Cut Your Living Expenses w/o Lowering Your Standard of Living

OneEyedDiva said:


Not very practical. Do you know how many people can't trust their children with financial and estate matters? I read a story about a son who took over his mother's house and wound up putting her out...she was elderly too. People get very greedy and untrustworthy when money matters surface. Just watch what happens when someone dies and doesn't leave a will. Even for the children who can be trusted...many Gen X'ers today are having such a hard time keeping their heads above water and managing all they have to manage, like someone said...why would they even want that additional headache?
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Some children have even murdered their parents to get their inheritance early.

Most murders are by someone the victim knows.

.
 

Colleen said:
no way!!!
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Why not? I moved around a lot when in my twenties and had several roommates. It was a very good way to reduce costs, and by and large we got along extremely well. My husband is technically my longest term roommate and that's also been highly successful.

To cope with limited finances I could think of many worse living arrangements than a roommate and very few better ones.
 
When you're in dire straits, you gotta do what you gotta do, accept it and make the best of it. Even a roommate you don't much like beats sleeping under the bridge.
 

StarSong said:
Why not? I moved around a lot when in my twenties and had several roommates. It was a very good way to reduce costs, and by and large we got along extremely well. My husband is technically my longest term roommate and that's also been highly successful.

To cope with limited finances I could think of many worse living arrangements than a roommate and very few better ones.
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I'm not going to be destitute. I'm not living with someone I don't know. I don't trust that many people now...why would I trust my life and my belongings to a complete stranger???
 
Butterfly said:
When you're in dire straits, you gotta do what you gotta do, accept it and make the best of it. Even a roommate you don't much like beats sleeping under the bridge.
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I highly doubt I'll be forced to "sleep under a bridge" and I disagree a roommate you don't like beats it. Why would I want to live with a total stranger that I have no idea what they're like or what they're capable of doing?? Why would I want to spend the rest of my days with someone I don't like??? YIKES!
 
Why do you assume a roommate would have to be a complete stranger? Surely, a widowed elderly person (male or female) would have friends or familiar acquaintances in similar circumstances who would prefer being a roommate to living a solitary existence, as well as saving on living costs. Surely, one of these people would be compatible to share a home with.
 
Colleen said:
I highly doubt I'll be forced to "sleep under a bridge" and I disagree a roommate you don't like beats it. Why would I want to live with a total stranger that I have no idea what they're like or what they're capable of doing?? Why would I want to spend the rest of my days with someone I don't like??? YIKES!
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I think people were trying to be reassuring and offer helpful advice because it sounded like you were concerned about your possible future living conditions.
 
StarSong said:
I think people were trying to be reassuring and offer helpful advice because it sounded like you were concerned about your possible future living conditions.
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I understand and appreciate the concern....really, I do, but I'm not going to be like a lot of widowed women that are scraping to exist. If that would be the case, I'd consider sharing a place with someone. I'd have to REALLY check them out first...and their family and friends. I was raised an only child, so I enjoy being alone. I've also had a lot of bad experiences with people I trusted so I'm very guarded now. I do not open up to any one or associate with any one but my husband and family. I'm happy and I would continue to be a recluse. I'm also very frugal so I'm sure I could manage on my own. It does concern me but living with another person would not be an option for me.

Besides...life is unpredictable...who's to say I'll be the one left behind??
 
KingsX said:
Interesting... thanks for posting.

Many times I have watched HGTV buyers trying to save money spend twice as much in a third world country for less than half the size of my house here in urban North Texas. Oh, and they always want to live next to all the "shops and restaurants" [so much for "saving money."]

Most of HGTV's US home buyers are spoiled prima donnas who will cringe at the color of the counter tops but never look at the roof, HVAC or plumbing [not as sexy.]

But the most ironic of all are "tiny house" buyers who complain it's not roomy enough and the bathroom is too close to the kitchen [duh!]

.
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Some of the things the homebuyers do and say makes no sense at all KingsX. I agree with all the things you pointed out. I love HGTV home buying episodes near ocean, lake, water, etc. I've seen the "prima donnas" you're talking about. They also act like they never heard of curtains, drapes or blinds. "Oooh the neighbors can see right inside our bedroom". I once saw a family of six choose a tiny house. I saw another mother of 5 I think, with a dog choose a 2 bedroom condo and she had the choice of a bigger place. I have no idea how the hell they can live that way. Do you wonder how the young people can afford to pay so much for these houses? We're talking the $800,000 to $1.5 mil range and they want to be able to eat out, shop and entertain! One more thing that gets me. Are they all coached to say (about the deck or balcony). "I can see myself out here having my morning coffee." Out of all the shows I've watched, I think there were only about 5 episodes where nobody said it. Who says "morning coffee"? It's coffee or cup of coffee, at least where I'm from.
 
