Posts Tagged Debt Free

Wants Vs. Needs

By night, I write about and share my budgeting and personal finance journey. By day, I’m a Grade 7 teacher who recently had the “Wants Vs. Needs” debate with my students as part of a Geography lesson. I’m amazed at the number of students who claimed that their PlayStation 4 is indeed a need that they absolutely could not live without.

It seemed ridiculous to me as I tried to convince them that although they would not like to live without these items (tablets, laptops, and TVs also made their list), they would in fact LIVE if those items were to be taken away from them.

Wants vs. Needs

 

But if I’m going to be completely honest with myself, I too have been guilty of blurring the line between what is a want and what is a need, and blurring that line has lead to overspending throughout my adult life. I could step into Target and within five minutes find ten things I didn’t even know I “needed”.

Part of breaking my bad spending habit was to truly define what in fact are my needs vs. my wants.

Defining Your Needs

After a solid half hour of debate, I finally convinced my Grade 7 class that a need is something that is required to survive and live somewhat comfortably:

  • Shelter (no mansions required)needs
  • Food (Fillet mignon every night for dinner doesn’t count)
  • Clothing (just not those $200 basketball sneakers)
  • Basic Furnishings (one TV is fine, having more TVs than people might be overkill)
  • Access to some form of transportation (including comfortable shoes if your main way of getting around is to walk)
  • Basic hygiene and personal care products (including access to medicine)

 

We could all agree then that anything above and beyond these needs could be classified as wants, and there is nothing wrong with wants, as long as you can afford them and you’re not putting them before your needs.

Once I had a solid definition of what in fact a need is, I found that I became much more content with what I have and the list of what I “needed” became much shorter. I also realized that a lot of those things that I thought I needed have simply become stuff. Luckily Ryan has already written about the purpose of stuff and the questions I need to ask myself as I begin the daunting task of decluttering in an attempt to simplify.

Your Turn! 

  • What item do you now realize was a want that felt like a need at the time (Hint: Mine may have been a red pair of heels)

Estimating Income

I often listen to the Dave Ramsey podcast where people will call in with their money questions. Most of the time he’ll ask the caller what their estimated income is, and I am amazed (and not in a good way) at the number of people who aren’t sure.

When setting up our monthly family budget, the very first information I enter is our expected income. From that number, I then know how much I have to cover our monthly expenses and how much we can save for the future.

money

Let’s look at the three things to consider when estimating what your monthly income is going to be.

  1. Hang on to Those Pay Stubs: If you are a salaried employee (like myself), estimating your monthly income is a matter of looking at what you get paid each pay period and multiplying that by the number of pay periods that month. If you don’t have your pay stubs, go online and see what was last deposited into your bank by your employer.
  2.  Estimate your Monthly Average: If you have a variable income (meaning it may not be the same each pay period), you are going to want to find out what has been your average income. Look over your bank statements for the last year and total up your income (you could also look at last year’s tax information to determine your yearly income). You’ll next want to take that total amount and divide by 12 to figure out what your average monthly income would be.

adding up money

If you are in a field that varies greatly depending on the season, take a look at what you made this month last year to help you determine what you might make this month.

3. Don’t Forget All Sources: Your income does not just include money earned through your job. Don’t forget any other source of income you might have. Other sources of income may include, but are not limited to:

  • Government benefits
  • Investment earnings (if you are not reinvesting)
  • Rental income
  • Child support / alimony
  • Even that tax refund you might be expecting.

If you are self-employed, you may also be interested in what it means to estimate your income in a worst case scenario .

Your Turn!

  • How do you approach the budgeting process?

 

7 Ways To Build Your Own Personal Freedom

7 Ways To Build Your Own Personal Freedom

The world is a crazy place sometimes and I’ve been doing a lot of thinking about what my response should be to it all. It got me thinking about how much I can control and how to build my own personal freedom.  I’ve been doing a lot of planning for 2017 and with it, thinking of how I can make this a year of forward momentum in the right direction.

personal freedom and how to find it

Define What Freedom Means To You

Before setting out on this journey, we need to know where we are going.  The truth is, if you don’t define what’s right for you, there are companies who are willing to guide you down a path optimized for their profits.  Don’t go into this blindly, seize your future and control it.  Carefully examine the ‘why’ behind each thing, because as humans we often think we want one thing, but it’s not really what we are seeking.

