5 Tips for Helping Your Tax Preparer

by Miranda Marquit · 0 comments

Every year, I bring my documents to my accountant and he prepares my taxes. It’s nice for me to have someone who can fill out my tax forms and file my taxes. However, I also know that it makes sense to help my tax preparer as well.

In the end, we’re both happier if I take the time to organize things before I bring it all in. Here are 5 things you can do to make things a little easier for your tax preparer:

1. Schedule a Time Early On

Everyone’s happier when you schedule a time to meet with your tax preparer early on. I like to schedule my appointment for mid- to late-February. I don’t do it earlier because sometimes my clients are slow to send my 1099s and other paperwork. I want to bring it all in at once, if possible.

Try to have your taxes finished by the end of March. No one likes it when you try to squeeze in an appointment during the first two weeks of April when the countdown has begun in earnest.

2. Organize Your Paperwork

It’s not your tax preparer’s job to organize your paperwork. You should have your paperwork properly organized before you go in. It’s not up to your tax preparer to add up all of your receipts (unless he or she agrees to it — and there’s a good chance you’ll be charged extra). I like to organize my paperwork by type of deduction or credit. This makes it easier for everyone.

3. Call to Find Out What You Need

Call ahead of time to find out what you need to bring in. Many tax preparers have checklists you can use. It’s much easier for everyone when you can bring it all in at once, rather than make several trips to your home and back in an effort to gather everything up and bring it in.

4. Ask Questions Throughout the Year

If you work with a tax professional on a regular basis, it makes sense to ask questions throughout the year. If you have a tax question in June, send a quick email or make a quick phone call. That way, you won’t end up making a decision that hurts you later — after it’s too late. Keeping in contact with your tax preparer makes sense, since you can get regular help, and it also avoids potential snarls later on.

5. Keep Your Tax Preparer in the Loop

When you have a problem with your return, you need to let the tax preparer know as soon as possible. Many tax professionals will represent you to the IRS, so that can be a big help. But he or she can’t help you if he or she has no knowledge of what’s happening. As soon as you receive communication from the IRS, let your tax preparer know so that he or she can take care of it.

With a little planning, it’s possible to make things easier for your tax preparer — and more convenient for everyone.

3 Ways It Pays to be a Financial Pessimist

by Jessica Sommerfield · 0 comments

New Year’s Resolutions are about positive thinking — forgetting what’s behind and looking forward to a clean slate and the potential for achieving goals. While we do need to believe in our ability to make good choices, change habits, and plug away at our goals until we reach them, too much of a positive attitude may lead to disappointment when things don’t go as planned (often due to circumstances beyond our control). Even the superstar of optimism needs a little pessimism in their attitude to prepare for the reality of life. Consider the following reasons why having a pessimistic attitude toward your finances can keep you safe from money troubles and prepared no matter what life throws at you.

Having a pessimistic attitude means steady but sometimes slow debt repayment.
The central focus of many financial New Year’s resolutions is getting out of debt. Those determined to become free no matter how much debt they have, and regardless of their monthly income, may tend to sacrifice security for the sake of achieving their goal. Obviously, getting out of debt is an excellent goal, and it’s not always unrealistic to do it in just 12 months. But sometimes it is. Just as it takes time (often years) to get into serious debt, it can also take time to get out of it. If you’re really serious about getting out of debt, you might take on an extra job, cut the fat from your budget,  sell some stuff, and throw every extra penny you have toward paying it off. There’s nothing wrong with any of this, unless it’s compromising your financial security by putting you in a precarious position.  If you don’t have sufficient savings, allocating too much of your income toward debt repayment may land you in even worse debt. With no cash to fall back on, you’ll have to use your credit card to deal with emergencies.  The key to avoiding this danger is to determine what you can modestly afford to put toward your debt every month without compromising emergency funds or other designated savings.

