Five Years In: Tight Living Revisited

 

                Last days of winter…daffodils trying to pop a bloom but not quite able…spring is just around the climatic corner… if the groundhog can be believed. This morning I sat in my recliner listening to the quiet hiss of the natural gas burning in the artificial logs of the little stove next to my recliner and enjoyed its warmth as I mused how I would spend this last day of probably the last cold snap of winter.  My second cup of coffee for the morning sat on the stand beside my recliner, an afghan covered my legs and a half-finished hand of solitaire  lay on a tray on my lap…I looked out the window on the opposite side of the room. Framed within that curtained window frame was an amazing variety of birds in the woods…male and female cardinals, robins, chickadees, Downey woodpeckers and a single lost rabbit hopping beneath...all harbingers of spring. There is a certain serenity in bird watching from the warmth of a cozy room…a sense that “life is good.”

                It has been five years now, since I began my retirement. I was scared then…would Social security be enough to meet my weekly and monthly financial needs?  Was I certain I would not outlive my money? Would my health needs be taken care of? Could I survive runaway inflation...what about deflation and recession?   Would my wife be adequately taken care of after I died? Had I figured all the angles and variables, the worst case scenarios …or was I missing some really obvious pitfall? Around the time of my retirement I wrote a short book on the topics of retirement and frugality entitled Tight Living for Tough Times: A Frugal Retiree’s Guide to Thrift. In honesty, the book was as much a blueprint for my own retirement and a salve for my own worries as it was a guide for others to follow.  Everything has not gone exactly according to plan…does it ever?  There was the Great Recession, (I didn’t see that coming!), a couple bouts with cancer (a bit of a surprise!) and, as with many families during the  recession, we had a close relative move back in with us for a bit until she could get back on her feet. But in the great statistical bell curve of life, there were deviations to both sides of the plan. Unplanned shortfalls were offset by unexpected windfalls.  I am writing this present blog to report that retirement has been considerably easier than I had expected. I have gotten into a frugal retirement routine. My budget and schedule are laid-back second nature to me now and yes, “life is good.”

                I want to return to the topics of Tight Living for Tough Times because there is a universality to the themes and subject matter of that book. Everyone is going to grow older. Most people are going to retire. Most people need to be frugal and to be concerned about budgeting. And most people worry about all the aforementioned. I am no thinker, just an average Joe…but since I feel the subject matter is both important and universal; I want to write a few postscripts and insights about my retirement experiences.

                When it comes to living well in retirement on little more than a monthly Social Security check, there is an awful lot of wisdom and insight in some old adages.  For starters,(1) have everything paid off. Social Security stretches so much farther if there is no monthly mortgage payment or rent or car payment. If you are debt free, then social security can all be funneled into the monthly utility bill, gasoline, groceries, good medical coverage and a little entertainment.  In addition to having the house and car paid off, you should have both in good repair and know how to do routine maintenance. A paid off retirement bungalow or cottage is better than a mansion that is eating you alive.

 

(2) Live in an area with a low cost-of-living. It is amazing how much the cost-of-living varies around the nation! My property taxes are very minimal. If the same acreage and home were in a county that abuts ours, my property tax would be ten times more because that county has a medium-sized city whose infrastructure and school systems must be supported by property taxes. In the city there is a monthly bill for trash pickup, and a water and sewage bill. I have a great well for water, a septic system, and I haul a pickup load of trash and recyclables three miles to the free county collection site once or twice a month. We have an excellent tarmac country highway that runs across the front of our property. By the way, our county school systems are first rate.  Probably the best retirement low- cost- of-living area would be in a small rural town. Such communities are friendly, have a number of churches, either a main street or town square, libraries, low crime and hardly any industry. If there is anything I want to do or see in the city, I just drive in.

(3) Live within your means. Someone once defined a life of happiness and a life of misery as follows:

Happiness: income $100; expenses $99.

Misery: income $100; expenses $ 101.