Define your values

values of your life to live by

In this world, there are times that you face a situation where you need to make a decision with weight.  What if a friend loses their job and can’t pay rent?  What if you see someone being heckled on the street for the color of their skin, the religion they follow or their gender?  What do you value? What are your convictions?  We don’t often define these, but I’ve found them useful to just spend 30 minutes reflecting and writing them down; it brings clarity and gravity.

Build An Emergency Fund

Money isn’t everything in this life, but it certainly helps when you have a nest egg set aside when things go awry.  Having an emergency fund can give you something to lean on so a setback doesn’t totally derail your progress forward.  This is certainly a case for ‘an ounce of prevention is better than a pound of cure.’

Regain Control of Your Food

grow your own food

When you get down to it, we need very little in life, but there are a few things that we simply can’t do without.  One such thing is food.  Taking control of your food means you can eat healthier, fresher and know what is going into your body.  There are many things that we can get by without, but the truth is we always need to eat.  So connect with local farmers, join a CSA or even better, start a garden.  Gardening is good exercise, is very economical and a fantastic stress reliever.

Become More Valuable

Every human has value, but what could you do to increase value to others, particularly in ways that lead to a paycheck?  Every time I’ve ever been in a tough spot financially, I am always thankful for having certain skills that others find valuable.  For me it’s strategy, business building, and marketing: essentially helping other people make money.  In a pinch, I can leverage those skills and talents to bring in a little more income.

Get Handy

We all can’t be a master craftsman or a pro mechanic, but we can do things to offset some costs and become more self-reliant.  It is scary when I meet someone who drives every day but doesn’t know how to change a tire.  Do you know how to shut off the water to your house if a pipe breaks?  Could you build something out of scrap wood in a pinch?  When  I was building my tiny house, I learned a lot of different skills.  These things translated to me having more confidence, more money and when I did decide to hire someone, if I could talk the talk, the price was often lower.

Root Out Your Weak Points

We all have weak points. We all have points of failure that could lead to disaster.  While there are some things we can’t prepare for, consider what things could happen that would lead to a major break down for you.   What if you lost your job?  What if the power went out?  What if there was a gas shortage for a week?  All three of those things have happened to me and I work to have plans for each of them.  Take some time to identify your weak points, rank them by highest chance of occurrence then develop plans for them.

Your Turn!

  • What other things are you doing to build your personal freedoms?

 

3 Tips To Save Big On Your Tiny House Build

Understanding how a home comes together is important  when it comes to saving time and money, but really knowing how it all comes together means won’t just save you a few bucks, but thousands.  Here are 3 ways I save major cash during my build.

1. Buying materials in larger chunks

If you know how it all goes together, you can plan ahead in your material purchases.  Most big box stores will actually give sizeable discounts.  For me, I was able to save 15% on everything just because I knew how my house was going to go together.  That meant I saved $4,500!

2. Knowing how design choices impact your build

When I totaled up my total house weight, I realized that if I could shave off 100 lbs it would allow me to get a smaller trailer that was $997 cheaper.  I decided to go with a fiberglass shower pan instead of tile and save almost $1,000!

3. Design for efficient material usage

When you build a tiny house things are best done in 4 or 8 foot spans.  This is because most materials come in these dimensions.  Plywood comes in 4 x 8 foot sheets, walls are framed at 16 inch intervals, 3 x 16 = 48 (or 4 feet), etc etc.  If you work with these dimensions in mind, you can save time with less cuts and money with better material management.

 

Here’s the point: A greater understanding of building saves thousands of dollars. 

how-to-build-softcoverThat understanding is exactly why I wrote my new book: How To Build A Tiny House.  I designed this book to give you step by step instructions on how to build your own tiny house using any set of plans or your own design. I give you the background knowledge to expertly navigate the building process with confidence, avoid common mistakes, and answer your questions at every step.This guide is for the absolute beginner.

 

 

Want to learn about building, save thousands & build your dream home with confidence?

 

Learn more about How To Build A Tiny House
Click Here

 

Five Things To Do Before You Build Your Tiny House

five things to do before building a tiny house

While that deciding to build a tiny house is exciting, I realized that I needed to get my butt in gear and accomplish a whole slew of tasks before I’m ready to buy a trailer for my tiny house on wheels build. Today I’m sharing my to do list with you, and I hope it can help you prepare for your build too – whether you’re starting next week or next year.

1. Be Sure It’s What You Want

This seems like a given, but there’s more at work here. If you want a tiny house because you think they’re cute, you might need to do a little more soul searching. If you want a tiny house because it’s the logical next step in creating a more intentional way of living, well…now we’re getting somewhere.