Having a pessimistic attitude toward your finances means building an emergency fund and expecting things to break.
Contrary to some people’s thinking, a ‘rainy day’ doesn’t refer to being cooped up, bored, and having nothing better to do than spend money. Saving for ‘rainy days’ of misfortune, illness, job loss, or other financially detrimental circumstances is as simple and practical as building an emergency fund. A commonly recommended emergency fund consists of 3-6 months of expenses which you only touch in case of a real emergency; poor planning shouldn’t constitute an emergency. Whenever you dip into your emergency fund, you should replenish it as soon as possible — a greater priority than extra payments toward your debt.

A financial pessimist also strongly believes in the law of entropy. Everything is lapsing into a state of greater disorder and disrepair, and practically, this means your material possessions.  Regular maintenance and replacement of your more expensive belongings is important to factor into your budget, not your emergency fund. Setting aside $20 a month is much more feasible than trying to scrape together several hundred dollars for new equipment when it breaks.

Being a financial pessimist means hoping for the best but planning for the worst in both yourself and others.
I personally like to believe the best of other people and of myself, but I often end up disappointed in both. This doesn’t mean you can’t trust people or believe good will ultimately prevail. Avoiding the dangers of lending to family, declining to co-sign for a loan, and protecting yourself from the temptation of your old spending habits are just a few ways to keep your finances unharmed when you’re let down. After all, we’re only human.

Being financially pessimistic can save you from vulnerability, debt traps, bankruptcy, the failures of others, and ultimately your own shortcomings. Building an emergency fund, paying off debt cautiously, and planning for the worst case scenario will help you get further ahead faster in your personal finances.

Enjoy Winter In-Season Produce for Tasty, Affordable Nutrition

by Gina Blitstein · 0 comments

In the U.S., January and February finds us deep in the dead of winter with no farmer’s markets, no backyard gardens and a different fresh selection in the supermarket produce department than at other times of the year. A different selection, however, doesn’t mean a poor one. While many vegetables and fruits are grown elsewhere and shipped year ‘round throughout the nation, these wintery months are actually the height of the season for certain vegetables and fruits. Buying that which is in season ensures the produce we buy is at its peak and at its least expensive prices of the year.

Look for in-season produce, even in winter; it’s in abundance and therefore often on sale at this time of the year. Then find recipes that feature these vegetables and fruits. Planning dishes according to what’s fresh, abundant and affordably priced is key to getting the most nutrition and flavor for your grocery dollars.

According to a compilation of sources, fruits and vegetables that are in season in January and February include the following (less common ones are briefly defined):

  • Apples
  • Beetroot
  • Belgian endive – a white leafy vegetable commonly used in salads or steamed or grilled
  • Broccoli
  • Brussels sprouts
  • Carrota
  • Cauliflower
  • Celeriac – a root vegetable that tastes similar to celery which can be eaten raw or cooked
  • Celery
  • Clementines
  • Cooking Greens – (such as collard, turnip and mustard)
  • Grapefruit
  • Fennel – eaten primarily for its bulb, it has a subtle yet distinct anise (licorice) flavor; can be eaten raw or cooked
  • Horseradish
  • Jerusalem artichoke (aka sunchoke) – a tuber which tastes like a sweeter, nutty potato and can be eaten raw or cooked
  • Kale
  • Kiwi
  • Kumquats
  • Leeks
  • Lemons
  • Onions
  • Oranges
  • Parsnips – root vegetables related to carrots, most commonly served cooked
  • Passion fruit – a fruit usually grown in South America that tastes similar to a tart mango or a papaya
  • Pears
  • Pineapple
  • Pomegranates
  • Pomelo – a crisp citrus fruit native to Southeast Asia with sweet flesh
  • Potatoes
  • Radicchio – a red and white leafy vegetable commonly used in salads or roasted or grilled with a bitter, spicy flavor
  • Rhubarb
  • Rutabaga (aka Swede) – a root vegetable, similar to turnip, which is a cross between a turnip and wild cabbage and which can be eaten raw or cooked
  • Satsumas (a variety of orange)
  • Spinach
  • Sweet potatoes
  • Tangerines
  • Turnip – very similar to the rutabaga, it is a root vegetable whose leaves can be eaten (turnip greens) and whose bulb can be eaten raw or cooked
  • Winter squash

To zero in on fruits and vegetables grown in or near your specific region, consult this guide: Regional Produce Seasonality Guides.

