In This Issue

Where’s Just Right?

Everyday Americans are in Goldilocks’ shoes, finding out what’s too big and what’s too small

October 6, 2008
By Scott Westcott

Rising energy costs, tumbling real estate values, fears of inflation and a flagging economy are driving us to reconsider the homes we buy, the cars we drive, the very lives we live—all in the search for “just right.”

Like Goldilocks, many of us have tried a few sizes to see what fits with our lifestyle. Current pressures have led some to downsize and go the minimalist route. And, to the other extreme, some have splurged and felt the pangs of buyer’s remorse. Today, the Holy Grail is the “just right” lifestyle where comfort intersects with affordability and responsibility.

A good start to finding balance is to take stock of three aspects of your life that ERIE helps you protect and enhance—your home, your vehicle, and some of your financial planning needs. So heat up some porridge, settle into a comfortable chair and explore ways some people have moved toward “just right.”

Your home

When Ciji Ware’s husband got a new job in San Francisco, they jammed most of the contents from their 2,500-square-foot home into storage units and moved into a small apartment.

“We quickly realized how much we loved having less stuff and not as many responsibilities of running a large home,” Ware says. When it came time to move again, she and her husband spent a week sorting through a lifetime of belongings and whittled it down to only what they truly needed and wanted. The experience was so life changing that Ware decided to write a book called Rightsizing Your Life: Simplifying Your Surroundings While Keeping What Matters Most (Springboard Press, 2007).

“It occurred to me that 78 million Baby Boomers are not going to need all the possessions they spent a lifetime accumulating, and there really wasn’t a guide to the process,” Ware says. “I wondered: do we really need three vacuum cleaners and seven potato peelers?”

Ware’s advice stretches beyond the Baby Boomer generation. She urges homeowners to become more aware of whether their home—and what’s in it—truly meets their ideal lifestyle needs. Ware suggests evaluating all of your belongings and asking whether each item is worth keeping based on asking the questions:

  • Is it beautiful?
  • Is it sentimental?
  • Is it useful now?
  • Is it valuable?

Ware says only keep items that meet at least two of the four criteria. Recycle, trash or sell the others.

She also says that sorting through belongings offers “liberation.” It frees homeowners to make more informed choices regarding whether their current home and lifestyle best meets their current needs. While many homeowners may not want or need to move, the exercise helps them “rightsize” their existing home to make it more livable.

Ware also recommends conducting an inventory on your property and belongings. The Insurance Information Institute provides free home inventory software that allows you to record and update a list of items in your home. Erie Insurance also offers a printable versionPDF document.

“A lot of people can end up overinsured or underinsured because they don’t really know what they own,” Ware says. “That’s one of the key benefits of rightsizing—you know exactly what you own and can properly insure it.”

Too big, too small

Ware and others emphasize that rightsizing doesn’t necessarily mean moving to a smaller home. Beth Shaw learned that the hard way. Lured by the prospect of a more “Zen-like life” and moving to a more desirable location, she sold her larger California home last year and moved into a condo. The result, she says, has been a disaster.

“I open up my closets and shoes fall on my head,” Shaw says. “It’s a nightmare. I suggest people conduct their own feasibility study before downsizing. Think about simple things like, ‘Will I have room to store summer clothes for the winter?’ It is not something you should do on impulse.”

Sally Herigstad resisted the downsize impulse, and is glad for it. When she and her husband found themselves empty-nesters a few years ago, they considered moving from their 2,500-square-foot home. “We asked ourselves how much house do we need now that the kids are gone—the answer was at least as much house as before!” says Herigstad, author of Help! I Can’t Pay My Bills: Surviving a Financial Crises (St. Martin’s Griffin, 2006).

Herigstad and her husband stayed put, but “rightsized” their home. They converted their son’s room into workout space and their daughter’s room for sewing and to store items for the grandchildren that will eventually arrive.

“I would caution people against selling a house and buying a smaller one simply as a cost-saving move,” Herigstad says.

“There’s no substitute for running the numbers. The selling and closing costs alone, including sales tax in many states, can eat up any savings from moving to a smaller house. Selling and moving generally pays off only if you move into something much less expensive, most likely in a different area.”