Don’t overspend in retirement; budget so that social security is greater than your expenses. There are hucksters who are going to try to sell us expensive things that we don’t really need to be happy. Let’s compare the value and enjoyment we could get from a Caribbean cruise with the value and enjoyment from a stay at a state inn in Indiana or Kentucky. Both the inns and the cruise have good food in romantic settings. A cruise ship has a deck to walk around on and lots…lots of people. A state inn has a state park for nature walks and not too many people. A cruise ship has a pool and waterslides and spas. A state park has an indoor pool and hot tub in winter and an outdoor Olympic pool in summer. A cruise has a tourist-trap island to visit; a state inn usually has a nearby tourist-trap town to visit. You will most likely fly to your cruise departure port; you will most likely drive to the state inn. Mid-week state inn winter   rates run about $100 for two night stays. Would we really be that much more relaxed and happy from taking a cruise?

(4) Small is beautiful; more is not necessarily better. Even if you are debt free in retirement and own your home, you still have to heat that house. Utility bills are going to be part of your retirement expenses.  It is a lot cheaper to heat 1,000 square feet than 3,000 square feet, especially if the latter has cathedral ceilings. In winter I spend most of my time in our living room.  It has comfortable recliners and a sofa, a good library of encyclopedias and gardening books, a good DVD/VCR collection, and a flat screen TV. Here I can watch old TV comedies or PBS documentaries, write my few words of wisdom or surf the internet, listen to music, play solitaire, work crossword puzzles, bird watch out a window or if I’m really energetic do a few shallow knee bends. Did I forget to mention winter hibernation naps on the sofa? I do most of my cold weather indoor living in my living room. I mentioned earlier the small natural gas stove which keeps the living room cozy ; it also prevents the thermostat from kicking on  the central heating system and heating the entire house. Enough heat flows naturally from the living room to warm the kitchen but the rest of the house stays cool. There is no blower on the stove so unlike the central furnace it doesn’t use or need electricity. If a winter blizzard or ice storm knocks out the electric grid, we still have heat. So I really think small is beautiful; I’ve reduced my small house to the single room where I spend most of my winter indoor hours. I should state that we had our stove professionally installed and we do have a carbon monoxide monitor just to be safe.

                More is not better. Don’t become a hoarder; don’t let possessions own you instead of you owning them. It takes a lot of time and money to maintain and store unneeded equipment, so we have kept it simple. I knew a retiree hoarder who built or bought three storage barns to store possessions he never used.  Too many boats, motor homes, vehicles etc. will drain your income with unnecessary outlays for licensing, maintenance, storage and most importantly insurance. None of these “things” are cheap when you buy them either, even if you get a bargain. With the passage of time it all becomes outdated and worthless. Keep retirement clean and life simple.

                (5)Everyone needs a hobby. This is especially true for a retiree.  For me, a hobby is a job which you love to do; when you wake up in the morning, you can’t wait to get started.  You should also be able to take rest breaks whenever you like and for as long as you please. If after you have worked for ten minutes, you want to sit under a shade tree for fifteen minutes, that’s fine.  Your work day should be as long or short as you choose.  For a frugal retiree a hobby should also either make or save him money rather than be an expenditure.  One person may tinker with small engine repair and resell used lawnmowers; another may choose wood crafting.  My personal passion has been sustainable organic gardening. It is good exercise and challenging both mentally and physically. Also it is a conversation starter and gives me something to talk and think about. My wife loves to cook. Her father was an excellent cook and she follows in his footsteps. With these two complimentary hobbies, gardening and cooking, we are able to reduce our weekly grocery expenditures and have fun.

                What I have written and suggested using these old adages, is a method for reducing expenses so a retiree can “make it” on Social Security and assuring that those considering retirement do not need to be frightened by the prospect of financial considerations. I have tried to verbally attack one budget expense after another. With the first paragraph I tried to eliminate the mortgage payment, the car payment and interest payments from the retirement budget. With the discussion of “living in a low-cost-of-living” area, I tried to show how property taxes and municipal utility bills could be reduced or eliminated. In the “live within your means” topic, I discussed how entertainment expenses should be kept reasonable. In the “small is beautiful; more is not better” section I discussed reducing heating bills and insurance. In “everyone needs a hobby” I discussed how my wife and I used our hobbies to reduce our grocery bill. I have been purposely whittling away at one budget item after another until we can live an enjoyable retirement on Social Security while living within our means. Sharpen your budget pencil and you can do the same.

                No need to worry. A well ordered poverty is a wonderful lifestyle…less stressful and complex than the “middle class” existence we are all taught to aspire to. The simple life can be the good life.