Many of these foods can be stored for a long time, enabling you to have affordable, nutritious produce on hand without making frequent shopping trips in potentially inclement winter weather. Carrots, winter squash, parsnips, rutabaga, potatoes, onions and turnips, for example, keep well for extended periods of time and can be enjoyed in a wide variety of preparations, including soups, side dishes and stews. Some don’t even require refrigeration for optimal storage. Consult this resource for a comprehensive list of storage instructions for vegetables and fruits.

Here are some recipes that may inspire you to incorporate these in-season foods into your wintertime meals:

Warming Winter Soups
Refreshing Winter Salads
How to Make Roasted Vegetables
Winter Fruit Dessert Recipes

Healthy, in-season produce doesn’t have to only appear on your table in the warm weather months. These winter vegetables add variety and affordable nutrition to your diet even when the weather is cold.

What are your favorite winter vegetables and fruits?

Career Tips for a New Year

by Miranda Marquit · 0 comments

The beginning of a new year is a good time to reflect on what you want your life to look like going forward. While you can set goals anytime, and while you should definitely improve yourself as much as possible over time, the new year is a convenient time to really dig in to your situation, and create a good plan for the future.

One of the things to consider at the outset of a new year is your career. Do you feel stuck in a rut? Do you wish you had a different job? If you are looking for a career change in the coming year, here are a few tips that can help you create a career strategy for coming success:

1. Decide What You Want To Do

Too often all we have are vague ideas of what would be “nice.” Sit down and think about what you want your job to look like, and what you hope would happen with it. Before you can make a plan, you need a clear objective. Make it a point to develop one. Once you know what you want to accomplish, it is that much easier to work toward your career goals.

2. Learn What It Takes

Now that you know what you want to accomplish, you need to find out what it takes to be successful. You can’t just say you want a raise, or you want to work at a new company in such-and-such a position. Go out and discover what it takes to make it happen. Do you need a particular skill set? Is it common to start in a lower position on the totem pole? Learn about what experience, skills, and education are needed in order to reach your goal.

3. Make a Plan

Finally, it’s time to make a plan. Once you know what you need to do, you can make a plan. Sometimes it means going back to school for a certain degree. Other times, you might just need to take a certain course to gain the desired certification. Perhaps you need experience in a certain field, and you can do an internship or volunteer work for a local charity to get that experience.

You might also need to determine what other steps you need to take. Is there a way to contact someone at a company you want to work at? Can you follow him or her on social media? Will you need to update your resume? If you’re asking for a raise, you will need to research information about similar jobs and you will also need to prepare a presentation describing what you’ve accomplished for the company.

4. Break it Down and Execute

Depending on the preliminaries, you might need to break down your plan a little bit. You might need to save up money in order to pay for a course of study. Perhaps you can only take a class or two a semester. You might need to seek out a mentor. Break down your plan into small, manageable steps, and realize that it might take some time to reach your goals. But if you stick to it, you are more likely to succeed.

6 Lessons to Help You Be Your Own Financial Guru

by Gina Blitstein · 0 comments

Money management can be a daunting task. Spending, saving, investing responsibly – it’s enough to make your head spin! It’s no wonder, then, that people look to experts to help them navigate through often murky financial waters. Financial advice abounds from a wide variety of sources and appears in a myriad of forms. Where is a person to turn for advice that will significantly benefit her financial circumstances?

More and more common is the “financial guru” who promises to help you whip your finances into shape and grow personal wealth with a supercharged “system.” They offer advice and often products (books, videos, software, seminars…) to help you follow their plan to manage your money. By appealing to our sense of powerlessness over finances, these very persuasive “marketers” capture our attention with promises of financial empowerment.

