Are you interested in FRUGALITY and FINANCE?  Then you might find one of these articles handy:

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Homesteading for Retirement by Brenda Curkendall

Go Wildcrafting! by Catherine Lugo

Home Winterization Anyone Can Tackle by Doug Smith

Buying Land at a Tax Auction by Neil Shelton

How to Sell Your Land Yourself and Move on with Your Life by Neil Shelton

25 Ways to Save Money by Karyn Sweet

Free Eats! Combating the Rising Cost of Food by Karen Sweet

Natural Alternatives to Chemical Household Products by Diana Barker

What is Your Homestead $ Number? by Tony Colella

How to Buy a Pickup for the Homestead by Jamie Svrcek

You CAN Afford Your Homestead Dream by Tony Colella


What is Your Homestead $ Number?

by Tony Colella

A while back, there was a commercial that had people walking around carrying “their number.”  The number represented the amount of money each person would need in savings in order to live the lifestyle they desired in retirement.  This effectively pointed out that everyone had a different number, which implies that each had a different idea of how they wanted to live once they reached their “golden years.”

The reality of homesteading life is that you don’t have to wait until you retire to realize your dreams.  You can create these dreams now; by slowly implementing more and more self-sufficiency into your homestead, you will require less and less money in that retirement account.  In affect, you will be lowering your “number” with each self-sufficient project you implement.

You won’t need some huge dollar amount stashed away in various bank accounts.  You won’t be left hoping these investments will kick off enough interest and dividends to provide you with money to live on while not dipping into your principle (cash invested).  So many things can affect what your investments will produce.  I know very smart retirees who conservatively estimated their retirement lifestyle based upon a 6% return.  Now that the recession has arrived, most of those investments are earning less than 1% per year.  Unless they adjust their retirement spending, they will have to dip into their cash savings, which leaves fewer and fewer dollars remaining to earn interest.  Many of these retirees may have to return to work late in their years just to provide enough income to live on.  My grandfather became a Wal-Mart greeter in order to make ends meet after he retired.  He was a wonderful grandpa but not a great financial planner, unfortunately. 

As homesteaders, we invest money and time in our homesteads and ourselves in order to reduce expenses now and well into the future.  Let’s use the installation of a woodstove as an example of a homestead/self-sufficiency project you can do now.  Suppose you were heating your home with electricity this past, frigid winter and, like many Americans, experienced far higher than average heating bills.  If you had a woodstove and your land provides you with trees that you can turn into firewood, you may well eliminate a good portion of that winter electric bill, but it will cost you money (investment) to buy and install that woodstove. 

With the stove installed you are beginning to reduce your “number,” now and into retirement, not to mention enjoying a much warmer home! The amount of money invested in the woodstove will be far less than what you would likely have to save and invest to kick-off the same amount in interest payments each year.  Let’s say you were to go so far as to spend $2,000 to buy and install a woodstove in your home.  Let’s say that this investment saves you $200, or more, a month during the winter.  In a couple of years this stove will more than pay for itself, but consider the alternative.  How much money would you have had to save and invest in order to provide that same amount of winter-month savings year after year?  How long would it take you to save up that amount?  This investment saves you even more when you consider what future costs of energy might reach.  You can ponder those costs as you sit around your warm woodstove during a power outage in the middle of winter.  In my opinion, that’s spending some self-sufficiency time in style!

As you become more and more self-sufficient, you may realize that with enough of these “investments” you won’t have to wait very long before you can retire.  You will have such a low “number” that it won’t take long to create it or put it into savings.   You may need some income as part of that number and some folks choose to semi-retire by working both on and/or off their homestead.  There is no right or wrong way, just what you decide is best for you.   

Challenge yourself to think outside your comfort zone.  Begin by picking one monthly expense that you expect to face each month for the rest of your life.  Figure the average per month for the past few years and then find a way to lower or eliminate that number from your monthly expenses.  This savings decreases the number of years you have to work and save to create a nest egg large enough to live off nothing but interest (and hope that the economy doesn’t erode that principle or its ability to earn interest).   

When you are dreaming of what your homestead might be like someday, consider your expenses and how that homestead can set you free from them.   

Start attacking each line-item in some way now so you can secure your homestead and retirement sooner rather than later.  For most of us, our monthly expenses look something like this: 

  • Rent or Mortgage

  • Taxes

  • Insurance

  • Car Payment

  • Gas

  • Phone Bills

  • Internet Access

  • Electric

  • Water/Sewer

  • Trash

  • Clothing

  • Food

Mortgage and rent can be eliminated in many ways but I suggest buying a mobile home with land for very little money and turning it into a dream homestead.  Real estate taxes are typically much lower on these types of properties as well.  

Property insurance will be less because the value of the property will be less.  Owning your assets free and clear may give you the comfort level of not having to insure everything you have against every conceivable tragedy.  Think about it, what would it cost you to replace your old mobile home with a newer-model, repossessed mobile home?  I have bought many for far less than $5,000 and if you are, in fact, buying a newer mobile home, chances are it will be bigger and nicer.

Buying a good, used car is something you can do right now.  Pay cash or pay the car off as quickly as possible so that you won’t have that monthly payment hanging over your head.  Consider what type of vehicle you will need for your homestead.  Remember you will be doing farm chores with this vehicle so a truck is certainly worth considering.  A good, used car that gets decent gas mileage is probably your best bet for now.  You won’t know exactly the size or type of truck (four-wheel versus two-wheel drive, for instance) that you need until you find your homestead land.  After paying off your good, used car you can set aside that monthly payment to save up for that homestead truck.  These older vehicles will also help reduce your insurance and tax costs (many states have a personal property tax assessed on your vehicles each year).  If you don’t have to commute to work from your homestead you will quickly realize a savings in gas but you still might want to look into diesel vehicles as an alternative. 

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