Me, on the porch of Jay Shafer's original tiny house

Me, on the porch of Jay Shafer’s original tiny house, wearing unflattering pants.

How do I know a tiny house is right for me? Well…

  • I’ve wanted to build my own house since I was eight years old.
  • I love small, cozy, confined spaces.
  • I’ve always been passionate about good design and creating homes full of personality.
  • I want to learn new things, because it improves my life and makes me a better person.
  • I want to feel the pride that comes with tackling a big project.
  • I care about my impact on the environment.
  • It does not make sense for me to buy a traditional home because I don’t know where I’ll end up settling down someday.
  • I’m a tiny person (5’2″) with very little stuff and few worldly needs.

Your reasons might be different. Be honest with yourself and trust your gut! You know yourself and your own motivations.

Tips:

  • If you are going into a tiny house build with your partner or family, agree going in that if anyone decides they’re done with the tiny house life, that you’ll both/all find another living solution. Not feeling trapped will work wonders when it comes to living peacefully together in a tiny house.
  • If you’re on the fence, there are other ways to live smaller without building a tiny house. Even just downsizing to a small house or apartment can dramatically change your outlook.
  • At the end of the day, a tiny house is just an object, and objects don’t change your life for the better. Only you have the power to do that.

2. Connect with Tiny House People

Connect with Tiny House People

Tiny house people love nothing more than sharing pizza and beer.

Even with the wealth of information available online, you’ll still have questions that can only be answered by people who have gone through the building process. Also, tiny house people are just plain cool and interesting and definitely worth knowing!

I’ve been lucky to meet so many wonderful members of the tiny house movement through my work, but to get here, I had to seek them out myself. As an introvert, this is much easier said than done. In the beginning, I had to do a lot of hunting to find other people who were just as excited about tiny houses as I was.

Tips:

  • Meetup.com is a goldmine. If you’re in a major metropolitan area, chances are high that there is a tiny house enthusiasts meetup nearby. If there isn’t one already, why not start a group yourself?
  • If there isn’t a tiny house meetup group, search for related groups about minimalism, gardening and permaculture, or prepping, and you’re bound to meet other people who are interested in tiny houses!
  • Tiny house events are popping up all over the country, and they’re a great way to meet cool folks. If you’re pretty convinced you’d like to live tiny, the Tiny House Conference is a great place to make friends and ask people your questions.
  • Don’t just hound people on the Internet, begging them for a tour of their tiny house. Form strong give-and-take friendships with tiny house folks just like you would with anyone else.

3. Pare Down Belongings

Downsize and declutter

I once owned over 300 books. I now own 30.

Paring down your stuff is a huge part of living the tiny life. Last summer, I moved to Charlotte from Boston, and I took the move as an opportunity to bring only the things that could fit in the back of my Honda CRV. I got rid of two thirds of my clothing and 90% of my books – something I thought I could never do – along with decades’ worth of accumulated crap from my school years. It was surprisingly easy to distinguish trash from treasure once I got in to a rhythm. Driving down the highway to my new home, with a trunk full of my most precious possessions, was a liberating feeling.

Tips:

  • “Have nothing in your house that you do not know to be useful or believe to be beautiful.” – William Morris
  • For analytical minds: try the box method. Empty the contents of a drawer, closet, etc. into a big cardboard box. Each time you use an item from the box, it can return to the drawer. Whatever remains in the box after three months is something you don’t need in your daily life and you can safely donate it.
  • For intuitive minds: If you have more of an emotional attachment to objects like I do, I highly recommend the book The Life-Changing Magic of Tidying Up by Marie Kondo. It has gone viral for a reason, and I couldn’t have decluttered without it. That book is worth its own blog post, which I will write soon.
  • Budget enough time for this crucial step. One tiny house family I know took a whole year to declutter.

4. Assess Needs

Assess Your Tiny Home Needs

Dee Williams’s petite vardo at the 2015 Tiny House Conference.

This is what Dee Williams from Portland Alternative Dwellings calls “playing anthropologist.” A lot of what we think we need in a home is marketed to us through building trends and realtors. A tiny house is a chance to shed the excess and create a home that fits you like a glove. For this step, I wrote a big list to brainstorm all my weird quirks and how they affect my interaction with my living space.

For instance, I noticed that I never use more than two stove burners at a time, but I do use my oven very frequently (roasting vegetables is the most reliable way to trick myself into eating them). For me, an oven would be a necessity.

