Finding Your Safe Haven

Kankin Restaurant, Maria's Kankin
Kankin Restaurant on Isla Mujeres, Mexico

I once lived in a thatched-roof hut.  It was round and one quarter of it (like a pie slice) was walled off as the bathroom, complete with a porcelain bidet.

I also lived in a tri-level penthouse apartment overlooking Leblon Beach, in Rio de Janeiro.  And in a 16th-century house near the Van Ham castle in Steennokkerzeel, Belgium; it had a 9-foot tall, heavy wooden door and a lock with one 6-inch long key.

I lived in a small flat overlooking the lovely Parc Monceau in the 17th arrondissement in Paris.  That was after living in a rebuilt stone house across the street from the family chateau, in a Cognac-making village in southwestern France.

Later I lived in a gorgeous Brickell Avenue apartment overlooking the waters of Biscayne Bay in Miami, and then my dream house in a prized neighborhood of Older Miami.

What I learned from all this diversity is that where you live is simply where you choose to make your memories in that moment.  And I learned that you usually have to align where you live to your present reality.

The reality of the world (and U.S.) economy today may be one of those times when you have to re-align.

Although I often write about retirement, this has nothing to do with retirement.  Today it pertains to everyone.  (However, it is critical that you go through the mental exercise if you’re trying to figure out how your retirement will play out.)

If you actually did the exercise in my recent article A Quick and Dirty Budget, you may remember that your “Must Haves,” or fixed/contractual expenses, should total 50% or less of your net, after-tax income.

If you discovered that your numbers are very far from being in balance, this article is especially for you.

For your own peace of mind, revisit your basic housing costs.  Do so even though it goes against everything you grew to believe:   that you’d live in one house for decades, raise your family in it, pay off the mortgage and live out the rest of your days there.

We need to understand that the recent economic meltdown has wreaked havoc with our expectations as homeowners.  For the first time in generations, owning a home no longer guarantees building equity, ever-increasing value and security.  In too many cases, it actually means facing foreclosure or being upside down in your mortgage, where the mortgage balance is larger than what your house is worth today.

It means scaling down to something smaller, sharing with others, or going from homeowner to renter.  Or it means checking out those youthful dreams of living in a foreign country, where you could have a house, a maid, a gardener, sunshine, and health care … on just a little more than what you’ll collect on Social Security.

Whatever it means, revisiting your basic housing cost is the one single line item that has the greatest impact on your “Must Haves” figure (or whatever system you use to realistically analyze your spending).  And it might entail simply (but painfully) cutting your losses.

It’s what I found I had to do.  And in deciding where to move, here is the exercise I created for myself:

Step 1.  Take out a piece of paper.  Draw a line down the middle.  On the left column, write the title HAS TO HAVE.  On the right, write the title NICE TO HAVE.

Step 2.  Then, without giving any thought to where this home might be, what kind of home it is, or its price, in the HAS TO HAVE column list all of the things that you absolutely must have wherever you live.  Look around your home today and think of the things you could not live without.  (Random examples: 3 bedrooms/2 bathrooms, garden, 1-car garage, under 30 minutes from airport, pet-friendly, etc.)

Step 3.  Next, in the NICE TO HAVE column, go through a similar process and list all the things that would be nice to have, whether you have them where you live today or not, but that you could live without.  (Random examples: walking distance from stores, fenced-in-yard, near grandchildren, outdoor spa, boat dock, etc.)

With those two lists in hand, think about where you might be able to have those things in a setting (and financial framework) that allows you to breathe.

My greatest lesson, once I downsized, was that I had a far better quality of life living without financial pressure than I ever did in the hoity-toity, sought-after homes.  And that the peace of mind I enjoyed allowed me to rebuild my financial base so much faster.

The other lesson had to do with identifying where my initial resistance to change was coming from:  what would “they” think?   You know:  all the friends, some family, business colleagues.

But I got past that one pretty quickly.  In the end, what did I really care about what “they” thought?

After all, think about it.  Are “they” going to pay your mortgage?  Are “they” going to make sure you sleep soundly at night?  Are “they” going to be sure you can retire one day?

I didn’t think so.  So take care of yourself … first.

Do me a favor: click over to my Facebook page and let me know if you think changing where you live could have a positive impact on your quality of life.  I’d love to hear!


Bio:  Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. But yet she did! Since then, Sharon has interviewed countless women and done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

Today her mission is to show as many women as possible how to become financially free for the long term, through her “Over Fifty and Financially Free” coaching sessions.  She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve.

  • Sharon, I am in this process right now. This is a valuable lesson and your Quick and Dirty Budget worksheet is a must have…even teens should learn the 50% principles of spending.

    • I know you are, Claudia, and it’s such a healthy exercise for everyone.  It’s all too easy to live “unconscious” today, never revisiting earlier decisions.

  • Sharon, What great advice and also what a great way to take control of your life. I think people often feel out of control, but downsizing by choice offers to opportunity to regain what you may feel you have lost.

    • Michele, I often talk to people about free choice versus forced choice.  You recapture your power and control with the first one!  I know when I scaled back, it gave me a springboard to bounce back up … whereas I could have remained consumed by the weight of indecision.

  • AJ

    Nice post Sharon, great tips also.

