasure and a troubled heart. And it’s better to eat plain and inexpensive food with those you love than to eat a big steak dinner with people who don’t even enjoy being with one another. And the truly good person who has only a few possessions is happier than the rich person who is not living as he should.
Proverbs 15:16, 17; 16:8; 17:1
totally gutted and cut part of the ceiling out to make a loft 

the toilet is gone and now this is our kitchen/dining area

No comments:

Post a Comment