Why own a circular saw when you can just borrow one?

Duh! But what if none of your neighbors, friends, coworkers or family members have a circular saw, or extension ladder, or cement mixing tray or whatever tools your project requires? Wouldn’t it be great if there were a place where you could check out tools like books at a library—maybe after first browsing for them online—for little or no cost? Thankfully, such a good and feasible idea has already been turned into reality in more than 40 towns and cities around the world. These places where you can borrow tools, and sometimes take classes, are called tool libraries.

In the Twin Cities there are at least three community tool libraries: in South Minneapolis, Northeast Minneapolis, and the Hamline-Midway neighborhood in St. Paul. But you can also find them across the U.S., and in Canada, northern Europe, Australia, New Zealand, and Fuzhou City, China. (Know of others? Please help update this map.)

Share Starter, a non-profit organization based in Seattle, Washington, published a set of guidelines to help groups interested in starting their own tool libraries. The guidelines cover critical topics such as understanding the local market, fundraising, staffing, and insurance and legal considerations.

If you’ve ever used a community tool library, how was the experience?

Financial documents—keep or toss?

Last week I taught a class on simplifying, and a common goal was clearing stacks of papers off the dining room table. Special angst was reserved for “financial documents,” which tend to stick around because they need review and/or filing. Or do they? It quickly became clear that none of us felt completely confident about what documents should be kept and which should be shredded.

Thanks to my friend Lisa for pointing out this short list from Real Simple magazine of what to save and for how long. I’ve added my own version below.  Continue reading

A different American dream

wildflowersIn the U.S., owning your own home is seen as a personal marker of success and security. Owning property—especially the land on which a building sits—is a big part of the “American dream” we inherited from Europeans and others who came to the U.S. to start a new life. And despite all the upheaval in American real estate markets and the exposure of deceitful lending practices by banks in the past 10 years, owning a home is still touted as a safe way to invest money.

More than a year ago, my husband and I started to question some assumptions we’d made about home ownership. Ultimately we decided that it made sense for our family of three to rent the condo where we live now rather than own and maintain a single family home. That’s not a choice that would work for every household in every housing market, but I do think that making intentional choices related to housing has a big impact on all of our efforts to simplify.

Here are some of the questions we asked ourselves a year ago when we began to imagine an American dream that didn’t include home ownership. 

  1. Do we want spaces for occasional use?
    Every room in our condo is used every single day. We no longer have a dedicated guest room or home office or dining room. Hosting more than six or seven adults for dinner causes polite guests to start using the word “cozy.” Do I occasionally visit other people’s homes and gape at the charming century-old woodwork or feel grateful that they can host a party with 20 or more adults? Yes. Do I want to clean and furnish and heat and otherwise maintain a space like that? No.
  2. Do we want to keep paying money to “make money”?
    When people talk about the benefits of owning versus renting they often cite equity. An easy definition of equity is the difference between what you could get for your house if you sold it today and how much you still owe the bank. In our case, we needed to continuously maintain our house plus make improvements so that we could enjoy living there and also build equity. Every year there were projects costing thousands of dollars, sometimes for very unglamorous or hidden things like a new sanitary sewer line. Whenever we could, we did house projects ourselves to keep the costs down, which meant we spent a considerable amount of our time doing what felt like work.When we sold our house—in a desirable neighborhood in a seller’s market—we calculated that the equity we’d built over 13 years was almost as much as what we’d spent on home improvements not including any of our time or labor. Huh.
  3. Where will we put stuff?
    We got rid of more stuff than we realized we owned when we moved from our house to our rental condo. Some things, like most of our tools and items related to exterior home maintenance, were no longer relevant. Many other things were just extra or mysteriously accumulated. We don’t miss any of the stuff we got rid of.
  4. What will we do without the mortgage interest tax deduction?
    The U.S. government provides an incentive to home ownership by allowing people to deduct the amount of interest they pay on a home mortgage from their federal taxable income.The U.S. government also provides an incentive to save for retirement by allowing people to contribute pre-tax income to a retirement account such as a 401(k), 403(b), or IRA. Without the mortgage interest deduction to lower our taxes, the choice to contribute more to our retirement accounts was easy: we could “lose” money each year to taxes, or we could put it into mutual funds to grow and pay our future retired selves.