There are countless gurus, each with a unique spin on money management. With so many opinions, there’s bound to be some that resonate with you. While there’s nothing wrong with heeding sound advice from a guru, make certain you realize that they’re business people whose product is that advice. Be wary of spending money on their offerings; instead, try to glean the essence of their message and apply it your own circumstances. True financial empowerment will come when you inform and enlighten yourself through copious research, then make your own best decisions.

Some of what can be gleaned from financial gurus in general include:

  1. Money is a resource to be managed – Your money is the fuel that powers your life and the financial stability thereof; it’s incumbent upon you to take charge of it and make the most of what you have. Remember, money management isn’t only about earning; sometimes the best way to manage your money is to enjoy the fact that you can spend some of it to enrich your life.
  2. DO have a financial plan – but not necessarily theirs’ – your own – By educating yourself in financial matters (which includes exposing yourself to a wide variety of information and opinion) you’ll become equipped to pick and choose among strategies to devise your own, individualized money management plan. Keep your plan agile by repeating what works and swapping out that which doesn’t for an alternate approach.
  3. Be both conservative – and bold – Diversify your strategies to provide greater experience with investing, spending and saving methods that are beneficial for you. Make reasonable goals and strive enthusiastically to meet them – that’s the best anyone can do.
  4. There are no guarantees – Whether you follow your own strategy or someone else’s there are no guarantees that you’ll reach your financial goals. When the plan is your own, you’ll know you’re doing what’s best for your circumstances.
  5. There’s no “one right path” to financial success – If there were only one way to achieve your financial goals, there would only be the need for one guru. Since opinions vary, select those that feel right, based upon what you know to be true.
  6. Employ your common sense – When a guru’s message resonates with you, it’s because it’s appealing to your own common sense. Tap into and trust that inner voice to guide you in making your own plan.

There’s no magic bullet to finances; only trial and error. The best thing you can do toward financial success is to educate yourself. Like everyone, you’ll experience successes and failures; gains and setbacks. The important thing is to vigorously take hold of the reigns, don’t get discouraged and realize that no one knows it all – even those who refer to themselves as gurus.

What have you learned from financial gurus?

What’s Your Financial Resolution for the New Year?

by Miranda Marquit · 0 comments

It’s a brand new year, and for many of us that means resolutions. It’s fairly common to set goals for the new year, and often financial goals are among the top items of interest when it comes to trying for self-improvement in the coming year. I’ll be setting a financial resolution for the new year, and I hope will, too.

What are the Most Popular Financial Resolutions?

According to the fifth annual New Year’s Financial Resolutions Study from Fidelity, 54 percent of consumers are considering a financial resolution. The top three resolutions amongst those who say they plan to improve their finances for the new year aren’t particularly surprising:

  1. Saving more (54 percent)
  2. Paying off debt (24 percent)
  3. Spending less (19 percent)

This is a fairly common setup for consumers. In fact, these are the same resolutions that people have had for the last three years. The only difference is that paying off debt has claimed the number two spot, switching with spending less, which used to be number two instead of number three.

These seem to be the basic resolutions that people make when they want to gain control of their finances and build a solid financial base. These are good resolutions that can make a big difference in your life if you are struggling. However, it’s important to realize that you can’t just make a general statement like that and expect to be successful in your efforts to reform your finances.

Instead, you need to be more specific. Instead of saying you want to save more, specify that you want to save an extra $100 a month. You can then look for ways to get that $100 a month, whether it’s making more money or spending less (it can tie into another goal). You need to be able to measure your progress so that you are encouraged to keep moving forward with your goal.

It’s also important to understand that this is more of a journey. Maybe you can’t save $100 more each month starting in January. Start small, by perhaps finding $20 that you can save for January. Then, once you have that $20 as part of your savings, you can add another $20, looking to bring your total of new savings up to $40. Break it down, and make it a gradual effort, and by the end of the year you will have reached your goal — and this is a state of affairs that can continue into the years to come without too much effort.

