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| The Basics | Get financially fit by changing your lifestyle
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Getting a grip on your finances may require drastic lifestyle changes, including a move. The good news is, if you work at it, you can scale back and be happier, too.
By Mary Rowland
I wonder how many of you have been caught in this dilemma. You've created a life that suits you, but it's not a financial fit. What do you do?
My advice to those who are toying with drastically changing their lifestyle to save money is this: Focus on your career, your relationships and your pastimes rather than on how much money you spend or save.
When I eavesdrop on conversations among people who have made big changes, what I hear is that many of them forgot to take off their rose-colored glasses. Perhaps they didn't like their life to begin with and were hoping it would magically improve.
Here are five questions to ask yourself:- Do you enjoy your livelihood? Be realistic. Think about where you are in your career. Do you like where you're headed? Can you do your job anywhere else? Don't focus on the boss. People have done drastic things just to get away from a bad boss. That's silly.
- Are you happy with your relationships? If you're single, you need sustenance from people around you. If you have a family, everybody gets to vote. (The parents get to decide, but the kids can vote.)
- Are you satisfied with where you live? If you're thinking about paring down, you probably live in the city. You won't think country life is idyllic the first time you lose electrical power for five days. Country life isn't a solution. It requires considerable resourcefulness and activity to stay happy. Does that appeal to you?
- Whats your baseline? What makes you happy? Eating at gourmet restaurants? Skiing? Going to the theater? Biking? Gardening? Reading? Surfing the Web? This is the clincher. I recommend experimenting.
One of the discoveries I made when we moved from New York City to a country home in the Hudson Valley was that Marc Eisenson, an advocate of paying off debt and living simply, lives just down the road. Meeting Marc and his partner, Nancy Castleman, caused me to rethink my definition of a pared-down lifestyle.
Marc and Nancy, who publish "The Pocket Change Investor," are way ahead of us. They live in a pleasant, book-filled home and get most of their food from an immense garden and a greenhouse Marc built. They don't use credit. And they once did an experiment to see how little they could live on -- it was almost nothing. Then Nancy insisted on a flush toilet. The point is that they love their lives. Not everyone would.
- Could you live in a less expensive home? Even if you don't want to relocate, your house may provide an opportunity to scale back. A married couple can take $500,000 in capital gains out of their house tax-free every two years no matter how old they are. Singles get a $250,000 tax-free gain. That means you could sell your home and buy a more modest house, pocketing the rest as a way to lower your expenses and improve your lifestyle.
Trading in your old lifestyle for a new one you love -- and that also costs less -- is enormously satisfying. But it's not something you can do over the weekend. If it intrigues you, start planning.
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MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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