26 Mar 2016
So here I am, on a Sunday afternoon, and undecided on which of the many, many things I should do next. I could certainly waste time playing Spider (I play the two-decks version, and I’m really good at it, too) but does that help me meet my goals? Probably not. Sigh.
Goals have to be reviewed regularly, and they can change over time. Ours have. When we first moved into Fortress Peschel, it was Chez Peschel, a different thing entirely. The concepts of financial independence, sustainability, and resilience to the slings and arrows of outrageous fortune were not considered as much as they are now.
Financial Independence and ease of operations had always been a priority for both of us and while I was holding down the fort in South Carolina, Bill was learning his new job at the Patriot News and house-hunting. He found our current home and it met our goals of being something that we could afford without financial stress, large enough for the family and the animals, had a yard, and was in the Hershey school district, within walking distance of at least some things, and within an easy commuting distance to work.
That’s a pretty tall order but six months of house-hunting let him do it. If you have the time to search, you will end up with a better house with more of what you need then if you buy in a hurry. Looking at lots of houses trains your eye so you have a fighting chance to see what is missing or will be a problem later on and you discover what matters more to you. Everything on a house can be fixed except the location. I wrote a six-part series on house-hunting that begins here if you want to read up on the subject.
Once we had the house, our goals changed again. We had to pay off the mortgage (did that), we had to fix everything that was wrong with it (still working on that), we had to paint the entire house (90% done now!), we had to design and redesign the yard, and we had to become part of our new community. We’re still working on all that, too.I kept the goal of paying off the house in plain sight in the dining room. I made a graph paper thermometer, like what you see in fund-raising campaigns and every payment was marked on the thermometer. It moved soooo slowly to zero cash owed to the bank, but it did move. It moved faster than it would have otherwise because all our extra cash, whatever it was, went to the mortgage, if we didn’t have other debt to pay off first. Even an extra $10 a month can count.
If this seems like nickels and dimes, it is. What we have found, over and over, and every thrift writer in the world agrees on this, is that it all adds up. An extra cookie a day equals a few extra pounds at the end of the year. Extra money every month at the beginning of a mortgage when the principal payment is tiny and the interest payment is huge will lop a year or more off the mortgage at the far end, not to mention thousands in interest payments.
The thermometer kept the goal of paying off the house in view of the whole family. It was important. It was hung on the wall across the table from where I sit, and I saw it every day.
If you have a financial goal of any kind: emergency fund, credit card debt, student loan, mortgage, money owed to anyone; I highly recommend a thermometer on graph paper. With each payment, fill it in and you can see your progress. When you reach the top, success! Then pick another goal and make another chart.
Save Your Way to Freedom
When you’re out of debt, your financial goal changes. Do you want to become a debt slave again? Most likely not. On the other hand, how about that goal of a year’s living expenses saved up in your emergency fund? This would be separate from your retirement fund, by the way. The year’s salary in your emergency fund will let you weather all kinds of storms like job loss, auto crashes, major health issues, and having your house blown to bits by the tornado.
The year’s income in a savings account will not make your problems go away, but it will make them much easier to cope with. Money is freedom from hassles. Less money in an emergency fund means that smaller emergencies can be crippling. If all your cars die at once and you have $30,000 in your emergency fund, you can buy two used cars and pay cash. If all your cars die and you have $300 in your fund, you’re stuck.
An emergency fund should always be one of your goals, and a bigger one is better.
Protect Your Home
Do you live in a fixer-upper? Then one of your goals should be to fix up the old dump. I’ve fixed up three houses: my house in Norfolk, our house in South Carolina, and our current house. In addition, I’ve made improvements to various rented apartments, and I watched my parents improve two houses. It can be done. You don’t have to be a contractor. I’m not.
It does take time and patience and the willingness to learn new skills. The goal of fixing up your house has an end date. Every room is painted, the electrical systems meet code, the plumbing is water tight, and the roof doesn’t leak. The basement stays dry. That one is super important for many of your other goals, such as where to store months of groceries.
The overall goal of fixing up a house is making it the way you like it so you don’t have to do anything but maintain it afterwards. That is, once I have a room painted, the rugs installed and the drapes hung, I don’t change it. I’m not one of those people who periodically redecorate because I’m tired of how the place looks. That’s a waste of my money, time, and energy.
I do it right, slowly, the first time and then I leave it alone. Dearest Daughter (DD) slowly, slowly painted the kitchen cabinets for us. It took a year, but now it’s finished, and we aren’t going back and repainting those cabinets to change the décor. It’s done.
Our home improvements have all been done with the long-term goal of solving a problem so it stays solved. ClosetMaiding all the closets and painting them from top to bottom in ultra high gloss white? Done. Those closets will never be touched again.
Heavily insulating the attic and lining the rafters with reflecting foil? Done. We’ll never go back up there.
Replacing all the doorknobs in the house with levers, easy to operate and useful when your hands are full or stiff with arthritis? Replacing all the cabinet hardware with D-handles so they can be more easily used by old hands? Done and done.
Repainting all the basement walls in Drylok white, topped with another coat of ultra high gloss white over it to make sure the space is as bright as possible no matter what the lighting source? We’re about 10 percent done.
Replacing all the ancient, crumbling sheet vinyl in the kitchen and the bathrooms? Still on the list. Floors usually get done last as then you don’t have to be careful when you paint everything above the floor. Who cares if you get paint dots on a floor you hate and are going to rip out?
On the other hand, if you have hardwood floors under that antique shag carpet, the removal of the old carpet followed by the sanding, staining, and polyurethaning of the wood has to be done prior to moving into the house. The job is so messy, so awful, that it’s easier to do the whole house at once by professionals and get it over with before you install so much as a chair. I’ve done three houses, two of them prior to moving in and the middle one in stages when we lived in the house. What a pain in the ass that was. Don’t do it to yourself if you have the choice.
As things get done, the house goal shifts over to keeping it maintained. But that’s not all, we shifted our goal to reducing maintenance as much as possible, and we’ll get into that next Saturday.