Moving into an apartment with roommates is never a simple task. For starters, space is almost always hard to come by. Then comes the difficult task of keeping that limited space organized. It’s easy for an apartment to devolve into a cluttered mess if you aren’t intentional about keeping it in order.
To prevent this, here are some tips for how to keep your apartment organized while living with roommates. Whether you‘re renting a house in Houston or moving into an apartment in Seattle, these tips from ApartmentGuide and experts will help you and your roommates coexist and stay organized.
1. Utilize versatile furniture
“Don’t underestimate the power of furniture that does double duty,” says Melanie Summers, owner of I Speak Organized. “A coffee table that doubles as a storage ottoman is a game-changer for keeping board games or cozy throws out of sight but close at hand.
Or how about a bookshelf that transforms into a desk? It’s perfect for those days when you need to switch from relaxation mode to work mode in a snap. These clever pieces of furniture are not only practical for saving space but they also add a fun and creative touch to your apartment, making staying organized feel like a breeze.”
2. Organize shared expenses
Manage shared expenses such as rent, utilities, and groceries efficiently to avoid conflicts and financial strain. Consider using apps or platforms designed for splitting bills to track expenses and ensure that everyone pays their fair share on time.
3. Create a shared calendar
Keep track of everyone’s schedules by creating a shared calendar. Whether it’s a physical wall calendar or a digital one accessible to all roommates, noting important dates, events, and responsibilities ensures that everyone stays informed and can plan accordingly.
4. Divide chores fairly
Establish a system for dividing household chores that feels equitable to everyone. Whether you rotate tasks weekly, assign specific duties based on individual preferences or abilities, or use a chore chart, clear expectations help prevent resentment and ensure that responsibilities are evenly divided.
5. Designate personal spaces
While shared living spaces foster camaraderie, it’s essential to respect each other’s need for privacy and personal space. Designate specific areas or shelves for each roommate to store their personal belongings, minimizing clutter and confusion.
“I am a huge believer in cubby systems,” says Beth Blacker, founder of It’s Just Stuff, a Boulder, CO-based home organizer. “They are great for anyone whether living with others or not. But in houseshare situations, I think they are definitely the key to keeping certain things contained and hidden but still readily available for each housemate. Many of the bins that fit into the cubbies have slots to insert a label to identify the owner and what is actually in the bin.”
6. Implement a cleaning schedule
Maintain a clean and tidy living environment by implementing a regular cleaning schedule. Determine how often common areas such as the kitchen, living room, and bathroom should be cleaned, and establish guidelines for keeping them tidy. Rotating cleaning duties among roommates ensures that no one person does all the work.
7. Set boundaries and respect each other’s space
Set clear boundaries regarding noise levels, guests, and personal items. Respect each other’s need for quiet time, privacy, and personal possessions to create a harmonious living environment where everyone feels comfortable and valued.
8. Establish clear communication channels
Communication is the cornerstone of any successful roommate arrangement. Set up regular meetings or establish a group chat where everyone can discuss important issues, such as chores, bills, and house rules. Open and honest communication helps prevent misunderstandings and creates a sense of accountability among roommates.
“To stay organized with a roommate, schedule a regular time to communicate about household issues,” advises Dara Zycherman, owner of Less Equals More. “Address problems before they begin and clarify roles and responsibilities, like who cleans what and who takes out the trash.”
9. Utilize vertical space
Maximize your apartment’s storage potential by utilizing vertical space. Install shelves, hooks, or hanging organizers on walls to store items like coats, bags, and kitchen utensils. This not only frees up floor space but also keeps commonly used items easily accessible.
10. Utilize storage solutions
Maximize space and cut down on clutter with smart storage solutions. Invest in storage bins, shelves, and organizers to keep shared spaces neat and organized. Encourage roommates to label their belongings and maintain a clutter-free environment for peace of mind.
11. Create a cleaning schedule
Develop a rotating cleaning schedule that assigns specific tasks to each roommate on a weekly or monthly basis. This ensures that cleaning duties are evenly distributed and helps prevent conflicts over who’s responsible for what. Be flexible and willing to adjust the schedule as needed.
Living with roommates can be a rewarding experience when approached with patience, respect, and organization. By implementing these 11 tips, you can create a harmonious living environment where everyone feels valued, respected, and organized. Effective communication, clear expectations, and mutual respect are the keys to successful cohabitation with roommates.
For those who feel liberated by small apartment living but are having trouble strategically organizing in a way that makes your place feel tidy, this article is for you. Whether you just leased a Seattle apartment or are looking at apartments for rent in Naples, Florida, expert organizers offer their best insights to help you keep your belongings in order and readily accessible.
While the task may initially feel tricky, Barbara Metzel with Professional Organizing Plus says a small apartment requires “creativity and smart organization” influenced by a “minimalist approach.” Now, let’s get started.
1. Begin by decluttering
Initiate your organization journey by decluttering. Streamline possessions and keep only what is essential. This foundational step sets the stage for an efficient and visually pleasing living environment.
Founder of Selma Organizer, Mariselma Goncalves, shares how “a great way to achieve serenity, especially in a small apartment where every inch counts, is by organizing and decluttering.”
The act of decluttering, however, isn’t done once and then forgotten about until the stacks pile up. In her blog, Tacoma, Washington’s professional organizer and owner of Clear Spaces Organizing Co., Ashley Nariman, shares how “the most valuable thing you can do is to develop a regular habit of decluttering.” She recommends “adding a purge session to your calendar every 4-6 months to keep clutter in check.”
By decluttering and “reducing the number of items in a space,” Aaron Traub, owner and lead organizer of My Professional Organizer Dallas, shares that a space can be “more functional and serene.”
2. Utilize clear containers
Opt for transparent storage solutions to quickly identify contents. Clear containers provide a visual inventory and lend a sleek and uniform appearance to your storage areas, maintaining a sense of order and simplicity.
Professional organizer Bethany Van Dyke shares how clear containers can be utilized in spaces such as kitchens or bathrooms “to house perishable food or bathroom items” that were previously in bulky packaging that took up unnecessary space.
Mary Beth Bartlett and Megan McDowell with Rooms to Breathe recommend “transferring board games and puzzles into zippered mesh pouches and filing in a large open bin” to save space. Additionally, the duo suggests to those with craft stations “unboxing markers, crayons, glue sticks, and other art supplies and putting them into a divided turntable.”
3. Vertical space
Unlock valuable vertical real estate by installing shelves and organizers on walls. Embracing verticality optimizes space utilization, freeing up floor space and allowing a visually striking display of your belongings.
Creative consultant and designer for Organize Create Design, Tracy Broeckel, shares how “floating shelves and pegboard paired with hooks and baskets can free up valuable floor space.” With Half Full Organizing, Stacy Stevens adds that implementing these items can “offer function and double as décor.”
