An honest and open communication about money can be crucial to a thriving relationship. Here are five financial tips for newlyweds.
Housing is one of the areas that new retirees often look into as they make the transition to this new phase of their lives. From evaluating your current home to moving to a new one, where you stay for the rest of your life can have a big impact on your retirement. While some retirees choose to purchase the dream house they couldn't buy during their younger years, others pride themselves on downsizing their homes. According to a study by Merrill Lynch and Age Wave, half of retirees swap their homes for a smaller one.
The idea of downsizing can cause some trepidation, as a move may mean leaving your decades-long comfort zone. But there are also advantages that may help you get over that resistance. Here are some of them:
A Smaller Home Means Less Maintenance
When you live in a larger home, you have more housework and other chores that need to be done, such as mowing lawns, trimming hedges and shoveling snow. While you're still physically independent, these tasks may not seem so daunting. However, what you can easily do in your 60s may not be so feasible when you reach your 80s. You may even need to hire some help just for your home's upkeep. By moving into a smaller home, like a condo, you can be spared from many of these maintenance chores and costs. That could lead to more free time for you so you can do the activities you really want to do.
Stop Paying for Extra Space
By this time, all your kids have probably moved out of your house and your large family home doesn't have the same purpose it once had. Even after you've paid off the mortgage, there are still expenses you have to take care of regularly, such as property taxes, home insurance, utilities and repairs. These are generally proportionate to the size of your property. On the other hand, when you choose to downsize, you can lower your monthly utility costs and expenditures. Although there is sentimental value that comes with living in your family home, maintaining those same expenses can dwindle your retirement savings faster than need be.
Boost Your Retirement Savings
Once you stop paying for unused space and cut down on unnecessary costs, you open the door for improved cash flow. Selling your old family house and the equity you've built can add significantly to your retirement savings. You can sell your family home and buy a smaller home or a condo with lower maintenance costs, then allot the remainder of your proceeds to your retirement nest.
See the World
One of the most common retirement leisure goals is traveling. If this is your plan, it could prove more expedient and cost efficient to keep a small house or condo. Whether you're spending a couple of weeks in another state with your grandkids or a month in Europe, paying for the upkeep of a large home while you're away can be costly. A smaller home can give you more flexibility.
Downsizing can be an exciting time for you and your spouse. The thrill of looking for a new home and making new friends can be the second wind you've been waiting for. It's like building your life again but this time with less pressure.
More than 30 million Americans are RVing these days. But as romantic as life on the road may appear, would-be buyers or renters of recreational vehicles need to do more than test-drive a potential home on wheels before joining the avid community of full- and part-time RVers.
As a would-be RVer, you should examine all aspects of RV living, including how to choose the right RV, how to negotiate with dealers, how to buy the right insurance, and, yes, even how to drive an RV before chasing such an idyllic life.
And what are the elements of the idyllic RV life? Let's start with a definition: An RV is a vehicle that combines transportation and temporary living quarters for travel, recreation and camping. Combine those aspects and you get what The Complete Idiot's Guide to RVing says the typical RVer enjoys: the ability to travel where and when they want; the chance to spend time with loved ones; a way to travel relatively inexpensively; the ability to avoid the hassles of commercial travel; and the opportunity for those who have special needs to travel in comfort.
Not Just Retirees
RVers, contrary to popular opinion, are not just retirees. They come from all walks of life. According to a study by the Recreational Vehicle Industry Association (RVIA), the typical RVer is 48 years old and married and has an annual household income of $62,000. RV owners are likely to own their homes and spend their disposable income on traveling—an average of 4,500 miles and 26 days annually. Would-be buyers and renters should note that many dealers, in light of high fuel costs, offer discounts, including gas cards and loyalty programs.
Nuts, Bolts ... and Wheels
Getting a handle on the various types of RVs is another necessary step. The two major types are motor homes (motorized) and towable (towed behind the family car, van or pickup). Of the motorized vehicles, Type A motor homes are generally the most luxurious and the largest, ranging from 26 to 45 feet. Type B motor homes, or van campers, are the smallest, between 17 and 19 feet. They may not be ideal for extended living, but can be great for camping trips. Type C motor homes are the middle ground between Type A and B, ranging from 22 to 35 feet. Finally, towable RVs include folding camping trailers, truck campers, conventional travel trailers and fifth-wheel travel trailers.
No matter which type you choose, your RV should have a place to sleep, a place to cook and a place to live. After that, choosing an RV that's right for you is a function of budget and preference. According to RVIA, prices for new towable RVs are typically $5,000–$22,000 for folding camping trailers, $6,000–$55,000 for truck campers, $8,000–$94,000 for conventional travel trailers, and $18,000–$160,000 for fifth-wheels. For new motor homes, the cost is generally $44,000–$200,000 for Type C, $60,000–$130,000 for Type B, and $60,000–$500,000 for Type A.
Doing your homework before purchasing an RV is essential. At the least, you should plan to attend an RV show or visit a dealer to comparison-shop; examine different models, vehicle types and floor plans; and learn about financing and insurance options. Renting an RV can be an ideal way to try before you buy.
At a minimum, you should examine how suitable the RV is for your needs. For example, will you use your RV for the occasional camping trip or as a place to live? When considering an RV, make sure to test the beds, showers and living spaces. Take the vehicle for a rigorous road test, listening for signs of engine trouble. If you're considering a used RV, make sure to inspect inside and out for signs of previous repairs, rusts and leaks. If you plan on buying a towable RV, check its weight. You don't want to find out after the fact that you have to buy a new car or truck to tow your new RV.
Other homework is required. Lemon laws, which guarantee consumers replacement motor vehicles or refunds after a certain number of problems or days in the shop, vary by state and often don't apply to RVs. Thus, RV owners, stuck awaiting repairs, often have little legal recourse. RVs tend to have more problems than other vehicles because they are made in much smaller quantities and without the same sophisticated manufacturing methods.
A Few Tips
Other tips to consider:
- Private sellers may offer lower prices but no warranties or returns. If you buy from a dealer, be sure to audition them with respect to price, knowledge of staff, service facilities and reputation.
- Check whether the dealer and manufacturer you plan to work with has any complaints against them with the Better Business Bureau or regulators.
- Make sure your dealer has a service department with RV-certified mechanics.
- If you are buying a used RV, get as much history as you can, especially repair records.
And no matter your final decision in the process, get out there and enjoy the open road!