Fiscal Fowl Alignment for the Potential Homesteader
- Five Tips to Get your Financial Ducks in a Row

continued from page 3

by Andrew Mueller

TIP #4 – GO TO WHERE THE RULES AND TAXES AIN’T

It’s no secret that different places have vastly different costs of living.   If your job situation will allow it, consider moving to a place where the cost of living is low, the taxes are low, and the regulation level is low.    Most often, at least in the US, that’s going to be a rural county away from the major population centers.    

Taxes, of one sort or another, make up a very sizable chunk of the average family’s expenses each year.   That makes them a prime target for savings.  Bigger cities need bigger taxes to pay for their fire department, police department, water and sewer departments, sanitation department, and another dozen or so other departments.   Those taxes will come from you in the form of higher rates on your state income tax, county real estate tax, personal property tax, local sales taxes and more.   Compare the rates for these various taxes when you are looking for a potential place to live, and try to choose an area with a relatively low total tax burden.  The savings can be significant.  

In addition to having big taxes, big cities (and the counties that contain big cities) also have a love affair with conformity.  Much of your life in those areas is regulated by their Building and Zoning codes to force you into doing things much like everybody else does.   If you want to build, maintain or repair any major project on your property – even just a fence for your dog - in many areas you’re going to need to talk with a few gub’ment officials first and ask them for their official okie dokie.   Getting that okie dokie can cost you.   Building Inspectors and Zoning Boards can add thousands and thousands of dollars to any project you may be considering for your property, if they let you do it at all.  Since any self-respecting homesteader is going to want to do things with their property, you’ll want to find an area that does not require building permits or zoning approvals.  It’ll save you money and it’ll save you frustration.     

TIP #5 – FIND OR BUILD A COST-AND-ENERGY EFFICIENT HOUSE

Housing is the largest single expense most of us will have in our entire lives.  That makes it the easiest place to save a lot of money.  You want a home that is energy efficient, functional, attractive, and most of all, cost efficient. 

To be energy and cost efficient, the first rule is that it should be just big enough to allow you to live comfortably.  I look at some of the 3,000 to 4,000 square foot homes going up today, with one young couple living in them.  What I see is a pair of folks who are vigorously shoveling dollar bills out of their windows.    

Smaller houses require fewer materials, fewer labor hours to build, fewer utility dollars to heat/cool, fewer dollars to insure, fewer dollars to maintain, a smaller mortgage and less interest to pay, and fewer hours of your time to clean and maintain.   So apply the KISS principle to your house. (If you are unfamiliar with the KISS principle, it stands for “Keep it Simple, Stupid.”)    

As far as size, you can live quite nicely in 1500 square feet for a couple, with maybe an additional 100 square feet per child.   Some folks could be very happy in even less space.   But to be sure, anything larger is a luxury.  I’m not opposed to a little luxury, but we’re trying to give you the tools to escape the rat race, remember?   Escape first.  Luxury later.  

If you will be buying a house, buy small, and buy in an area of low taxes and limited regulation.   With low taxes and no building or zoning barriers, it’s easy to add on if your family grows or you come into some more cash and want a touch of luxury.   If, on the other hand, you buy a house that is bigger than you need, you’re pretty much stuck with it until you sell it.  

Next, consider a house that is energy efficient.   If you are buying, you can add insulation yourself at fairly low cost.   Upgrading to more efficient appliances is fairly simple, too – just make sure the increased efficiency will offset the purchase and installation cost within a few years.    

If you are going to build, only the obscenely wealthy would do so without taking advantage of free energy enhancements like passive solar heating, protective landscaping, or earth sheltering.  

You’ll also want to educate yourself about things like thermal mass and the insulation values of different building materials as you decide what kind of house you want.    

 If you can find locally-sourced, low-cost building materials that have good insulation and thermal mass properties, and if you can utilize your own labor to build with them, that’s a recipe for a truly cost-and-energy efficient house.      

So there you have it.  Five tips that I hope will help you with getting your financial ducks in a row, and making your break from the rat race.   Much of what I’ve said is just plain common sense advice.  Too often we either get caught in up complex details, or we forget about our future financial health as we try to keep up with the Joneses.    

If you can get out of debt, and you can live simply, frugally and efficiently, even those of modest income can afford to escape the rat race and build themselves a homestead.   On a modest budget, you may not be able to buy 500 acres with a roaring mountain stream within a convenient drive from the nearest opera house.  Chances are pretty good, however, that you can afford a lovely 10 acres of Midwest woodland, and can build yourself a happy life outside of the cubicle.

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