    Kale and potatoes

  5. Will we miss not having a yard?
    I really enjoyed tending flower gardens and hearing and watching birds at our old house. Taking care of a yard was also good exercise and a nice way to be outside and chat with neighbors. Our compromise was finding a condo with a small patio and supplementing that green space with a plot in a community garden about a mile and a half away, where I’ve met some very nice fellow gardeners. I’m okay with trading the size, beauty, and convenience of our former yard for a lot less work and expense.
  6. Will we miss having a place that is truly ours?
    If we owned the condo where we live, we would have replaced the washer and dryer right away with high efficiency ones, and we would have seriously considered upgrading the refrigerator and dishwasher. We would have installed undercabinet lighting in the kitchen to make the space more usable. We probably would have painted all of the walls since they show wear and tear, and we might have started talking about a variety of other cosmetic projects. Even though we haven’t done any of those things (sigh of relief), we still consider the condo home. It’s where we go to relax and take care of ourselves and each other, and where we host friends and family. Our things are here too to mark this place as ours.

What are your thoughts about housing and simplifying? Are you considering a move to a smaller home, or renting versus owning?

* * *

March 9, 2015: we just did our taxes for 2014, our first full year without the mortgage interest tax deduction, and even though we significantly increased our pre-tax retirement contributions it was not enough to save us from having to write a check now for last year’s federal taxes. For 2015 we’ll make larger paycheck contributions to federal taxes so that we don’t have to pay a lump sum at the end of the year.

For those who argue that this particular tax issue is another reason to own rather than rent, I would clarify that the comparison is between being a mortgage holder/paying interest to a bank and not having debt (people who own their homes free and clear also miss the mortgage interest tax deduction).

Redirecting spending

My household has not, historically, operated within a budget. Debt aversion, automatic withdrawals for retirement savings, and a whole lot of good fortune have kept us out of trouble.

But one of my goals (which my husband shares) is to be more of a contributor, and one way to do that is to share some of our wealth. As a first step, I proposed that we give away 5% of our take home pay.

When I tried to make a budget so that we could be sure of meeting the 5% goal, I realized that neither one of us had a complete view of our finances. We had some conversations—brief ones, because spending money is fun and talking about it is tedious and tension-creating—and then I tallied 35 days worth of debit and credit card transactions to build a picture of our current spending.

Oh, my. I generally knew where the money was going because, like most women, I make the majority of spending decisions for our household. But it’s another thing to see monthly totals in discretionary spending categories and imagine shrinking those totals.

So rather than thinking of my next steps as “reducing spending,” I’m going to frame the changes as “redirecting spending,” which is something we have successfully done many times before (when our son was born, when we bought a new car, when we needed to pay for a major household repair).

And I propose this as my Spending/Environmental Footprint-Reduction Anthem:

Father John Misty performing ‘Now I’m Learning to Love the War’ at the Minnesota Public Radio studios

********

The blogger behind My Simpler Life offers guiding questions for people considering simplifying, including the following questions around finances:

Do you have too many accounts? Too much debt? No automatic savings plan? No spending plan? Are your bills scattered everywhere? Do you have a system for bill paying? What do you do with your receipts? Can you use software to help you simplify?

For day-to-day financial tracking and planning, a friend of mine likes Mint. You can link some or all of your financial accounts to build a complete, continuously updated picture of your spending and saving situation—but that means you have to give Mint access to those accounts. There’s also a new online bank called Simple that offers budget and spending tools. National Public Radio’s Marketplace Money recently outlined some of the concerns around putting your financial data in the cloud; you can read or listen to How secure is personal finance software.