OneEyedDiva said:
Some of the things the homebuyers do and say makes no sense at all KingsX. I agree with all the things you pointed out. I love HGTV home buying episodes near ocean, lake, water, etc. I've seen the "prima donnas" you're talking about. They also act like they never heard of curtains, drapes or blinds. "Oooh the neighbors can see right inside our bedroom". I once saw a family of six choose a tiny house. I saw another mother of 5 I think, with a dog choose a 2 bedroom condo and she had the choice of a bigger place. I have no idea how the hell they can live that way. Do you wonder how the young people can afford to pay so much for these houses? We're talking the $800,000 to $1.5 mil range and they want to be able to eat out, shop and entertain! One more thing that gets me. Are they all coached to say (about the deck or balcony). "I can see myself out here having my morning coffee." Out of all the shows I've watched, I think there were only about 5 episodes where nobody said it. Who says "morning coffee"? It's coffee or cup of coffee, at least where I'm from.
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Yes, all that is HGTV typical. Also the vast majority of homebuyers want a house where they can "entertain."
I saw a show recently where their own children were thrown under the bus, so they can have a guest room.
Also, in many shows the purchase is centered on what's good for the dog [or cat, but usually it's a dog.]
 
Also....are these people paid to be on these shows (because that's what it is...show) and to say what they say? What REALLY drives me up the wall is when, at the end of the show, they're "discussing" the 3 houses and they're saying all the negative things about each house and then they choose the house with the most things they hate! I don't know why we even watch. We need to get a life...haha.

Yes...we've wondered how these "kids" can afford a million dollar house just starting out. Are these people even real??? Are they actors??
 
Colleen said:
Also....are these people paid to be on these shows (because that's what it is...show) and to say what they say? What REALLY drives me up the wall is when, at the end of the show, they're "discussing" the 3 houses and they're saying all the negative things about each house and then they choose the house with the most things they hate! I don't know why we even watch. We need to get a life...haha.

Yes...we've wondered how these "kids" can afford a million dollar house just starting out. Are these people even real??? Are they actors??
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Those million dollar homes must be on either the east or west coast where real estate is over the top expensive.

I was able to retire early [comfortably with a paid off home] here in Dallas at age 55 and have yet to even see a million dollars [but my net worth is still increasing... so maybe before I die!]

Btw... I especially like "Love It or List It." HGTV tried to turn the show over to a younger realtor and designer but the younger people did not have the same great personality and dynamics as the older cast. So now the old cast is back with new shows.

.
 
Lara said:
Things you can do to cut your living expenses without lowering your standard of living:

1. Give your house to your children via an Irrevocable Trust. Then rent the house and live there. Have an estate attorney draft the documents and provisions.

2. Sell your home to your kids and live there...maybe pay rent, maybe not.

Gifting or selling your house to your children and then living there is the only option that will both maintain your lifestyle and reduce your costs according to Timothy Speises of the firm, EisnerAmper.

As long as your children are willing and able to pay for the property taxes, maintenance, repairs, and any remaining mortgage payments, your house costs will be low...maybe even non-existent.
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Wouldn’t it be simpler if I just have my son send me a couple of thousand dollars every month?? He can afford it.
 
Lara said:
...My Will has all my children in a Trust so it would be managed by the trustee...end of any disagreements as the trustee has the last word. But as far as one or two of them falling on hard times and not being able to afford their share of maintenance, and property tax, I can see the problem.
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Actually, no, the trustee does NOT necessarily have the last word. I saw this first-hand when I worked in a CFP's office. He had a client who was "second-generation", e.g.; his parents had been clients. We'll call him Jim. Jim also became one of our clients, but his sisters were not.

Jim had 2 sisters, both adults. He was financially stable, as was one of his sisters. The youngest sister, let's call her Bea, was not.

As usually happens, the father died first. House was the main asset in their RLT. Mother named Jim as co-trustee. Everybody was fine with him helping manage the house and mid-sized investment account (mostly the life insurance proceeds from father's death).

Bea had very little work experience before marrying; marriage was rocky then went bad. She finally divorced the low-lifer. No job, no alimony, no place to live. Makes perfect sense for her to move back to her parents' home, help aging Mom out, and everybody is fine with the idea. This goes on for about five years.

Then Mom dies. Trust says all 3 kids share equally. Not much money left, but house has zoomed in value. Even with original kitchen and bathrooms, it's easily worth $700K due to desirable location. Hot RE market, no need to do anything but superficially clean to sell it in a week's time, max.

