Can I afford to be a downsizer

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Can I afford to be a downsizer
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mbeirnes1
Guest

Posted: Thu Oct 28, 04 3:51 pm Post subject: Can I afford to be a downsizer

Hi

I thought that I would start a thread on how to affrd to downsize. Probably a question on everyones lips when they decide that this is they way forward.

Firstly I think that you need to consider why you want to down size.
Normally there are two routes to this. Those that have to and those that want to. Of those that have too this may be due to a multitude of reasons.... redundency, retirement, ill health, and other personal circumstances. For those that choose to it is normally to exchange one way of life for another (normally with the view that less money will produce nore time).

Which ever the reason, finances have to be taken into account or else more stress will be caused. One of the best tips that i have had was to do a four section plan.....

Firstly list all you assets if you were to sell oup and be left with nothing except the clothes you are wearing. Secondly list all your Debts including mortgage through to that fiver you owe the bloke know down the Pub.
Now if you subtract the debts from the assets. This hopefully will give you a positive figure of your net worth.

Now do the same with your income and expenditure (include everything from bills, holidays to mars bars bought on the way home)
This will give you the amount of saving or the amount of mounting debt you have each month.

The two figures that you have should be part of you decision to downsize.
This financial health check should be undertaken every month just to keep you on track. I took the idea from a book called 'downshifting'.
It may be a grind for half an hour nbut it puts you in the picture very clearly and you are informed when making your decision to down shift.

Debt management is whole subject to itself and I am sure that we can start another thread on that some time

I would be interested how every one else keeps track of there finances?

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28235
Location: escaped from Swindon

Posted: Thu Oct 28, 04 4:19 pm Post subject:

It sounds a good approach.

I think another thing needed is to be brutally realistic and pessemistic When you buy a new place, you may not appreciate for example structural issues with where you buy. Equally bad as pensions etc are now, there is no reason to believe things can't get worse.

Unlike certain celebs

downsizing is for life, and a miscalculation could turn a heavenly idea into a hellish poverty trap.

jema

Guest

Posted: Tue Nov 02, 04 1:11 pm Post subject:
Totally agree, but also what the surveyor wont tell you is thye lay of the land and what it is good for, drainage, water supplies, soil quality for crops etc? It is a minefield

mbeirnes

Joined: 28 Oct 2004
Posts: 100

Posted: Tue Nov 02, 04 1:12 pm Post subject:
Sorry forgot to login last post was me

Blue Peter

Joined: 21 Mar 2005
Posts: 2400
Location: Milton Keynes

Posted: Tue Jun 21, 05 10:25 am Post subject:

I'll resurrect this topic if I may.

Bouyed on by the "If I had the nerve, I would" thread yesterday:

https://forum.downsizer.net/about4670.html&highlight=

I discussed the possibility of fairly serious downsizing with my other half. Since she is the more practical side of our less-than-dynamic duo, she immediately came up with the "and what would we do for money? How would we pay the council tax, water rates, electricity bill...? How would we buy clothes, new shoes for the children...? How would we....?"

Being a big picture sort of chap, I didn't have immediate answers for these questions. Are there any? Or at least hints? How much (or little) money do you need? How much (or little) could you earn from some land and not much else (skills-wise)?

Peter.

Behemoth

Joined: 01 Dec 2004
Posts: 19023
Location: Leeds

Posted: Tue Jun 21, 05 10:48 am Post subject:
The eternal question. I once did a bottom line sum of what you need to cover your basic bills and then a bit on top for essential extras (such as shoes). It was quite scary. As mentioned before none of the here and now of downsizing suecures your future in terms of income, pension, illness etc. For a couple with kids I think one of you would have to keep working to cover these basics.

tahir

Joined: 28 Oct 2004
Posts: 45670
Location: Essex

Posted: Tue Jun 21, 05 10:54 am Post subject:

How long is a picec of string?

I think this depends mainly on three factors:

1. The amount of debt you need to service

2. The material sacrifices you'd be prepared to make

3. Your skills at selling yourself or products/services

The acreage (11.5) I was looking at could have kept us fairly self sufficient in terms of food and energy (coppiced woods) but I think we'd have had to look further afield to make money, we'd thought about some fairly small scale enterprises that we could set up but to succeed you need to have some confidence in your abilities and a serious work ethic.

Blue Peter

Joined: 21 Mar 2005
Posts: 2400
Location: Milton Keynes

Posted: Tue Jun 21, 05 11:03 am Post subject:

tahir wrote:

How long is a picec of string?

About the same length as a piece of string?

tahir wrote:

The acreage (11.5) I was looking at could have kept us fairly self sufficient in terms of food and energy (coppiced woods) but I think we'd have had to look further afield to make money, we'd thought about some fairly small scale enterprises that we could set up but to succeed you need to have some confidence in your abilities and a serious work ethic.

That's what I feared

. Do you think that you'd have time to manage 11.5 acres and set up some enterprises?