Sarah Kary, certified professional organizer with From Mess to Blessed, shares how command hooks can be versatile in what they are used for. She adds that they are “renter friendly” and great for “hats, jewelry, kitchen utensils, stringing lights, dog leash, and art and décor.”
When organizing vertically, Taylor Miller, founder of Orderly Interiors, recommends investing in “behind-the-door storage shelves to neatly house laundry supplies, tools, bathroom essentials, or pantry items.” Heather Cocozza, organizing and productivity consultant for Cocozza Organizing and Design, recommends renter-friendly products such as Elfa Back of the Door Solution or iDesign Affixx Adhesive Organizer Bin for back-of-door storage.
4. Fold clothes
Master the art of efficient clothing storage by adopting the KonMari folding method. Neatly folded clothes save space, reduce wrinkles, and create an appealing wardrobe. This technique proves particularly beneficial in confined closets.
Certified professional organizer Katie McAllister with Susquehanna Closet and Garage Design shares how “jeans, athletic clothing, sweaters, scrubs, and t-shirts all do very well folded.” She also adds how the ideal spacing between shelves is 8-10 inches. This allows you to “stack a few items without creating your own Leaning Tower of Pisa.”
5. Under-the-bed storage
Transform the underutilized space beneath your bed into a storage powerhouse. Invest in under-bed storage bins or drawers that can be readily accessible but offer an organized space to stow away underused items.
Deena McNichol, owner of One Thing at a Time Professional Organizing, shares how under-bed storage is great for items such as “shoes, linens, or sweaters.”
6. Integrate multifunctional furniture
Select furniture pieces with dual purposes to make the most of limited space. From ottomans with hidden storage to convertible sofa beds, multifunctional furniture adds versatility without sacrificing style, catering to both form and function in your compact abode.
Designer sales representative for Save Our Space, Cory Viereck, recommends that those limited in closet space add wardrobes that can fit their belongings.
Credit unions are among the few institutions where consumers can go to save on fees and interest rates for different banking services and loans. These not-for-profit cooperative financial institutions are owned by their members and return profits to them in the form of such savings. But a bipartisan bill first introduced in the U.S. Senate in 2022 could impact the ability of credit unions to provide those benefits, according to some opponents of the measure.
The Credit Card Competition Act would require financial institutions with more than $100 billion in assets to provide merchants with more choice when it comes to which payment network can process credit card purchases made in their stores. The bill’s supporters say introducing such options will help drive down costs for merchants and, in turn, for consumers.
Currently, when a consumer makes a purchase with a credit card, the merchant pays what’s known as an interchange fee to accept that payment and have it processed securely by the card’s payment network (typically Visa, Mastercard, American Express or Discover). That fee, set by the payment network the credit card runs on, is usually between 1% and 3% of the transaction — and many merchants have long complained that it’s too costly. The bill would give merchants the ability to choose a different network to process its transactions (a Visa card wouldn’t have to run on the Visa network, for example), and proponents of the bill believe that more choices will beget lower fees.
Most credit unions fall below the $100 billion asset requirement and wouldn’t be directly impacted by the proposed bill. But some fear the potential domino effect that this bill may have on these institutions’ ability to give back to their communities.
The feared ripple effects on credit unions
With assets of over $100 billion, there’s only one major credit union that would be directly impacted by the Credit Card Competition Act. Navy Federal Credit Union has 13 million members — many with ties to the military, including their qualifying relatives — and branches near military installations and overseas. The credit union declined to comment on the potential impact the bill would have on its community.
“It only impacts a single credit union,” says Doug Kantor, a member of the Merchants Payments Coalition executive committee and general counsel at the National Association of Convenience Stores. “All the rest are exempt from the bill.”
Still, while the rest of the nation’s credit unions would not be affected directly, concerns persist. For Mike Lee, president and CEO of KCT Credit Union in Illinois, there’s worry that the proposed legislation could have lasting indirect impact. Credit unions earn interchange fees when their cards are swiped, same as the big banks. The bill could drive interchange income down for credit unions if Mastercard and Visa have to eventually lower their costs to compete with another network.
“We just don’t have a lot of fat, so even something as small as interchange, taking that away from me is going to have an effect on the credit union,” Lee says. “I might not be able to be as cheap on loans as I was, I maybe can’t offer as good a CD. When you’re already working on low margins, the well is not endless.”
KCT Credit Union also shares its interchange revenue with the community like the school district’s foundation, which provides scholarships for kids and grants for teachers to fix up their classrooms or cover school supplies, according to Lee. “If they mess with this a lot, all of these partners, all of these school districts I’m sharing my interchange with, I don’t know if I can do that anymore,” he says.
On the opposite end, the measure’s sponsors argue that competition in the marketplace will benefit consumers. “Our legislation would rein in the big banks and the credit card industry, drive down costs for convenience stores, gas stations and other small businesses, and ultimately pass those savings down to consumers,” said bill sponsor U.S. Sen. Dick Durbin, D-Ill, in a news release.
But whether those savings are actually passed down to consumers by merchants is debatable. After all, there’s no guarantee or way to ensure that they do so.
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Will past predict future?
There’s some precedent for swipe-fee legislation. In 2010, Sen. Durbin sponsored legislation that succeeded in reducing swipe fees on debit card purchases, and its subsequent impact on consumers is arguable.
Multiple studies conducted since the 2010 Durbin amendment became law conclude that the cap imposed on debit card interchange fees did not significantly lower prices for consumers. A 2015 economic brief published by the Federal Reserve Bank of Richmond showed that more than 21% of merchants actually increased their prices after the rule went into effect.
By contrast, some supporters, like the Merchant Payments Coalition, have cited a study by Robert Shapiro, a Georgetown University economist, which claims that the Durbin amendment saved merchants an estimated $8.5 billion in 2012, the first full year that it was in effect. And $5.87 billion of those savings (69%) was passed on to consumers in the form of lower prices.
To be clear, the new credit card legislation wouldn’t impose a cap on swipe fees like the 2010 amendment did for debit cards, so its not an apples-to-apples comparison. But the broader argument, that swipe fee savings by merchants would lead to lower prices for consumers, applies to both bills.
Lower prices could have hidden effects, too
If the premise of the Credit Card Competition Act proves true — if more payment processing choices leads to lower swipe fees, and merchants pass those savings along to consumers in the form of lower prices — might hidden costs still turn up elsewhere?
Several studies suggest that Sen. Durbin’s 2010 amendment resulted in financial institutions raising checking account prices and increasing minimum balance requirements. The banks exempt from the cap also adjusted prices as a competitive response to those price changes, according to a 2017 study by the Federal Reserve. Credit unions were impacted in a similar manner, forced to reduce services to members as revenue declined, according to a 2023 report commissioned by the Credit Union National Association (now known as America’s Credit Unions) and the American Association of Credit Union Leagues. The number of credit unions has also shrunk since this legislation was implemented. Nearly a third or fewer credit unions exist today compared with the number that existed in 2011, according to that same report.