My Financial Resolution for the Coming Year

This year, my financial resolution is to really get things going on my dividend portfolio. In order to encourage me to focus on building my dividend portfolio, I’m joining an investing challenge with 14 other bloggers. This will encourage me to be accountable for my goal, and keep me motivated to do what I can to whip my income portfolio into shape. I’ve wanted to do it for a long time, but haven’t made it a priority. Now, though, for the new year, I’m putting it first in my finances, and I hope to see good results.

What’s your financial resolution for this year?

Debit Cards Versus Credit Cards: How Secure is Your Money?

by Jessica Sommerfield · 0 comments

Have you heard the news about the latest electronic theft victim? — major retailer Target Corporation. Between Thanksgiving and December 15th, the retailer’s in-store credit card system was breached by hackers, allowing over 40 million accounts to be exposed to theft. The timing of the breach, during one of the busiest shopping seasons of the year, dealt a devastating blow to the retailer’s security perception and its continuing profitability as it faces thousands of lawsuits. While it’s unclear exactly how the hackers retrieved the credit card information, it was most likely accessed by placing compromising software into their point of sale system. The investigation has led to the interception  of counterfeit cards created using the stolen information.

One would think that online shopping is a greater risk, but this incident has many shoppers thinking twice about their purchasing practices. If shopping in a brick-and-mortar store poses just as much of a risk as shopping on the Internet, how can you avoid getting robbed blind? It would be wrong to say anyone is completely immune to becoming a victim of electronic theft, unless of course, you don’t ever use electronic forms of payment. In our society it’s become virtually impossible to do business without ever using a credit card, so there will always be some risk of becoming a victim of electronic theft. There are, however, safer ways to use electronic forms of payment to keep your chances of theft to a minimum, or at least detect it before your accounts are cleared out and your credit history destroyed.

Debit Cards: Better for Budgets, Worse for Security
Debit cards have been heralded as a solution to credit card debt. Because you can only spend what’s in your account, the problems of debt, poor credit scores, and high interest rates are eliminated. However, there is a glaring security flaw to the design of debit cards — they are directly linked to your bank account, and possibly your savings. Nothing can wreak worse havoc with your immediate finances than having your debit card information stolen.  In addition, there are usually few protections built into debit cards to prevent you from permanently losing the money in your personal accounts.

Dealing with Debit
If you prefer to stick with your debit card for electronic spending in spite of the risks, you should find out your bank’s policies about potential theft. Many require you to report the theft within a certain time frame in order to be reimbursed once the incidents are investigated, and may not reimburse you for all overdraft fees. This is why it’s important to keep an eye on your transactions and report anything suspicious immediately.

In response to the Target theft, many banks are setting daily purchase and withdrawal limits on their debit cards to protect themselves as the investigation continues. While this is inconvenient to the card owner, it does keep the impact to both the consumer and the financial institution at a minimum. Even if your bank hasn’t set mandatory limits, you may want to change your own account settings to lower the potential impact of theft on your account.

Credit Cards: Spending Temptation, High Security 
Credit cards are both helpful financial tools and great potential pitfalls. For those who can handle the temptation to spend to the limit, pay off their balances before incurring interest, and use their credit card statements to maintain impeccable records, this is the most secure way to pay electronically. Credit cards allow you up to 60 days to report a potential theft, and won’t directly impact your assets. What’s more, credit card companies often cap the maximum impact at $50 no matter what your situation. There is still, of course, the potential for theft. If you suspect someone is using your card number, you can place a fraud alert on your credit report for up to 90 days before paying for the service.

Again, if you want to be totally safe, no form of electronic payment is a secure as paying with good-old-fashioned cash.