The house essentially IS the trust. It's the only major financial asset. It MUST be disbursed equally to the 3 kids. That is the fiduciary duty of the trustee. Jim is legally liable to the heirs.

Unless you know how to carve up a house like a roast turkey but keep the value intact, this means the house must be sold. There's only one problem:

Bea refuses to sell. She has no money to buy her siblings out. She flat-out refuses to move.

Jim and sister #1 try to be reasonable. They are busy people; they have careers and families. Jim has a net worth of almost $4M but it is mostly in RE because he's a rancher; he lives almost 2 hours away from his parents' home. Like most people he has a limited cash flow – he lives comfortably, but not lavishly.

Bea continues to refuse to sell. "We grew up here, I can't bear it to be sold!" Meetings became more acrimonious. Jim is having to maintain the value of the estate because it can't be disbursed so the trust can wind up. Utilities and property taxes are beginning to eat away at the cash.

Bea hires a lawyer. More negotiations. Even the lawyer thinks Bea is being unreasonable. Finally they get Bea to agree to at least divide up the remaining cash. Then, she says, she will negotiate on the sale of the house.

The remaining cash was something like $157,859.21. Divided 3 ways, it doesn't come out evenly:

$52,619.73 in 3 equal portions, with 2 cents leftover.

Bea refused to accept the division. "It has to be split up exactly into thirds!"

Both Jim and sister #1 said they would give her the extra 2 cents. Just sign the papers, please! At this point it had been going on for almost a year.

Bea refused again and had the lawyer file suit against her brother for misuse of estate funds.

This means Jim has to hire a lawyer for the estate (more expenses!) to defend himself.

Jim was trying his best not to be the villain. He had appreciated her helping out with Mom but she was becoming more unreasonable, not less. He had held off filing eviction on his baby sister but at this point he is watching the value of the estate drop. The RE market has suddenly turned downwards. As a fiduciary he cannot no longer keep this as a "family matter."

Bea was evicted after six very nasty months. By now the RE market is definitely in retreat. Bea left a mess; the house had to be cleaned up, repaired, staged, and was finally sold for a much lesser price.

The estate had to bear all the legal and RE expenses, including yet another year's property tax payment.

(BTW, in case you're not aware, a trustee is NOT paid for their time, unless specified in the trust. Thus, Jim spent dozens of hours unpaid over the 18 months.)

End result:
-- $300+K in cash had dwindled to barely over $80K total, to be divided.
-- Instead of clearing $660K, profit from the house fell to $485K.

....and Bea still had yet to pay her legal fees!

Needless to say, the breach is permanent. Neither Jim nor his sister has ever spoken to Bea again. Neither their parents nor they had ever imagined such a thing happening.
 
C'est Moi said:
It was my understanding that a home is exempt from Medicaid's "asset limit" and Medicaid does not require it to be sold to pay for long-term care.
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Apparently this is only correct under very specific instances, having to do with original ownership and residency of such.

Medicaid is a state-directed program (states must match in equal amount the Federal government's grant) so state laws vary greatly. It is critical you know what your state laws are, and remain updated on any changes.

Here is a very thorough article on exempt and non-exempt rules. This applies only to New York State, but it gives a good idea of how Medicaid defines its guidelines:

https://www.cutner.com/medicaid-ass...t-medicaid-trick-question-can-cost-thousands/
 
Lethe200 said:
Actually, no, the trustee does NOT necessarily have the last word. I saw this first-hand when I worked in a CFP's office. He had a client who was "second-generation", e.g.; his parents had been clients. We'll call him Jim. Jim also became one of our clients, but his sisters were not.

Jim had 2 sisters, both adults. He was financially stable, as was one of his sisters. The youngest sister, let's call her Bea, was not.

As usually happens, the father died first. House was the main asset in their RLT. Mother named Jim as co-trustee. Everybody was fine with him helping manage the house and mid-sized investment account (mostly the life insurance proceeds from father's death).

Bea had very little work experience before marrying; marriage was rocky then went bad. She finally divorced the low-lifer. No job, no alimony, no place to live. Makes perfect sense for her to move back to her parents' home, help aging Mom out, and everybody is fine with the idea. This goes on for about five years.

Then Mom dies. Trust says all 3 kids share equally. Not much money left, but house has zoomed in value. Even with original kitchen and bathrooms, it's easily worth $700K due to desirable location. Hot RE market, no need to do anything but superficially clean to sell it in a week's time, max.