Still, some supporters of the Credit Card Competition Act claim that the Durbin amendment had no impact on the cost and accessibility of banking products.
“What happened with debit card fees didn’t cause free checking to increase, didn’t cause it to decrease,” Kantor says. “Free checking is determined based on the financial institutions wanting to compete for customer deposits, and that’s driven by a whole bunch of other things going on in the economy, like the interest rate environment and other stuff. It’s just a misdirection from some of the large financial institutions that would rather not have to compete for business.”
The future of the bill
The Credit Card Competition Act continues to be a topic of debate across different industries that could be potentially impacted by it if it becomes law. It’s unclear whether the Credit Card Competition Act will come to fruition, or what its exact outcome could ultimately be for consumers.
Sponsors made previous attempts to attach the Credit Card Competition Act as an amendment to the National Defense Authorization Act, but it didn’t make it into the final bill. Currently, they continue aggressively rallying support to bring it to the floor for a vote.
What you can do
Groups on both sides of the Credit Card Competition Act encourage consumers to contact their representatives in Congress:
The Electronic Payments Coalition opposes the legislation, predicting that it will decimate credit card rewards programs without leading to a meaningful decline in retail prices for consumers. It provides guidance for contacting lawmakers at the website Hands Off My Rewards.
The Merchants Payments Coalition supports the legislation, saying it will make fees paid by retailers more transparent and competitive, could lead to lower prices, and doesn’t have to affect credit card rewards programs. It explains its stance at the Merchants Payments Coalitionwebsite.
A previous version of this article misstated the Merchant Payments Coalition’s position on the Durbin amendment and Credit Card Competition Act. The article has been corrected.
Now that we’ve been working from home for a while, everyone has more or less figured out what works. But there are still a few basic pieces of Zoom etiquette that people need to master.
Whether you’re hosting a video call or attending one, here are some Zoom etiquette tips to keep you from being “that guy” on your calls.
1. Mind the background noise
Be mindful of the background noise on your end. Things you might have grown accustomed to and don’t notice are noisy and distracting for those on a Zoom call with you.
Think about appliances that are running, like the dishwasher, washing machine and dryer, and fans and HVAC units can make noticeable noise. Consider either turning them off or moving well away from them during your call.
And one of the most obvious, yet overlooked, pieces of advice is to close the door while on a call. If you’re working where other people live or work, a closed door is a respectful signal to not bother you and keep noises from outside the room from being heard.
2. Clean up your background
What’s going on behind you during calls? Can others see cars passing by the street through your front window or the sink full of dirty dishes in your kitchen? Your visible background can say a lot about you and leaves an impression on Zoom calls. Try to keep a neutral background when possible and keep it clean so you don’t show off your messes.
Zoom does offer virtual background options, but unless you’re desperate, try not to use it all the time. Virtual backgrounds are fun and quirky at times, but they can create distrust or seem improper if overused. It’s alright to use them in an emergency when you’ve got a couch full of laundry behind you, but if it’s not necessary, it’s best to let everyone see you in your work environment at home.
As a word of warning, it’s appropriate to show everyone where you’re working in your home, but do it with caution! Yes, your bed is comfortable, but do you really want people seeing your bedroom? Instead, try setting up your camera in such a way that it doesn’t look like you’re lounging in your bedroom, like positioning yourself so only a wall is visible.
3. Check the lighting
Especially when working in a small space, lighting is challenging. An overhead light can create harsh or awkward shadows on your face. Natural light always shows up best through your webcam, but if you don’t have natural light that adequately highlights your face, you might want to consider alternative options like a ring light.
4. Use a dedicated office space
It’s important to have a specific office area in your home in general, but it’s especially helpful for taking calls. It can help you minimize distractions and avoid potential mishaps.
If you’re always taking calls from the same spot, you’ll know what parts of your house show in the background, how to minimize noise and adjust lighting and keep messes and distracting items out of the way. Or, if you have a pet, consider having a bed next to your Zoom location, so they know there’s a place for them and won’t jump into your lap mid-call.
5. Dress to impress
When you’re at home and have your closet only steps away, it’s tempting to change into comfortable clothes for work. When on camera, it’s best to have slightly more professional attire. This doesn’t mean you need to wear a suit and tie or a dress, but it’s best to put on something other than your sweats and an old hoodie. Try setting timers a few minutes before calls so you know when to change.
And just because people are only seeing the top half of your body doesn’t mean you should skip the pants — we all know that some Zoomers are flying fast and loose with pants, which is a dangerous game to play. If for some reason you do need to stand up or move during your meeting, you don’t want everyone seeing your unmentionables in a professional environment.
6. Watch the chat
Zoom’s chat function is a great tool for sending comments while other people are speaking and for sharing links. Sometimes, these comments are important or someone is sharing a link to a document you need to view. Check the chat throughout your meeting so you aren’t completely lost and others don’t think you weren’t paying attention.
7. Mute yourself
Even if there’s no background noise where you’re working, mute yourself when you’re not speaking. Unexpected things happen, like a doorbell ringing or noise you’re unaware of.
8. Turn off your camera when appropriate
While it’s nice to show everyone your face, turning off your camera is sometimes appropriate. If you’re getting up from your desk to grab something from another room, turn off your video. Seeing someone get up and leave for a minute may cause others to wonder what’s going on, and it can distract from the actual meeting at hand.
Or, if you’re moving yourself during the call from one room to another, you should also turn off your video. Your coworkers don’t need to feel like they’re on a roller coaster or traveling through hyperspace while you’re walking through your home.
Finally, turn off the camera if you’re eating, even if it’s just a quick snack. It’s poor Zoom etiquette and, frankly, gross to others if you’re eating while on a call.
9. Be careful while screen sharing
We’ve all had someone inadvertently show a confidential or personal message in a Zoom meeting, whether it was via notifications or poor planning when sharing their screen.
If you’re showing your screen to others on a call, make sure the screen you share is free from messaging platforms or other irrelevant windows. It’s also smart to mute your notifications while screen sharing, too. If you have difficulty remembering to turn off your notifications, try installing something like Muzzle that will silence your notifications for you when you share a screen.
10. Look into the camera
Many of us are using more than one monitor and are on a zoom call while viewing other documents on different screens. Even if what you’re viewing on another screen is relevant to the meeting, it’s better to look into the camera so people know you’re actively present in the meeting and not distracted.
11. Test video, microphone beforehand
Do a quick test of your audio and video before your meeting starts. It only takes a minute or two and can help you avoid awkward moments of realizing you have a mess behind you or wasting time at the beginning of the call to figure out why the sound isn’t working.
12. Use reactions
Zoom has a few reactions you can use when you don’t want to unmute yourself or make too much noise. These are emojis that you can click that will show on your video window for a few seconds. It’s much easier when you have a large meeting to show you understand something by giving a visual “thumbs up,” rather than verbally saying “I got it” and everyone wondering who said what.