Protect Your Assets: The Basics of Estate Planning

by Gina Blitstein · 1 comment

Few people relish the idea of estate planning, that is, drawing up documents to ensure that their wishes are carried out upon their incapacitation or death. Those wishes can relate to the distribution of possessions and wealth as well as to decisions regarding medical care. Not only does the process bring up the emotion-laden issue of one’s mortality but it also shines a bright light on private and rarely-discussed issues like finances and family relationships. While the process of planning and setting things forth in a formal – and legal – way is an emotionally arduous task, it’s vital to ensuring that one’s wishes are carried out and that your family won’t be burdened at an emotional time with difficult decisions.

Estate planning basics

These documents will ensure that your wishes are carried out:

Will

Wikipedia defines a will as, “a legal declaration by which a person names one or more persons to manage his or her estate and provides for the distribution of his property at death.” Although commonly drawn up by attorneys, one can make one’s own will, so long as basic guidelines are followed. There are software programs that can assist you in making your own will if you determine an attorney to be unnecessary.

According to Wikipedia, only 30% – 50% of Americans die having made a will. Without a will, a person’s assets are distributed by the state which may divvy things up far differently than the deceased would have wished. Furthermore, even sentimental possessions are left to be distributed by grieving family members who will be further traumatized by the task of determining “who gets what.”

Living Trust

LegalZoom.com explains that a living trust is a legal arrangement in which you transfer title to your property from your name to that of a trustee, who can then manage your property. Since you will probably be your trust’s initial trustee, you will still be in charge of your property. A living trust allows for easy organization and management of your assets as well as for an efficient property distribution when you die.

Living Will

In the event you suffer from a terminal illness or lapse into a permanent vegetative state, a living will indicates which life-sustaining treatments you do or do not want applied to you. Should you become incapacitated and unable to communicate them, this document stipulates your wishes so that your instructions regarding your medical care can be known and acted upon accordingly.

Durable Powers of Attorney

A durable power of attorney is a document in which you name a person you authorize to make decisions on your behalf, should you be unable to do so. The word “durable” refers to the fact that that is immediately and continuously in force until revoked or upon your death.

Durable powers of attorney can pertain to financial or medical circumstances. Financial power of attorney enables your agent to handle, access and manage your finances. Medical power of attorney enables your agent to make medical decisions on your behalf, should you become incapacitated.

Make certain that these documents are prepared completely and properly and witnessed and/or notarized as is legally appropriate in your state. Keep the documents in a safe deposit box and inform your will’s executor where and how to access these important papers.

These are the basics of estate management to provide an overview of the decisions that need to be made and the documents that need to be prepared to ensure that your wishes are carried out and that your family’s financial – and emotional – welfare is protected.

Have you done your estate planning?

Do You Know What You’re Paying in 401(k) Fees?

by Miranda Marquit · 0 comments

When many of us think of promoting a frugal lifestyle, we think about things like cutting back on the grocery bill and looking for DIY projects. However, many of us overlook the investment fees we might be paying.

Now, as a new year approaches, it’s a good time to take a look at how you might be paying more than you should be on your investments. One of the first places to look is your 401(k) plan.

How Much Is Your Retirement Account Costing You?

You want to set aside money for retirement, preparing yourself for the future. However, it’s important to note that you should do so with an eye toward what it’s costing you. Investing fees, especially those charged by company plans, cost more than just the yearly fee or other fees. When you overpay your fees, you also miss out on the compound interest you could have been earning on the money that is no longer in your account.

While you can’t avoid fees completely, you can reduce what you pay. The first step is to get educated about what your plan is costing you. You can use a tool like the BrightScope Ratings directory to see how your plan stacks up, and what you are likely paying in fees. In some cases, you might find that you are paying too much.

This might be because you have chosen expensive funds to hold in your account. If that is the case, talk to your HR representative about investing in lower-cost funds. In some cases, the plan administration fees are higher than they should be. There isn’t much you can do in this case, other than ask if there is a way to switch administrators or find some other arrangement.

You might not even be able to remedy your investment choice if there aren’t enough low-cost options in the plan. When you feel as though you are stuck paying high costs, it’s time to take action.