I find that I spend most of my leisure time lounging around in bed rather than on the couch. Aside from sleeping, I do all my reading, drawing, writing, and music-listening in bed. I’ll probably forgo a lounge space in favor of a dining area, and design a luxurious sleeping loft that will double as my creative haven.

I also dye my hair monthly, so an open shower stall won’t work for me unless I want to flood my whole house as I rinse out the dye. I think a stock tank bathtub would work well for me.

Tips:

  • Try the Post-It Note Method: Stick a Post-It Note next to each doorway in your home. Every time you leave a room, write down what it is that you’re doing in each room. After a month or so, get a glimpse into how you actually use your space.
  • Design for the life you have, not the one you want. This is the equivalent of keeping “skinny pants” in your wardrobe. You want to feel comfortable in your home, not guilty.
  • If you have hobbies or accoutrements that require a lot of space, consider outbuildings or off-site storage, or outsourcing that hobby to a different location (e.g. an artist’s studio).
  • Remember: our needs are surprisingly few and easily met.

Step Four: Figure Out a Floor Plan

Tiny House Layout

My latest tiny house layout, which I have already overhauled completely.

Right now, I have a folder on my desktop with 39 scanned, hand-drawn floor plans. To be fair, I’m a big nerd and I’ve been drawing these for four straight years. But whether it’s digital or on paper, it’s important to translate your design ideas into a visual medium.

There are lots of great ready-made tiny house floor plans on the market. We’ve reviewed our favorite plans to help you pick the one that’s right for you – click here to check it out. But because everyone’s needs are different, don’t be afraid to modify an existing plan to better suit your lifestyle.

Tips:

  • Carry a measuring tape with you wherever you go. Measure chair heights, counter widths, the rises and runs of stair steps – it’s important to know common dimensions of different elements so you can accurately plan for them.
  • Measure yourself! Know how much space you need to feel comfortable. My needs as a 5’2″, 130 lb. woman will differ from the needs of a 6’3″ 275 lb. man.
  • Don’t forget to design space for your clothes hamper, kitchen trash can, recycling and compost bins, suitcases, bulk paper goods storage, brooms, and other cleaning implements.
  • Include empty storage space in your design. Because you’re alive, you’ll probably still acquire new things after you move into your tiny house. Give yourself some wiggle room.
  • Strive for an excellent design, not a perfect one. If you stress too much about getting things absolutely perfect, you’ll never get off the ground.

5. Work with an Expert

Great Ideas always begin on a napkin

Great ideas always begin on a napkin.

Optional, but highly worth it. Even if you have a pretty strong grasp on what you’re doing in terms of your design, it never hurts to have an expert offer their advice. At the Tiny House Conference after party, I hungrily listened to Lina Menard and Ethan Waldman as they gave me feedback on my tiny house design, which I drew on a napkin in pink pen. I’m currently collaborating with a professional plan designer and draftsman to hash out a solid layout and set of building plans, which is terribly exciting!

Tips:

  • Try to find experts who have experience building tiny houses. It’s important for folks to have the skill of translating theoretical designs into tangible structures.
  • If you can’t afford a consultation, buy or borrow a copy of A Pattern Language. It’s a great manual for learning the psychology of vernacular architecture (a.k.a. how to build a house you feel good in).

6. Create a Budget

Christian and Alexis of Tiny House Expedition made their dollars stretch during their tiny house build.

Christian and Alexis of Tiny House Expedition made their dollars stretch during their tiny house build.

Ideally, if you’re ready to build within a year, you should have enough funds saved up to at least get started. If you’re not careful, a tiny house can become a money pit if you don’t budget and track your expenditures.

My plan is to build in stages. I’ll first finish the exterior, so that the unfinished inside is safe from the elements. I can then take my time finishing the interior and saving up for some nicer appliances. Since I live in Charlotte and it’s pretty warm here, I might even move in early and live in the house while I’m still working on it to pour even more money into the build. I’m planning for the build to take a long time, but I know I’ll have a more rewarding learning experience that way.

In terms of saving money, it’s important to have a savings account just for your tiny house so that your funds don’t get mixed up and accidentally spent. I know that I’m the kind of person that will spend all my savings if they’re accessible and unallocated. I use SmartyPig.com to keep my tiny house savings separate, which is free and easy to use and I can’t recommend it highly enough.

Tips:

 

So what are the next steps as I move toward building my tiny house? Tune in next time for part two of this topic!

Your Turn!

  • Which step will be the easiest for you?
  • Which step will be more challenging?