13. Try multiple windows
In your Zoom settings, you can set it to display on two windows. This is especially helpful for meetings where people are sharing a screen because you can see the gallery view for people’s faces, as well as a screen share. That means no more scrolling through everyone on the top or side of the screen during calls!
14. Ask for permission to record
One of the greatest benefits of using Zoom for meetings is that you can record entire meetings and refer back to them later or send them to people who couldn’t attend. But, before you hit the button to record, make sure you’ve asked those in the meeting if it’s OK. Chances are, everyone will be fine with it, but it’s still good Zoom etiquette to ask so that others are aware.
15. Beware of taking calls from your patio
When the weather is good, it’s nice to take calls from outside. When you’re working from your balcony or patio, be aware of your noise level as neighbors might have opened windows to let fresh air in and they can hear you. This is bothersome to the neighbors who are trying to work or take calls themselves, and it could give away information about your company that shouldn’t be shared.
You should also monitor the noise in your background. It’s relaxing to hear birds chirping or feel a breeze, but it’s annoying to everyone else on your Zoom call.
16. Take precautions with common areas
Whether you’re in a conference room, business center or other shared common space, take precautions and be considerate of those around you. That means practicing social distancing, wearing a mask and being as quiet as possible — including when using the printer and coffee machine. No one wants to be interrupted in their meeting by someone printing out a 100-page document nearby.
Practice good Zoom etiquette
Most of us have had something unexpected happen during a Zoom call — and that’s OK! The great part about this pandemic is that it has shown us we’re all human. Even the CEO of the big company is dealing with pets, unexpected doorbells or visits from their little ones while they’re working. Life happens.
That being said, it’s still a work environment and we want to avoid being too unprofessional. Be conscious of Zoom etiquette and you’ll (hopefully) avoid being the distraction during calls!
I have sold many houses as an agent, and investor over the last 20 years. I have learned a lot about what helps houses sell and what does not. I have also learned what to spend money on and what not to. If you plan to sell your house, and you want to get the most money you can, you need to make it look as appealing as possible without breaking your budget.
Table of Contents
How important is curb appeal?
First impressions matter but they may not matter as much as many people think. When we watch HGTV all we hear about is curb appeal. I think curb appeal is mentioned so much because it is an easy catchphrase to remember and it is easy to see the differences on TV. TV is not always reality.
When I sell houses I want the property to look good on the outside but I do not need to spend tens of thousands of dollars installing custom landscaping. if the yard is dead on a house we are flipping we won’t install sod and then sprinklers because we will never get that money back. Now if you live in the home and can nurse a yard back to health with little money definitely do that.
We will add mulch, trim or remove dead trees, repair fences, etc, but we usually aren’t adding fences or adding trees. If the house needs paint we will of course paint it, especially if there is peeling paint as that can stop a buyer from getting financing. The reason we don’t do a lot of yard work is that most buyers feel they can do that work themselves. It can be hard work but not complicated work.
Decluttering and staging a home
Most of the homes we sell are vacant so we do not need to declutter. However, many of you reading this may be living in the home and have your stuff, maybe a lot of stuff in that home. Homes look their best when there are very few personal items in the home and no mess. It might sound weird, but leaving pictures up distracts buyers. It distracts me. I see them and I think do I know them, have we met, how many kids do they have, when I should be looking at the house! This is for a seasoned investor! Take down all the personal photos and remove as much clutter as you can. Make sure the home is as clean as possible and smells good!
If the house is vacant we sometimes stage it and sometimes don’t. It depends on the size of the home, the market, the feel of the home, and many other factors. When we do stage, we hire a company to add furniture and a few decorations. The worst thing you can do is add one table and chair with a bottle of wine. If you are going to stage, do it right. If you don’t want to stage that is fine but don’t make it obvious you wanted to stage but got tired and quit.
What repairs should you make when selling?
I can write an entire article on repairs and have done that because a lot can be said. I also have videos that I will link to after this section because repairs are tricky. The two biggest questions to ask when thinking about what to repair and what not to are can the buyers get financing and does the house look good?
For FHA to finance a home, it needs to be in livable condition which means the roof is decent, the windows aren’t broken, the major systems work, there is no peeling paint, and there are no safety hazards. Some people may say well we will just sell to a buyer not using FHA. Except, most owner-occupied loans will use the same guidelines as FHA. If you want to sell to an investor you will most likely get much less money than selling to an owner-occupant. if you need help figuring out what repairs to make for financing talk to a local agent or check this out.
Once the house qualifies for financing you need to make sure it looks and feels good. Cosmetic repairs go a long way like paint and flooring. You do not need to go crazy spending $100k on kitchen and bath upgrades. Stick to the affordable repairs if your budget allows it and if the home is in decent shape you might not need to make any repairs.
Price the home right and be easy to work with
If you price your home too high, it doesn’t matter how good it looks or feels. Pricing is the most important part of selling a home and you need to get it right from the start. If you price too high and lower it over time, you will most likely get less than pricing it right the first time. Again, I would use an agent to help you figure out what to price it at based on the condition of the home.
It is also important to be easy to work with. If you need 48 hours for a showing, that will deter many buyers. Have the home ready to show at all times and be ready to get out of there or let it be shown if you are at work. You may want 2 weeks after closing to move out but that will deter many buyers as well. be very clear about what stays with the home and what you are taking as far as appliances or other items that may be attached to the property.
If you get an offer remember you are not fighting the buyers or trying to win, you are working with them to come up with a win/win scenario.
When should you sell the home?
Many people say you should always sell in the spring because that is when most buyers are looking. That is true but that is also when most sellers are selling as well. If you are ready to sell your home, I would not wait for the perfect time although I would avoid a few times of the year if possible. Fall is usually the slowest time of the year because kids are going back to school and everyone is super busy. The Holidays are also tough because people are distracted and busy. Most any other time of the year works and buyers are always looking.
Conclusion
Selling a house is not rocket science but many things that go into it. Getting your house prepared to sell can net you tens of thousands of dollars more than simply listing it and hoping. It is easier than ever to sell by owner now with online marketing tools and social media but I would always use an agent personally. Yes, I am an agent but even buying or selling out of state where I am not licensed I always use an agent. They can help you price the home right, and give you ideas on staging and repairs, they also handle the showings and will expose the property to more buyers.
The hope is always that you’ll communicate and work out any problems you have before it ever gets this far, but that doesn’t always happen. Sometimes relationships can become toxic by the end. And when that happens, it’s difficult for both parties involved. Here are the signs your roommate doesn’t like you.
1. Cutting off communication
This is one of the big signs your roommate doesn’t like you. When you two stop speaking, or even worse, when all communication comes in the form of a terse text message or a sticky note on the fridge, that’s good indication the relationship is either dead or dying.
