I was sitting around one day when I started wondering how much my property taxes cost me each day. I had absolutely no idea, although I knew that I pay over $4000 a year in property taxes. After a quick check, I found I’m actually paying $4450 in property taxes each year. Ugh. So, what does that work out to per day? $12.19. Double ugh.
Then I started wondering how much it costs me per day to be in my house. If it costs me $12.19 for taxes, how much does it cost me in interest and insurance costs? $51.00 per day. Geez. Maybe I should sell this place and go live in a seedy motel for $29.95 a night where they even clean your sheets and keep the place tidy. Or maybe not.
Then I thought, if it costs me $51 per day in taxes, interest and insurance, I wonder how much it costs when you add in expenses like power, water, sewer, and garbage? That brings the total to just over $60 per day. Yikes. $60 per day that I’ll never recoup. I think I just got some new motivation to pay off our house and live mortgage free. If we can get the house paid off, it would lower our daily cost to: $21.85. Now that’s a number I can live with.
So if I was able to get the costs down to $21.85 a month, (which I fully intend to do by the time we retire), that still equates to somewhere around $665 a month just to live in our existing house. It’s looking more and more like I don’t want to live here in retirement. If ever there was a case for downsizing, I think I just stumbled upon it.
We also own a smaller house out at the lake. Taxes on that are only about $1200 per year. Electricity would be FAR cheaper because it’s only about 1000 square feet and is much more energy efficient. I’d estimate the cost at about $60 per month averaged across the year. There is a nominal fee for water because we are on a community well. Currently it’s about $20 per month. There are no costs for sewer because we have a septic system. Garbage is around $20 per month. Wow. This is definitely making a strong case to downsize when we retire. Instead of $665 per month, we’d only be faced with about $200 per month. That’s a 70% savings by shrinking from a 2700 square foot house (which is frankly kind of absurd for three people) to a 1000 square foot house. Of course, the lower property taxes also means we get less government services but I think we could live with that.