Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

7 steps to downsizing your Home: a checklist

Posted By |

 

Achieving financial independence often comes with dreams of a big house on a quiet cul-de-sac with plentiful space and bedrooms for the family. But during a worldwide pandemic, many homeowners have sought to simplify their life and downsize their primary residence.

To help demonstrate what downsizing may look like, we asked homebuilders and homeowners about the steps they would recommend taking if they were to downsize a home.

Here are seven steps to downsizing your home:

  • Right-Sizing
  • Accessibility
  • What Items Do You Use to Support Your Habits?
  • Do The Hard Things
  • Have a Financial Plan
  • Don’t Get Sentimental
  • Keep Things Only if They Bring You Joy

“Right-Sizing”

At Cullum Homes, instead of downsizing, we call it “right-sizing”! We have been designing and building lock-and-leave luxury homes in this specialized niche market for many years. Steps we would recommend include (1) free yourself from a large lot, pool, landscaping, etc. and the endless expense, upkeep, and maintenance they require, (2) consider a private, gated community with resort access and/or amenities that are maintained by someone else, and (3) before making the move or having a new home built, give careful consideration to the rooms and spaces you want now and might need or want in the future. Don’t become so focused on cutting space that rooms become unworkable. We have actually had clients that cut out too much space, only to return and have us add on later, or build them another larger home! — Rod Cullum, Cullum Homes

Accessibility

As a company that specializes in accessibility lifts, many of our customers are either looking to downsize or reduce the impact of mobility challenges in their homes. Many of our customers find that adding accessibility to their existing home allows them to remain comfortable and surrounded by the things that are important to them. This is often the easiest way to simplify your life. If you do need to downsize, a stair lift can make an in-law suite readily accessible. — JJ Hepp, Arrow Lift Stair Lifts

What items do you use to support your habits?

Having recently downsized our home, we took stock of how we spend our time and what we use in support of our habits. This made donating and discarding unwanted items a lot easier. We also looked ahead at the space we were moving into and how our current furniture and other items would help make this smaller space as efficient as possible. In hindsight, we spend less time maintaining our space and have more free time and a better quality of life. — Steven Brown, DP Electric Inc

Do the hard things

The reality of downsizing a home is that homeowners have less storage space and less living space. Getting rid of things is hard. Doing Goodwill drop-offs or posting items on OfferUp means saying goodbye to lots of memories. But, making the hard decision to part ways with items opens up an opportunity to say hello to a new lifestyle with reduced upkeep and increased savings. Do the hard things that come with downsizing, and your lifestyle will benefit as a result. — Brett Farmiloe, Real Estate SEO Company

Have a Financial Plan

Whenever downsizing is brought to the table, it can be a phenomenal experience. It is quite surprising to learn how you can function on a lean basis, void of clutter and unnecessary items. Continue Reading…

Top 10 tips on becoming Financially Independent (or “Findependent”)

Posted By |

Financial independence is something for which everyone strives. But most of us never get to a stage of financial independence by choice and we reach this stage when we are very old and can no longer work anymore. And although it is not easy to achieve financial independence (aka “Findependence,”) it can be done if you know how to manage your money effectively.

1.) Develop a budget

The first thing that you need to do when you are trying to save money is to develop a budget. To develop a budget, you need to start by figuring out how much money you need to live on each month and then giving yourself an appropriate amount of money to use over the course of the month.

2.) Get a financial planner

If you have had trouble managing your finances in the past, you should consult a financial planner so that you can get the most out of your money. He or she can help you to plan out what you need to spend, so you will be able to figure out how much money you need to save in order to get where you want to be financially.

3.) Create financial goals

Setting financial goals ensures success, because it helps you to get a sense of what you want to achieve and where you want to go on your financial journey. Giving yourself short term and long term goals is usually the most effective way to achieve financial goals, because it allows you to plan and amend your plans as you go.

4.) Pay off your debts

If you have a lot of debt looming over your head, you should make sure that you pay it off before you start actively trying to save. Start by paying off your smaller debts that have the highest interest rate first, so that you won’t have to pay so much later on when the debt has increased.