2. What a mess
If you’re sharing a home, you need to share the responsibilities of maintaining that home. Sometimes it means maintaining the water heater. But it always means keeping your home neat and tidy. A messy desk is one thing (the sign of a genius, even!). And you can forgive a messy room. But not so much when that mess creeps out of your bedroom and into your shared space like the bathrooms, living room or worse, the kitchen. Keep your kitchens clean!
3. Who ate my creamy all-natural almond butter?
Is your roommate eating your food, deleting your shows from the DVR or even wearing your clothes without your permission? Talk it out before they delete all those reruns of “Say Yes To The Dress” you’ve been saving for a rainy Sunday.
4. The invisible roommate
If your roommate is never there, it could mean one of two things: Either they lead a busy and full life and aren’t home much or they’re not home much because they’re actively avoiding you.
5. They follow the trail
Can your roommate track your movements by the trail of chaos and mess you leave behind? Shoes by the door, clothes on the couch, dirty pots and pans on the stove and a messy bathroom all lead to one riled up roomie.
6. Feeling your inner Felix Unger
On the other side of the coin, if you’re a neat freak who disinfects the remote and follows people around with a dustpan while reminding them to use a coaster, you won’t win any popularity contests, either. Being neat is great. Being a neat freak isn’t.
7. Tummy time!
Do you hang out all day sitting naked on the couch? Do you work and sleep in your roommate’s bed? These behaviors are acceptable only if you’re a dog. Are you a dog? Bad roommate! Very bad roommate!
8. Is it the first already?
Pay your half of the rent on time. Every month. No exceptions. If you come up short, or if you’ll need help paying your half, tell your roommate early. Waiting ’til the last minute or even worse, flaking out altogether, is how you make a roommate an ex-roommate.
9. Do you smell that?
Can you remember the last time it was “your turn” to take out the trash? If you’re stomping on the trash trying to pack it down, odds are you’re not winning any popularity contests.
10. TMI
There’s confiding, and there’s chronic oversharing. Sure, as roommates, you’re expected to share some stuff, but not everything. Some details are better kept to yourself.
11. That looks fun…I guess
No one expects you to have all of the same interests. You may have some stuff in common. That’s part of the reason you’re living together. But if you’re putting down someone’s interests or insulting their favorite reality show, that’s just a jerk move.
12. Overnight guests
No one says you can’t have a partner spend the night, but if your significant other is over a lot (like A LOT), be discreet and respectful. Being kept awake all night by the headboard banging against your shared wall won’t win you any popularity contests.
13. Oh, did I wake you?
Just because you “don’t get tired until late” doesn’t mean anyone living in your home should have to stay awake. It’s fine if one of you is a night owl and the other is an early bird. But keeping the lights on and blasting the TV at 3 a.m. on a Wednesday isn’t cool.
14. Occupado!
Hogging the bathroom, using all the hot water, leaving your makeup all over the vanity or not cleaning out the sink after you shave isn’t only inconsiderate and gross. It’s also just bad hygiene. And if you use all the toilet paper, replace the dang roll. It’s not hard!
15. Your only habits are bad habits
If your roommate isn’t a smoker and complains the furniture and the carpet smells like your cigarettes, it’s a sign your roommate doesn’t like you. You need to take your ashtray outside or take your stuff to another house.
16. Vicious recycle
If your city or town collects recycling, you need to sort all your recyclables. Paper and plastic in one bin. Glass in another. If you think, “Eh, they’ll do it when they collect it,” when you bring everything out to the curb (you ARE bringing out the recycling, right?), you’re wrong. They won’t. And it’s not winning you any friends.
17. Molting and revolting
Personal hygiene is for the bathroom. Not the living room or the kitchen. So, when your hair gets all over the furniture and floors, no one thinks of it as a reminder of your presence. Also, no one wants to see you clipping your toenails on the coffee table. Take that mess to your room!
18. It’s not my fault!
And nothing ever is. If you’re not taking responsibility for your own actions, your roommate will want to take your keys back. Owning your actions is a part of adulthood, and hiding behind excuses and sob stories is what children do. The milk didn’t go bad because it was angry at you. It went bad because you left it on the kitchen table and it sat out all day.
19. I’m sorry you feel that way
You’re quick with a non-apology apology. When you finally realize you did something wrong, do you accept the consequences of your actions and try to make peace? Or, do you say what you think the other person wants to hear?
20. So funny I forgot to laugh
You think you’re hilarious, so why does every joke land with a silent thud? If every attempt at levity results in an indifferent eye roll, it might be time to take a step back.
21. Huh? You say something?
Maybe you don’t have a terrible roommate. Maybe they even try to include you in events and activities, inviting you to come along tubing down a lazy river or to an improv show. And maybe while you appreciate the gesture, it’s not really your scene. But instead of saying that, you ignore their invitations and sit on your couch staring at your phone. If you’re actively ignoring and not engaging, those offers of friendship will dry up.
22. Au naturale
The human body is a beautiful thing. But your roommate doesn’t want to see yours. Wear a towel or a robe when you’re coming out of the bathroom. And when there’s a roommate situation happening, pants are NEVER optional.
23. What’s that in your mouth? Drop it! Drop it!
Sometimes roommates come as a team with a pet. But when there’s an animal in the house, there should be rules and repercussions. If your dog got into your roommate’s bathroom and destroyed everything, you’re responsible. And if you don’t take responsibility, you’ll have to take your stuff and go.
24. You wouldn’t like me when I’m angry
You won’t get along with everyone you meet. And not all people are a good match. But if your roomie gets easily annoyed or angry, it’s a good sign your roommate doesn’t like you. Why live with someone who brings out the worst in you? Why bring out the worst in each other?
25. You’re just different people
Sometimes in life, you’re going to meet people you just don’t like and who don’t like you. Neither of you was offensive or rude or inconsiderate. Not everyone was meant to live together. And some relationships are better off being short term arrangements and ending peacefully.
How to handle roommate problems
If you see signs your roommate doesn’t like you, try to talk it out calmly and respectfully.
Roommates will bicker and annoy each other. It’s bound to happen in any dynamic. And no one is saying you have to be best friends. Most of us weren’t that lucky in the freshman dorms. But that doesn’t mean you can’t find some things to bond over…like a peaceful home, bad reality TV and not leaving dirty dishes in the sink overnight.
When it comes to home design, we’ve all decorated with a trend or two that we wish we could forget (anyone remember pistachio-colored kitchens?). But we’ve also discovered trends that have turned into classic finishes that are here to stay. (Looking at you, marble!) With that said, while trends come and go, it’s always fun to forecast what’s going to be hot in the new year. And as with the “never dress in a trend from head-to-toe” fashion rule, the same applies to home decor. It’s never wise to outfit an entire house in them, but sprinkle in a trend here and there for an updated look. From embracing bold hues to incorporating textured wallpapers, 2024 looks to be a colorful year. Four designers weigh in on what you’re sure to see inside beautiful homes around Dallas this year.