What You Can Do About High 401(k) Fees

If you find that you are paying too much in fees with your employer’s plan, it’s time to take action. You can ask your employer to change things up so that you are able to access lower cost options. If this doesn’t work, though, it’s possible for you to take your money elsewhere. If you are receiving a 401(k) match, it might be worth it to continue contributing the required amount to get your maximum match. However, any amount over that might be more profitably invested in an IRA that you can control. Many IRAs have very low costs, and it makes sense to choose one of these accounts if your 401(k) isn’t meeting your needs.

You can even roll your money over from a 401(k) to an IRA if you are concerned about ongoing costs. Just make sure you understand the process before you begin, and that you are aware of possible tax implications.

There is no reason to pay more in 401(k) fees than necessary. Make an effort to find out what you’re paying, and then see if you can create a situation in which you pay less.

The Simplest Life: Is Paring Down to the Minimum for You?

by Gina Blitstein · 0 comments

Do you ever feel burdened by your possessions and the home you need to maintain in order to store them all? While there’s a lot we can do to declutter and simplify in our current homes, an even more hard-core and permanent solution to the “too-much-stuff” problem is to radically downsize to an extra-small space, like a Tiny House or a recreational vehicle.

Why downsize?

Potential reasons for wanting to downsize include:

  • Financial – Your present digs may cost you more than the value and appreciation you receive in return.
  • Eliminate unnecessary space – Your house may simply be too big for your needs.
  • Maintenance  – There may more work or expense involved in maintaining your home than you’re able or willing to expend.
  • Uncomplicate life – Fewer material possessions can mean less stress and a more streamlined existence.
  • Lessen environmental impact – You may want to live more naturally, creating a smaller environmental footprint.

Advantages of downsizing

Downsizing may be attractive to you for reasons like these:

  • Save money – Living in a smaller space will save you money on living expenses, including mortgage/rent, utilities, insurance and maintenance.
  • Enjoy mobility – Many small living solutions are actually mobile, so instead of being tied to a permanent address, you can park your home wherever you desire.
  • Lessen burdens of accumulated “stuff” – It’s easy to become inundated with material possessions, which tend to drag us down, rather than add value to life. Fewer possessions can mean greater life satisfaction.

Disadvantages of downsizing

Some elements to downsizing may not appeal to you, including:

  • Liquidating possessions – You must be willing to part with much what you’ve accumulated throughout the years. Some of those decisions will be easy and obvious; others heart-wrenching. That process will be time- and energy-consuming as well as emotionally draining.
  • Potential for being – or feeling – cramped for space – Living area will be at a premium which will make having room to move about freely or accommodate guests challenging.
  • Lack of storage – Like your day-to-day living area, storage space will be extremely limited. This is a far more disposable lifestyle than most people are accustomed to living – and is decidedly not for collectors or accumulators.
  • Lack of privacy – These living arrangements make privacy nearly impossible as there is no substantial distance you can put between yourself and anyone else in the residence.

Considerations

It may sound like an ideal way to simplify your life – even a bit romantic to “chuck it all” and get down to the basics. Consider your personality and the personality of others concerned, however, before becoming carried away by a fanciful notion. Will you ultimately be happy without much of what you now own? Don’t sacrifice a sense of self that your personal treasures and well-earned possessions may represent merely for a chance to live this lifestyle.

How to downsize

It’s a tremendous undertaking to pare down your possessions to the absolute minimum you’ll be satisfied living with. In general, it’s going to take these steps:

  • Take a complete, current household inventory.
  • Assign the items in your inventory to one of three lists:
    1. Must Keep
    2. May Keep
    3. Will Dispose Of
  • Decide where in your smaller household the items you keep will go well before moving day.
  • Work on adjusting your mindset to fully embrace the concept that living with less is still living with enough.

It’s challenging to think of being satisfied with less, rather than acquiring more. Living with fewer possessions can be a valid, frugal and rewarding lifestyle for some, however. Downsizing: it’s not just for empty nesters anymore.

Could you downsize and live with substantially less than you currently do?

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