Peter.

judith

Joined: 16 Dec 2004
Posts: 22789
Location: Montgomeryshire

Posted: Tue Jun 21, 05 11:04 am Post subject:

1) Make a business plan. Work out all your outgoings. Start with the mortgage, council tax, pensions, etc. Then add in essentials like food, clothes and fuel. Then add in all those things that make life worthwhile - do you really think you will never want another holiday or buy a CD? Work out the totals and then add on at least 25%.

2) Get rid of your debt. And that includes the mortgage. If you have any spare cash - chuck it at the mortgage. It is probably your largest outgoing. Do everything in your power to get rid of it.

3) Develop new skills. Learn a trade. Check out your local college.

4) If you want a piece of land and can afford it, then good. But don't rely on it as a source of income. Use it as a tool to reduce your outgoings and if it brings in a bit of cash, then great. But don't think you are going to pay your mortgage on a couple of acres of land.

Northern_Lad

Joined: 13 Dec 2004
Posts: 14210
Location: Somewhere

Posted: Tue Jun 21, 05 11:05 am Post subject:

Blue Peter wrote:

tahir wrote:

How long is a picec of string?

About the same length as a piece of string?

I always find double half the length to be a more accurate measure.

tahir

Joined: 28 Oct 2004
Posts: 45670
Location: Essex

Posted: Tue Jun 21, 05 11:08 am Post subject:

Blue Peter wrote:

Do you think that you'd have time to manage 11.5 acres and set up some enterprises?

Yes, automatic irrigation and mostly permaculture type of things, no livestock except chickens. I reckon we could have done it fairly easily. We're also both grafters which helps, both done 18 hr days and 7 days a week.

If you're after a rural idyll of sitting in the sun drinking your elderflower champagne then i don't think that's feasible unless you've got loads of money or no material wants.

Blue Peter

Joined: 21 Mar 2005
Posts: 2400
Location: Milton Keynes

Posted: Tue Jun 21, 05 11:15 am Post subject:

tahir wrote:

Yes, automatic irrigation and mostly permaculture type of things, no livestock except chickens.
.

Are there special water rates for agriculture? My water bill with very little garden watering is high enough. Goodness knows what it would be on 11.5 acres.

tahir wrote:

I reckon we could have done it fairly easily. We're also both grafters which helps, both done 18 hr days and 7 days a week.
.

But with 3 under-5s?

tahir wrote:

If you're after a rural idyll of sitting in the sun drinking your elderflower champagne then i don't think that's feasible unless you've got loads of money or no material wants.

That would be nice, but I know that's unrealistic. It's more working out what is realistic, and not half-killing yourself in the process,

Peter.

tahir

Joined: 28 Oct 2004
Posts: 45670
Location: Essex

Posted: Tue Jun 21, 05 11:20 am Post subject:

Blue Peter wrote:

Are there special water rates for agriculture? My water bill with very little garden watering is high enough. Goodness knows what it would be on 11.5 acres.

I think so, but we'd have only been irrigating (regularly) an acre or so and we'd have been water saving and grey water recycling.

tahir

Joined: 28 Oct 2004
Posts: 45670
Location: Essex

Posted: Tue Jun 21, 05 11:23 am Post subject:

Blue Peter wrote:

But with 3 under-5s?

I've got nothing against child labour, the 3 year old helped me weed the other day, I think she'd have made a good chicken rancher.

We were hoping that the in-laws would be moving to the vicinity if not an annexe (if we'd got consent) so we'd have had it a bit easier than most.

gil
Downsizer Moderator

Joined: 08 Jun 2005
Posts: 18415

Posted: Tue Jun 21, 05 12:25 pm Post subject: downshifting

agree with prudent stuff that's been said so far in this thread. And following on from the other message thread of 'if....'

do the sums (as suggested). factor in for emergencies. have an exit strategy just in case.

acreage per se is not the issue, it's what you do with it. 20 or even 100 acres of hill grazing for sheep could be fine. Depends what state you're in too. At present I can't cope either financially or physically with 2.5 acres (market garden, orchard and wood / wilderness) and a 20hr a week day job.

What is feasible for 2 people with 1.5 jobs between them is not for one person with (now) half a job. It is also a lot more pleasant to have someone else to share hopes and fears, make plans with, rejoice with, moan to. And the rain and the midges get me down. Having a bad time, scuse the moaning. But there are downsides to downsizing. Almost wish I could downsize back to an inner city 2-up 2-down. But then I look around me...

I'd also like to know how much / little money should make my situation feasible. It's petrol / travel and fuel costs that make the hugest dents in the budget - living in back of beyond somewhere coldish. Heating oil price has almost doubled in the last year. Also car repairs that I can't do (having an old banger) and boiler system repairs. never mind structural stuff on the house (big scary things that my mate who's a builder won't tackle).

good luck to all of you on this forum trying to downsize in whatever ways

cheers
g

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