Trend: Working pantries
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More and more, new home builds and renovations are including a spot for a working pantry, which is a larger walk-in version with storage and prep space. “Adding countertops, outlets and space to prep in pantries bring an added layer of function to the home and can help achieve a mess-free kitchen space while entertaining,” says Hayden Dendy, designer for BRNS Design, a multidisciplinary architecture and design firm.
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Designer Kara Adam, owner of Kara Adam Interiors, is also urging her clients to consider adding a working pantry to their floor plans. Not only is it practical, but it’s another opportunity to have fun with design. “Pantries are no longer a closet with white shelves,” she says. “They are gorgeous and they’re functional. Design them with pretty countertops, tile and wallpaper, or paint them a fun color. They are truly treated as a room now, not just a closet. This will be budgeted into more and more of my clients’ projects.” She suggests storing appliances that take up space in the kitchen such as coffee makers, blenders and toasters. “They can also be plumbed with a sink or ice machine. Basically all of the things that are noisy or unattractive, so that your kitchen remains a pretty space,” she says.
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Trend: Saturated color
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“This year we are going to see homeowners being more adventurous with color,” says Danielle Frazier, co-owner and principal designer of interior design studio Twilly & Fig. “When you saw the trends go towards gray and neutrals and cooler tones, people lost that richness and connection to color. They are starting to feel that void and want to be more playful with color.” Within that, Frazier notes that spaces will continue to see monochromatic use of color, particularly with moody hues. She says she’s seeing an increase in purple spaces, as well. “We just did a living room in a grayish plum that is really rich. It’s a color you don’t hear a lot about now, but you’ll start to see it more,” she says. She suggests trying Benjamin Moore’s “Hazy Lilac” as a way to introduce the trending palette. Aside from the walls, Frazier also notes that homeowners are starting to ask for colorful pieces like rugs, sofas and wallpaper as well. “I think people are willing to take a risk with color on more investment pieces than they have in the past,” she says.
Adam agrees that the neutral all-white look is starting to fade. “In 2024, few people are going to ask for that,” she says. “People want a cozier environment rich in color. Even formal spaces are looking less formal because of the rich color. It draws you in and makes a space scream ‘come hang out in here,’” she says.
Trend: Mixing and matching genres
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As the neutral palette starts to fade, so does the matchy-matchy interior that looks more like a catalogue than a personalized lived-in space. “Our clients are craving an element in their design and in their homes that have a soulfulness to them,” Frazier says. “For instance, we’ve been designing a kitchen with custom handmade tiles on the backsplash. We’re finding that people are wanting to add depth, character and personality through handmade pieces and antiques.” She suggests shopping estate sales and local antique stores for hidden gems or planning a road trip to one of Round Top’s antique show weeks for one-of-a-kind finds.
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“We always encourage and push clients to embrace the unexpected,” adds Adam. “Mixing a contemporary piece with an antique will make an environment that is pleasing to the eye.”She also urges clients to purchase art, which personalizes a home even more. She suggest that her clients buy works that speaks to them, rather than what “matches” their interiors. “Your home is an expression of you,” she says. “Art is very subjective. And, it’s not just decoration anymore. It’s a statement.”
Trend: Bold bars and beverage centers
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“Bars are huge right now,” says Adam. “We have some homes with multiple bars. And much like how powder baths are the jewel box of the home, that’s how bars are going to be too. They will be extremely layered, rich in colors and accessories, and usually have unique countertops.” And thanks to the playful powder bath aesthetic that has been trending for some time, homeowners are craving more of that layered look throughout the home, which is where a bold bar comes in. “It used to be that we’d go into these beautiful, airy light homes and they’ve had this wild powder bath, but now you’re seeing that personality throughout the home,” she says.
Cheers to the new home bar: How to create a modern, multifunctional space
And on that note, Frazier is seeing an increase in beverage centers, which encompasses every drink throughout the day, from breakfast to cocktail hour. “In the past a beverage center was maybe just a coffee bar or a cocktail bar, but now people want them to be multipurposeful, a place where they can make their morning coffee or tea, make a smoothie bowl after a workout or pour a beverage after work.” Most of these areas include a beverage fridge or fridge drawers, a built-in pullout trash can, a wine fridge, a sink, and cabinets for blenders, coffee pots or tea kettles. “It depends on the person, of course, but they are designed for how they want it to function,” she says.
Trend: Cozy spaces
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Homes built in the last decade mostly feature open-concept floor plans, which usually include an open family room, kitchen and breakfast nook. But Adam is hoping to design cozier spaces in the next year. “No one wants to relax in their family room when they are sitting on the sofa and behind them is the kitchen,” she says. Dirty dishes, a pot of soup on the stove or clutter on the countertops does not create for a relaxing space. “Creating separation is good for your mental health,” she says. “You can step away from it and go back and clean it up later.” Plus, when a space is large and open, there is no breaking point for a designer to do something playful and fun on the walls or molding. “When it’s one huge space, it’s a lot harder to upholster or lacquer a wall,” she explains.
Her clients are also asking for game rooms. “We can’t do enough of them,” she says. “We are redoing spaces so that people can have a mahjong room. In our home we have a table built for mahjong, but when it’s not set up for that, we always have a puzzle out, too. Work on a puzzle for 20 minutes and it’s good for your brain and it slows things down. Then you can go back to running around or going to carpool,” she says.
Trend: Textured and printed wallpaper
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Wallpaper has been trending for some years now, and it’s still holding strong in 2024, especially selections that boast texture, bold patterns and fabric. “In 2023, we launched our first wallpaper collection with Ever Atelier, Ever X Yates, and it led us to experiment with wall coverings in new ways. For example, new construction ceilings are typically much taller nowadays, and implementing wallpaper can help weigh it down and feel more proportional,” says Bryan Yates, principal designer of Yates Desygn. “In addition, we are currently framing three panels of a de Gournay print to work as a 9-foot-by-9-foot piece of art and create a more significant moment in a client’s dining space rather than using traditional panels as a series.”
Adam notes that adding the right wallpaper to a space helps to evoke a mood, too. “People are wanting texture as opposed to a super flat, quiet space. For instance, when you’re having a dinner party in a dining room covered in cool silk wallpaper, it makes people want to stay. We want our clients to have dinner parties that go on all night,” she says.
According to the J.D. Power and Associates 2007 Primary Mortgage Origination Study released today, most homeowners have not been impacted negatively by the current mortgage crisis, and overall satisfaction has remained stable since 2006.
“While it’s true that borrowers with weaker credit and those seeking larger ‘jumbo’ loans experience longer approval times and requests for more documentation, satisfaction has remained steady among the 75 percent of mainstream borrowers with good credit applying for moderately sized loans,” said Tim Ryan, senior director of the mortgage practice at J.D. Power and Associates.
Wachovia was the highest ranked mortgage lender in terms of satisfaction, receiving a score of 827 out of a possible 1,000 points, particularly for its improvement within the closing process, while SunTrust came in a close second with 818, and Bank of America rounded out the top three with 760 points.