The house essentially IS the trust. It's the only major financial asset. It MUST be disbursed equally to the 3 kids. That is the fiduciary duty of the trustee. Jim is legally liable to the heirs.

Unless you know how to carve up a house like a roast turkey but keep the value intact, this means the house must be sold. There's only one problem:

Bea refuses to sell. She has no money to buy her siblings out. She flat-out refuses to move.

Jim and sister #1 try to be reasonable. They are busy people; they have careers and families. Jim has a net worth of almost $4M but it is mostly in RE because he's a rancher; he lives almost 2 hours away from his parents' home. Like most people he has a limited cash flow – he lives comfortably, but not lavishly.

Bea continues to refuse to sell. "We grew up here, I can't bear it to be sold!" Meetings became more acrimonious. Jim is having to maintain the value of the estate because it can't be disbursed so the trust can wind up. Utilities and property taxes are beginning to eat away at the cash.

Bea hires a lawyer. More negotiations. Even the lawyer thinks Bea is being unreasonable. Finally they get Bea to agree to at least divide up the remaining cash. Then, she says, she will negotiate on the sale of the house.

The remaining cash was something like $157,859.21. Divided 3 ways, it doesn't come out evenly:

$52,619.73 in 3 equal portions, with 2 cents leftover.

Bea refused to accept the division. "It has to be split up exactly into thirds!"

Both Jim and sister #1 said they would give her the extra 2 cents. Just sign the papers, please! At this point it had been going on for almost a year.

Bea refused again and had the lawyer file suit against her brother for misuse of estate funds.

This means Jim has to hire a lawyer for the estate (more expenses!) to defend himself.

Jim was trying his best not to be the villain. He had appreciated her helping out with Mom but she was becoming more unreasonable, not less. He had held off filing eviction on his baby sister but at this point he is watching the value of the estate drop. The RE market has suddenly turned downwards. As a fiduciary he cannot no longer keep this as a "family matter."

Bea was evicted after six very nasty months. By now the RE market is definitely in retreat. Bea left a mess; the house had to be cleaned up, repaired, staged, and was finally sold for a much lesser price.

The estate had to bear all the legal and RE expenses, including yet another year's property tax payment.

(BTW, in case you're not aware, a trustee is NOT paid for their time, unless specified in the trust. Thus, Jim spent dozens of hours unpaid over the 18 months.)

End result:
-- $300+K in cash had dwindled to barely over $80K total, to be divided.
-- Instead of clearing $660K, profit from the house fell to $485K.

....and Bea still had yet to pay her legal fees!

Needless to say, the breach is permanent. Neither Jim nor his sister has ever spoken to Bea again. Neither their parents nor they had ever imagined such a thing happening.
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The above is a nightmare that benefited only the attorneys. Sibling "Bea" was a fool.

I was the trustee of my mother's estate. The trust documents, which were drawn by a trust attorney specified that I had 100% control over liquidating assets and distribution thereof. Any lawsuit brought against the trust or trustee (me) by one of my siblings would have triggered an automatic disinheritance of that sibling from the trust and his/her share would have been distributed equally among the remaining heirs.

We didn't have any disagreements over the estate, but the security having that clause in there made my job a whole lot easier.

p.s. My own trust has a similar clause.
 
KingsX said:
Yes, all that is HGTV typical. Also the vast majority of homebuyers want a house where they can "entertain."
I saw a show recently where their own children were thrown under the bus, so they can have a guest room.
Also, in many shows the purchase is centered on what's good for the dog [or cat, but usually it's a dog.]
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YESS!! (Re: purchasing for the benefit of their pets). LOL :D
 
Sure can. That is what I did. You just need to lower the expenses of the things you do. I moved from NYC where a 50 year old small two bedroom ranch house sold for $530,000. I bought a larger home with more property on a corner lot with a stucco wall around it for privacy. Cost was $209,000 in Florida. Found money. No City or State Taxes. Things are cheaper here. I pay $40 a month for lawn and tree maintenance. In NYC I paid over $200 a month for about six months of the year. Property taxes are 10% of what they used to be up north. Utilities are only $180 a month which includes garbage pickup. I was paying more than twice that up north. Although my retirement income is 40% lower than my past salary and no more bonuses which went into my bank account to save for retirement and is supplementing my Social Security checks.