5.) Get rid of student loans

When most people think of paying off their debts, they forget about paying off their student loans because they are a different kind of debt to your standard credit card debt or loan repayment. There are a few different options when it comes to repaying your student loan, from paying a fixed amount each week, to contributing a percentage of your average income every pay-day. Continue Reading…

Ways to re-plan your Finances during Covid-19

Posted By |

By Donna Johnson

Special to the Financial Independence Hub

COVID-19 certainly has made 2020 a year to forget for some, and as it wraps up with the holidays and new year, many people are assessing their financial situations and determining the next steps. The good news is it does appear a vaccine and more medicines are on the way. But still, getting these treatments out to everyone and getting the virus under control will still take time, so reopening the economy completely may not happen for several months yet. In the meantime, Americans are trying to manage holiday expenses and future budgets until the tide turns.

Covid-19 savings reallocation opportunity

While it may be no fun to miss out on going to your favorite movie theater on Friday nights, or visiting your favorite theme park during vacation, consider the upside of this. The money you may have spent on all those activities is money you can tuck away for better use. Money you don’t spend as disposable income is money you can turn into either savings or investments. There are ways to use it that can be a return on investment if you do your planning right.

Building a emergency savings fund

The worst thing that could happen to you during a pandemic is getting laid off; in which case you will need savings to get by. Unemployment during the pandemic hit a high of about 14.4% back in April. But even if you’re still employed, sudden expenses like HVAC repairs, car repairs, and doctors’ visits still happen. When they do, you’re better off not putting all of those expenses on your credit card, or borrowing money from high-interest loans to pay for them. Instead, consider setting aside about $20-50 per week or per paycheck, let that money sit in a savings account untouched, and over time you’ll see it grow to potentially hundreds if not thousands of dollars in savings. And these savings should not be used for regular expenses like gas or rent, unless you’ve lost your job. But instead, prioritize sudden emergencies like car accident expenses or pipe burst repairs for these savings.

Use the time to refinance and tackle debt

Another thing you can do with extra savings is apply them to any outstanding debt accounts you have. Now one thing to note is that some debts such as federal student loans had payments suspended and interest rates set to zero. Continue Reading…

Time to add $6,000 to your TFSA but consider holding off investing it until after Jan 6th

Posted By |

Happy New Year! However, this first business week of the new year promises to snap investors rudely out of their holiday moods, given political events south of the border.

As of last Friday, January 1st, Canadians could add another $6,000 to their TFSAs, taking their total cumulative lifetime contributions to $75,500. As I outlined in my latest MoneySense Retired Money column, it’s generally a good idea to do this early in January just to maximize the time value of money.

However, I’d hold off committing to particular equity investments until the dust settles, given that this morning’s headlines no doubt focus on the incredible political drama taking place in Georgia on Tuesday, Jan. 5th and then in Washington on Wednesday, Jan 6th.

After this weekend’s dramatic capturing on tape of soon-to-be-ex President Trump’s attempt to persuade the State of Georgia to “find” (aka steal) almost 12,000 votes, both the Georgia runoffs and Wednesday’s supposedly ceremonial formal certification of the state electors votes confirming Joe Biden’s victory promise to be full of fireworks.

Fireworks almost inevitable in Washington this Wednesday

Things were simmering even before Sunday’s saturation TV coverage of what seemed yet another impeachable offence from Trump. Violence from far right-groups fomented by Trump’s fanning the flames in anticipation of Wednesday’s ceremony in Washington already seemed to be in the cards even before this weekend. That can be hardly good for stock markets although pre-market Monday futures were strongly up in the three major US indices.

Add in the ongoing stress of the still-raging pandemic and recent euphoria over vaccines, and the fact US and many global stocks have been hovering near record highs: not to mention cryptocurrencies and Bitcoin, which this weekend smashed through US$30,000 for the first time.

So it hardly seems like there’s a need to rush to invest new TFSA money when all these portents mean prices could be cheaper later this week. Whether this creates yet another proverbial buying opportunity remains to be seen.

Some ideas for how to invest new TFSA money

Those in doubt who would rather invest sooner than later on any anticipated market downturns Monday could always hedge their bets with value-oriented balanced mutual funds or the Asset Allocation ETFs often mentioned on this site, from BlackRock iShares, BMO ETFs, Horizons ETFs or Vanguard Canada. Hard to believe it was just three years ago that the Hub published this blog about these “game-changers”  and they seem to me to make a lot of sense for the large “core” of most portfolios.  Continue Reading…