The study, based on responses from 4,378 consumers who originated new mortgages between September 2006 and August 2007, measures customer satisfaction with four key factors of the loan origination process, including application approval, interaction with the loan representative, closing, and problem resolution.
Interestingly, J.D. Power suggested working directly with a mortgage lender instead of using a mortgage broker or an online service, saying it would lead to a more positive experience with fewer problems.
“The percentage of borrowers working directly with their lender instead of through a third party has increased, which has helped maintain the stability of overall satisfaction since 2006,” said Ryan. “This has also contributed to the average borrower experiencing faster approval and closing times.”
It’s the latest in a series of blows against mortgage brokers who have received a good share of the blame for the current mortgage mess.
Here are the rankings of mortgage lenders in terms of satisfaction, based on a 1,000 point scale (Industry Average 750):
Wachovia – 827 SunTrust Mortgage – 818 Bank of America – 760 National City Mortgage – 759 CitiMortgage/Citibank – 753 Chase – 752 Wells Fargo – 749 Countrywide Home Loans – 745 GMAC Mortgage – 744 ABN AMRO Mortgage – 740 American Home Mortgage Corp. – 736 Washington Mutual – 733 First Franklin – 595
A growing number of older adults are in debt in retirement, according to the 2022 Survey of Consumer Finances from the Federal Reserve. Among people ages 65 to 74, the share with debt rose to 65% in 2022, up from 50% in 1989 (the first time this question was asked). For people 75 and over, 53% report holding debt in 2022 versus 21% in 1989. This is a big challenge, since people’s income in retirement is traditionally limited. But there are strategies for tackling your balance sheet later in life.
Take note: Not all debt is bad debt. “It’s not necessarily the worst thing to have,” says Jack Heintzelman, a certified financial planner in Boston. If it’s debt that earns you a tax deduction, he says, like a mortgage, it may be fine to hang onto it while you give your money elsewhere a chance to grow.
But if debt is straining your retirement budget or you’re paying a high interest rate, a pay-it-off plan is key. Here are some methods that can help.
Pick up side work
The traditional retirement model — work for 40 years and then quit forever — may not be the most appropriate approach anymore. Supplementing retirement savings and Social Security benefits with part-time earnings can make your money go further and help you pay off remaining debt.
For some people, consulting in their field is a natural step between full-time work and full-time play. Other people can monetize an interest or pick up hourly work a few days a week.
“We have a client who works in a music repair shop for part-time income,” says Colin Day, a CFP in St. Louis. “They get to explore their hobby while also getting some level of income.”
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Consider moving or downsizing
Your home is usually one of your biggest expenses, and if you live in a high-cost area, you might be paying high property taxes and maintenance costs, which eat into your ability to pay for other things.
Moving to a smaller home or to an area with a lower cost of living can free up room in your budget. You might also get better weather, to boot.
“We have a fair amount of clients who are moving from more northwestern states with a higher income tax and colder weather down to places like Florida,” says Crystal McKeon, a CFP in Houston, who notes that Florida has no state income tax and decidedly warmer weather.
Andrew Herzog, a CFP in Plano, Texas, recalls a client who’s considering moving to a smaller home that’s closer to his daughter, easier to maintain and potentially mortgage-free if he can sell his current house for a high enough price.
“Downsizing can absolutely work,” Herzog says. “It’s best when you do it for multiple reasons.”
Time your Social Security benefits
The Social Security equation — when to claim, when to wait — depends on your health, your marital status and your savings. But debt can also affect your plans.
Taking Social Security early might give you the income you need to get rid of your balances. “As long as I’m not blowing up my plan by drawing Social Security early, it could help sustain me by not having to draw down my investment assets,” Day says.
On the other hand, waiting to claim means you’ll have a higher Social Security check later — benefits increase by 8% per year after full retirement age until age 70. Depending on the type of debt, it may be better to wait until you can throw more money at it. Talk to a financial professional about the best option for you.
“I would do the calculations,” Herzog says. “That’s a pretty big asset for people when you’re older.”
Tap home equity — cautiously
If you have equity in your home, you might be able to get a home equity loan or line of credit to help you consolidate or pay down higher-interest debt. Take your time in considering this, however, since an inability to keep up with these payments puts your home at risk of foreclosure.
“You have much more to lose if you mess that up,” Herzog says.
Keep in mind, too, that the interest on a home equity line of credit is only deductible if you use it for home improvement-related expenses. And this is a better option for a one-time debt, not ongoing expenses.
“Those living expenses are just going to continue,” McKeon says. “Home equity loans should not be a first priority.”
This article was written by NerdWallet and was originally published by The Associated Press.
Let’s discuss the proper way to account for inflation in retirement and FIRE planning.
I lurk in some online personal finance forums, and what I see scares me. I see “the blind leading the blind” discussing how to account for inflation as part of your retirement or financial independence plan.
These mistakes can be gut-wrenching. If you double-count inflation, you’ll assume a worse-than-real future and mistakenly believe retirement is impossible. But if you improperly discount inflation, you’ll assume a better-than-real future and torpedo your retirement with false hopes.
We’re going to fix that today.
What’s the Problem in the First Place?
The problem is that it’s challenging to understand if/when/how to apply inflation. It’s entirely understandable. Inflation is a weird phenomenon and the math isn’t intuitive.
Should you inflate your current salary into the future? What about your current spending? What about investment returns? You’ve probably heard of the 4% Rule; but how does inflation affect its usage?
All great questions. We’ll answer them all today.
The True World vs. The Convenient World
I’ve heard intelligent people tackle this concept before. It’s tough. Lots of numbers are involved. There are mysterious rules about when to apply those numbers and when not to. My friends Cody Garrett and Brad Barrett expertly tackled this topic on a recent episode of ChooseFI. :
As I listened to Cody and Brad, I thought: a few visual aids and analogies might help here.
My preferred analogy is what I call “The True World” vs. “The Convenient World.”
“The True World” involves numbers as they actuallyexist in our society and economy.
“The Convenient World” involves shortcuts that financial experts frequently use.
I’ll explain both worlds below.
Good news: you can do math in either world and get correct answers for your life. Hooray! This is wonderful. It shows the power of smart mathematics.
Bad news: you cannot flip-flop between worlds. You must do all your math in “The True World” or do all your math in “The Convenient World.”
The problems I see every week arise when DIYers flip-flop between worlds. So I say again: you cannot flip-flop between worlds!
Let’s describe these worlds.
The True World
Let’s talk about The True World a.k.a. our actual society and economy.
Inflation: inflation exists in the True World, typically varying between 2% and 4% per year. We don’t know what future inflation will look like. But it’s reasonable to use a benchmark like 3% per year.