  • Hi Sharon, love your points!
     Thanks for sharing this is a good advise for people – you are generous to share based on your own life experiences. Life is the best teacher 🙂

    • Solvita, life is the best teacher … when you let life be your best stage.  And you’re the director …

  • A thatched roof hut is on my list for someday… it might be when Susie and I start that frozen drink stand on the beach 😉

    Thanks for your perspective on what’s important and not worrying what “they” think.  People can think or say whatever they want – that’s more of a statement on them than you.  In the end, we make the choices that are best for us, and life shows us when our instincts were right.

    And such wisdom in your comment… “where you live is simply where you choose to make your memories in that moment.”

    • Amity, as I work with women who are facing changes, especially of houses, they will say to me, “But that’s where all our memories were made!”  And I say, “Yes, and the memories are not in the physical house, they’re in your head and heart.”

  • I am so excited Sharon. Finally a part of our budget that is within our budget. Back when I worked at the bank we were in a position to refinance the house when interest rates fell to the bottom. We locked in a 5.25% fixed rate and have used the extra savings to reduce our principal balance. After taking your exercise I can rest easier now knowing that our dream home, although it be humble, is still our dream home and not a nightmare home like it is for many. This anti-aging, fiery grandma of four intends on enjoying her home in the country for a long time due to turning back the clock.


    • And if anyone’s turned things around, it’s you, Carla.  Both in getting your finances in balance and turning back the clock on your health and weight.  Guess I’ll have to come to you for your “anti-aging” secret, huh?

  • Sharon, I love the way you offer “straight talk” on a subject than far too many feel is off limits. I would love to hear your thoughts on finances and retirement for the many grandparents (like me) who are finding themselves in a position of raising their grandchildren. When most at our age are looking into the next chapter in their lives we are looking for ways to finance braces! Many of our must haves are dictated by their needs. Thanks for always providing such valuable and sound advice!

    • Denny, as you know, with our extended lives these days (living into our 80s), it’s like having “two adulthoods.”  Most people spend the first filled with responsible, child-rearing activities … and the second with more freedom to reinvent themselves.  You’ve chosen to honor a relationship with your daughter and spend part of your second one back in the responsible child-rearing activities.  Because of the financial costs of doing so, it means you need to be that much more vigilant about maintaining the 50/30/20 ratios I talked about in my Quick and Dirty Budgeting article two weeks ago.   And bask in the satisfaction of knowing you’re sharing your solid parenting with yet another generation.

  • Sondra

    This is right on time Sharon. On the brink of the financial meltdown my husband and I purchased 10  acres of land on which to build our “dream home.” As we revisited those plans yesterday it was funny to see how the “dream,” though far from dead, has taken on a new look. But it’s a relief to see we’re both on the same page and neither of us holding on to unrealistic ideals about the dream or the future.

    • Sondra, if you’re both on the same page, you can deal with virtually anything.  The dream will be there, brighter than ever, if it is still meaningful to you when the pieces ARE in place.  But to hang onto it when they’re not is just a source of frustration.  Be sure, though, to find other more achievable dreams so you keep your “dream muscle” in shape!

  • Susan Kim

    This is so spot on.  And I preemptively followed the advice!  I moved back to Baltimore after a whirl in NYC (madly exciting and madly expensive).  I feel sooo much better back in Baltimore where everything is so much more reasonable.

    • Susan, as I said to you elsewhere, getting to that peaceful place is bliss, isn’t it?  😉

  • Sharon, your article would make such a nice chapter in your life story book! What an amazing, diverse life you have lived! 50% of net???? Wow… I definitely have some work to do! I have been peeling down and peeling down… am debt-free… but not building equity like I would like to… currently I have been living in a small camper but in a week I will be transitioning to a house where I can easily walk to everything needed, saving on car expenses. I found a ‘property management’ deal where I can manage property in exchange for free rent. Still, I’m not at the 50% point! But I’m definitely going to follow your advice… onward and upward 🙂

    • Susan, you’ve made so many changes.  One thing at a time!  Just getting debt-free is a huge accomplishment.  Will you be able to catch my call this Thursday evening?  It’s on Instant Teleseminar so, either using a local call-in number or computer … plus replay … I hope you’ll find it useful!

  • NM

    …your “Must Haves,” or fixed/contractual expenses, should total 50% or less of your net, after-tax income…After four lay-offs in ten years, and the current 25% cut in wages and benefits at my job, this means I should either find a way to live in LA on less than $850/month, or move to Idaho.  Giving up my life is not an option, and I will find a better solution.

    • NM, if you get a chance to see where that 50/30/20 proportion came from, in the article A Quick and Dirty Budget, you’ll see that it’s a target … one that’s not easy to achieve quickly.  It’s a gradual process, because of the nature of contractual obligations.  And with the changes you (and many others) have been forced into accepting … as you say, it’s virtually impossible to do until the after-tax income part of the equation improves.  (I know about the “blood out of stone” routine … been there.  And know it’s no fun.)

  • This was so encouraging Sharon! We are in the process of selling our home in this terrible market but you just reinforced again why we are doing it. Thank you! 🙂

    • I know those are tough decisions, Scarlett, because we tend to look at what we’re losing (based on 2008 value) … but have to look at what we’re gaining in peace of mind and financial responsibility. 

  • I just got off the phone with a friend and we were both talking about this very same issue! Confirmation this is a TOP priority for me right now! I love your wisdom, Sharon, conveyed with such a gentle and sweet spirit 🙂