I am fully retired and still drive the same model car, wear the same clothes, just got a brand new kitchen for the wife and in fact my life is better since I do not have to work and get to enjoy the things I own. My man toys. We also now go out to eat more often and free to travel whenever we want to. Life is better now an I am in a much nicer house, new car every 3 years and no business clothes to wear and other expenses associated with going to work. Then too as you get older medical issues can pop up and limit what you can do. I used to be away on business about 12 weeks of every year. Been to 21 countries and over 26 States. I have no plans to leave this State and no longer have a regular passport. I am enjoying having all this free time and being able to sleep as late as I want to. I even added to my collections since I got a retirement bonus from my company since I know where all the skeletons are buried. :)
 
Vinny said:
Sure can. That is what I did. You just need to lower the expenses of the things you do. I moved from NYC where a 50 year old small two bedroom ranch house sold for $530,000. I bought a larger home with more property on a corner lot with a stucco wall around it for privacy. Cost was $209,000 in Florida. Found money. No City or State Taxes. Things are cheaper here. I pay $40 a month for lawn and tree maintenance. In NYC I paid over $200 a month for about six months of the year. Property taxes are 10% of what they used to be up north. Utilities are only $180 a month which includes garbage pickup. I was paying more than twice that up north. Although my retirement income is 40% lower than my past salary and no more bonuses which went into my bank account to save for retirement and is supplementing my Social Security checks.

I am fully retired and still drive the same model car, wear the same clothes, just got a brand new kitchen for the wife and in fact my life is better since I do not have to work and get to enjoy the things I own. My man toys. We also now go out to eat more often and free to travel whenever we want to. Life is better now an I am in a much nicer house, new car every 3 years and no business clothes to wear and other expenses associated with going to work. Then too as you get older medical issues can pop up and limit what you can do. I used to be away on business about 12 weeks of every year. Been to 21 countries and over 26 States. I have no plans to leave this State and no longer have a regular passport. I am enjoying having all this free time and being able to sleep as late as I want to. I even added to my collections since I got a retirement bonus from my company since I know where all the skeletons are buried. :)
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Sounds like you'll be able to actually enjoy retirement now :) We thought about FL when we decided to move from PA 4 years ago but decided against the bugs and humidity. We'd already lived in CA and TX and didn't want to go back to either of those states so we decided on AZ. We live in a small town and wide open spaces with gorgeous mountain views 360 degrees. Low humidity was a deciding factor as my husband had a serious fall 6 years ago and arthritis is a killer for him when the cold and humidity would set in when we lived in PA. As far as living expenses, it's not the cheapest (TX and PA were the cheapest) but it's not bad because housing prices are very low in our area.
 
Colleen said:
Sounds like you'll be able to actually enjoy retirement now :) We thought about FL when we decided to move from PA 4 years ago but decided against the bugs and humidity. We'd already lived in CA and TX and didn't want to go back to either of those states so we decided on AZ. We live in a small town and wide open spaces with gorgeous mountain views 360 degrees. Low humidity was a deciding factor as my husband had a serious fall 6 years ago and arthritis is a killer for him when the cold and humidity would set in when we lived in PA. As far as living expenses, it's not the cheapest (TX and PA were the cheapest) but it's not bad because housing prices are very low in our area.
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Texas is a big place. Different areas of Texas have different climates.

I was born in far western Texas which has an arid climate much like New Mexico and Arizona.
 
Vinny said:
Sure can. That is what I did. You just need to lower the expenses of the things you do. I moved from NYC where a 50 year old small two bedroom ranch house sold for $530,000. I bought a larger home with more property on a corner lot with a stucco wall around it for privacy. Cost was $209,000 in Florida. Found money. No City or State Taxes. Things are cheaper here. I pay $40 a month for lawn and tree maintenance. In NYC I paid over $200 a month for about six months of the year. Property taxes are 10% of what they used to be up north. Utilities are only $180 a month which includes garbage pickup. I was paying more than twice that up north. Although my retirement income is 40% lower than my past salary and no more bonuses which went into my bank account to save for retirement and is supplementing my Social Security checks.

I am fully retired and still drive the same model car, wear the same clothes, just got a brand new kitchen for the wife and in fact my life is better since I do not have to work and get to enjoy the things I own. My man toys. We also now go out to eat more often and free to travel whenever we want to. Life is better now an I am in a much nicer house, new car every 3 years and no business clothes to wear and other expenses associated with going to work. Then too as you get older medical issues can pop up and limit what you can do. I used to be away on business about 12 weeks of every year. Been to 21 countries and over 26 States. I have no plans to leave this State and no longer have a regular passport. I am enjoying having all this free time and being able to sleep as late as I want to. I even added to my collections since I got a retirement bonus from my company since I know where all the skeletons are buried. :)
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Sweet! (the change from NYC to Fla).I see you're starting to enjoy your retirement now...that's nice. :)
 

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