Stock returns: stock returns vary in the True World and can do so by significant amounts. Still, a pattern emerges when we zoom out to large time scales (20+ years). On average, a diversified stock portfolio has returned ~10% per year over long periods. It’s reasonable to use that 10% benchmark for the future. $100 this year turns into $110 next year.
Bond returns: bond returns also vary in the True World, though typically by smaller amounts than stocks. Over the past 100 years, intermediate-term, high-grade bonds have returned ~5% per year. It’s reasonable to use that 5% benchmark for the future. $100 this year turns into $105 next year.
In the three bullets above, I made an interesting assumption: that the future will closely resemble the past. You’re allowed to disagree with me and say, for example, that you want to assume inflation will be 4% ongoing and stock returns will be 8% ongoing. That’s fine.
The critical point is that all your numbers occur here in the True World. Inflation is above zero. Stocks and bond returns are measured using the actual amount of dollars. When we combine these factors, we conclude:
Your future income will be higher than your current one, increasing with inflation.
Your future raises will be greater than current, increasing with inflation
Your future spending will be higher than current, increasing with inflation.
Your future annual savings will be higher than current, increasing with inflation.
Your future nest egg will grow by some mix of true-world return percentages (assuming you build a diversified portfolio).
Keep those four components in mind: income, raises, savings & spending, and investment growth.
If you do all of your future planning using “True World” numbers, your analysis results will show reality as it is. That’s the goal.
The Convenient World
In the True World, as we’ve seen, it seems everything gets adjusted up by inflation. Lame! And also a bit tedious. Can’t we just do a mathematical trick to remove inflation from the equation entirely?
Yes. That’s exactly right. Some intelligent people wanted to make The True World more convenient for us. We’re here today (discussing a confusing financial planning topic) because of that desire for convenience.
…which, in my opinion, is a great idea! Unfortunately, those good intentions paved the road to our present confusing situation. Those intelligent people said,
“Three of our four main components (income, raises, spending & saving) are adjusted by annual inflation. To make the math easier, let’s remove inflation. No more adjustments! But to even out all facets of the equation, we must also decrease the investment growth by the inflation rate.”
The Convenient World contains no inflation! Here in the Convenient World, our four components are:
Your future income will equal your current income (assuming no merit-based raises).
There are no raises (at least, no “cost of living” or “COLA” raises)
Your future annual spending & saving will equal your current values.
Your investments will grow by a mix of true-world return percentages minus the annual inflation rate.
There’s no inflation in any of the four factors. While we’ve decreased our future spending needs, we also decrease the amount we save in the future and the rate at which our investments grow. Everything is a bit muted in The Convenient World.
But because we’ve discounted inflation in both positive ways (less future spending) and negative ways (less investment growth), you can do future planning using these “Convenient World” numbers and your results will show reality as it is.
Don’t Believe Me?
“But Jesse! How can the math work if we remove inflation in retirement and FIRE planning?! We’re ignoring a very real phenomenon!”
Trust me. Trust the math. Take a look at this simple spreadsheet.
The True World tab uses true world data. The Convenient World tab removes inflation entirely as I’ve described above.
Both tabs yield the same exact retirement savings results (Column I).
What About “The 4% Rule?”
The famous 4% rule throws an important question at us.
As my 4% rule explainer article details, the 4% rule builds inflation into its math. The creators of the 4% rule told us, “Hey future retiree – don’t you worry about inflation in retirement, we’ve already built it into our mathematical construct. All you need to worry about is hitting your 4% or 25x nest egg goal at your retirement date.”
What’s that sound like? What world washes inflation away? The Convenient World!
Now, the 4% Rule applies starting Day 1 of Retirement and extends until the day you meet Charlie Munger (RIP). That stretch of time is covered by the 4% rule (or whatever retirement rule/simulation you choose to utilize).
How should you get from today to Day 1 of Retirement? I recommend continuing to do all of your math in The Convenient World. Remove inflation from your numbers altogether.
Can you mix and match? While dangerous, the answer is technically yes!
To get from Today to Your Retirement Date, you can either:
Do all your math in The Convenient World, where both your future annual spending AND your future nest egg need will be muted values, but the ratio of those two will be 4% or 25x.
Do all your math in The True World, where both your future annual spending AND your future nest egg will reflect reality, and the ratio of those two will be 4% or 25x.
You can technically use True World math to get from Today to Your Retirement Date, and then let the 4% Rule (which is Convenient World math) take over from there.
But you CANNOT mix-and-match True World and Convenient World math when determining how to get from Today to Your Retirement Date.
In this example, both True and Convenient math get us to a place we can start using the 4% Rule.
But – Those Future Nest Egg Amounts Are Different?!
We’re sitting here in 2024. The True World tells us we’ll need $3.75M to retire in 2040. The Convenient World tells us we’ll need $1.875M. Those two numbers are vastly different…so which one is right?
The way to think about that is:
We’ll need $1.875M to retire as measured in 2024 dollars
We’ll need $3.75M to retire as measured in 2040 dollars
Either way, the most important takeaway from these types of planning analyses is to understand what we need to do right nowin 2024 to hit these future goals. Then we can revisit in 2025, 2026, etc.
Thankfully, both True and Convenient math will inform us precisely what we need to do here in 2024. Both methods would tell us, for example, “You need to save $30,000 in 2024 to stay on track for your retirement goal.”
What About “Real” vs. “Nominal” Returns
You might have heard of “real returns” and “nominal returns” before. I use those terms regularly here on The Best Interest, but I’ve intentionally excluded them so far in our discussion of inflation in retirement and FIRE planning.
The reason is that “real returns” confuses my analogy of “The True World.” Ugh.
Investment professionals use the term “nominal returns” to describe the actual dollar amounts that investments are increasing/decreasing by. If $100 turns into $110, the nominal return is 10%. In other words, nominal returns exist in The True World.
Investment pros use “real returns” to describe whether investments increase your purchasing power. In other words, have the investments outperformed inflation? If $100 turns into $110 but there was also 4% inflation, the real return is ~5.77%. “Real returns” exist in The Convenient World.
Yes, it’s confusing. You’ve been warned. Good luck.
Lessons and Takeaways
What have we learned?
Inflation in retirement and FIRE planning is a touchy topic. It’s not intuitive or easy. In fact, it requires great attention to detail.
You can use True World numbers and get all the answers you need.
You can use Convenient World math that excludes inflation, and you’ll also get the answers you need.
I recommend against mixing and matching. That said, if you’re very comfortable with the math, you can mix-and-match and end up fine.
You don’t want to mess this up. Misapplying inflation (a ~3% annual mistake) compounded over decades will lead you to a dark place.
Talk to an expert if you need to. CFP financial planners know how to handle this. Modern financial planning software takes care of the math for you.
Go get ’em!
PS: Here’s a straightforward financial independence and 4% rule calculator where you can input your own data.
PPS – you’ll notice my calculator does all its math in The Convenient World!
Thank you for reading! If you enjoyed this article, join 7500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.
-Jesse
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