Your car

In hopes of getting better fuel economy, Brian Glickman figured he’d have to give up some of the creature comforts of his Volvo sedan. But, he soon found differently. Glickman, who works as manager of media relations for Autotrader.com, found a Honda Civic sedan with leather seats, sunroof and a built-in navigation system—all the creature comforts he wanted. And he ended up getting almost 40 miles per gallon on the highway, nearly twice as much as he was getting with his Volvo.

“Lots of people think if they get a more fuel-efficient car they’ll be lucky if they get air conditioning and power windows,” Glickman says. “The reality is if they downsize, often times they are not losing anything as far as features go.”

Many car buyers should think rightsize as opposed to simply downsize. With gas hovering around $4 per gallon, it’s tempting to drive right to the dealership to trade for a hybrid or a compact. Yet, before you trade in your gas guzzler, consider safety and all the costs involved.

The Insurance Institute for Highway Safety (IIHS) found that small cars have twice as many occupant deaths each year compared to large cars. In crashes involving smaller and larger vehicles, heavier cars push lighter ones backwards, decreasing the forces inside the heavier car and increasing them in the lighter vehicle.

While smaller cars generally start out at a safety disadvantage, paying close attention to safety ratings can help minimize your risk. The Web sites iihs.org and safercar.gov offer detailed crash test and rollover ratings for a wide range of class, make, model and year of both domestic and foreign vehicles.

The right time to buy

It’s also important to think about costs both at the gas pump and the dealership. High gas prices have many drivers lining up for hybrid cars with the promise of 40-plus mpg. Yet, a recent study by Consumer Reports found that it often doesn’t pay to downsize now if you’ve only owned your vehicle for three years.

The bottom line—the depreciation of your current car teamed with the additional expense of a hybrid vehicle—means that drivers may not end up ahead financially.

Instead of buying a new car, drivers can “rightsize” and save money by changing driving and commuting habits. Cost-conscious drivers who reduce the miles save in several ways.

“Driving less not only saves money at the pump, it may also cut auto insurance costs,” says Jeanne Salvatore of I.I.I. “Consumers who reduce their driving by taking public transportation or car pooling should contact their insurance company, since significantly reducing the number of miles driven each week could lower insurance costs.”

In addition to sticker prices, insurance companies rate car models based on factors including typical repair costs, overall safety record and popularity among thieves. Before purchasing a new vehicle, call your ERIE Agent to get a quote. He or she can help you think through some of the details of choosing a car and the insurance that’s right for your life. (Will you need comprehensive coverage or not?)

Your finances

When it comes to rightsizing, Julie Murphy Casserly says a top priority should be making sure your financial house is in order.

“The reality is that many of us have pigeonholed ourselves into a lifestyle in which we pretty much wake up every day to pay the bank,” says Casserly, president of JMC Wealth Management in Chicago and author of The Emotion Behind Money: Building Wealth From The Inside Out. “I don’t think that many people care for their finances in a way that will give them the flexibility to live the life they want to live.”

Casserly advocates an overall assessment of the affordability of your home and cars you drive, and a detailed review of your monthly expenditures. She recommends meeting with an ERIE Agent to discuss how life insurance and annuities can play a key role in creating and maintaining the lifestyle you want.

Specifically, life insurance can be a safety net that assures your family can maintain their lifestyle if something were to happen to you.

“Life insurance is all about shifting your risk,” Casserly says. “You’re partnering with an insurance company to help cover certain risks. I often recommend people identify their priorities and then build life insurance needs based on those priorities.”

Another tool to creating a lifestyle that can lead to a rightsized retirement is acquiring annuities. Brian Ashe, a former chairman of LIFE, the Life and Health Insurance Foundation for Education, says that once you have identified the “just right” lifestyle for you, annuities provide a guarantee of monthly income after you retire.

How to rightsize, right now

The first step in rightsizing is to become more aware of the life you’re living—and the life you want.

“The most important thing you can do is to open your eyes and really look at your surroundings and how you are living your life,” author Ware says. “The concept of downsizing is incredibly depressing to me, while rightsizing is inspiring and liberating. It requires thought and effort, but the rewards are worth it.”


Scott Westcott is an award-winning journalist and freelance writer, whose recent work has appeared in Parents, Inc., and Woman’s Day. He resides in Erie, Pa.

Dan Craig is a freelance illustrator living in St. Paul, Minn. His work has been seen on magazine covers such as Der Speigel and Stern, numerous book jackets for major publishing houses, and in advertising for Toyota, Nike, Nieman Marcus, ESPN and HBO.

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