We have records of the performance of the stock market dating back to 1870. During that time we have experienced four stock crashes. The market tops came in: (1) 1900; (2) 1929; (3) 1965; and (4) 2000. Stock returns were poor for the 20 years immediately following each of the first three crashes and so far for the first 12 years immediately following the fourth crash.

Crashes obviously hurt all investors (and, indeed, even non-investors — the losses suffered in crashes cause economic crises which dramatically diminish economic growth for the entire society in which they occur). But they don’t hurt all investors to the same degree or in the same way.

This column looks at how crashes affect investors at four stages of the investing life cycle in different ways. The four stages are:

(1) Young Investors (age 25 to age 45)

(2) Investors Approaching Retirement Age (age 45 to age 65)

(3) Investors in the First Decade of Retirement (age 65 to age 75)

(4)Investors Beyond the First Decade of Retirement (age 75 forward).

 Young Investors (Age 25 to Age 45)

The dollar hit delivered to these investors is minimal. In fact, looking only at the dollar hit, it can be argued that stock crashes benefit this group.

An investor close to retirement age might have $1 million in his portfolio. A price drop of 65 percent would cost him $650,000. That’s a devastating hit. It’s far better to take the hit at a time when you only have $100,000 in your portfolio. The $65,000 loss might seem like a big deal to the person with only $100,000 of life savings. But crashes only occur once ever 35 years or so. So getting the crash out of the way when you are 35 means not needing to worry about the next one until you are 70. The investor who experiences a crash early in his investing lifetime will see huge gains uninterrupted by crashes in the years of greatest wealth accumulation (the late 40s, 50s and early 60s).

There’s another side to the story. Crashes cause economic crises. Younger workers are far more in need of job opportunities than older, better established workers. Experience a crash in your 20s or 30s and you may never see the career growth you need to see to be able to retire at a reasonable age. It’s good to experience your stock crash when you are young if you have a good job before the crash hits. If the crash hits before you are established in your career, it could be that the hit you experience from not being able to obtain a good job will be far larger than the hit you experience as a result of a drop in your portfolio value.

For young investors who have established themselves in good careers before a crash hits, the crash can actually be a big plus. Stock valuations always go to one-half of fair value before the bear market comes to an end. When stocks are priced at one-half fair value, the most likely annualized 10-year return is 15 percent real. Young investors experience small dollar losses in a crash and are then positioned to experience huge gains in the years when they are earning enough to invest heavily in the market.

Investors Approaching Retirement Age (Age 45 to 65)

Since crashes only come once ever 35 years or so, those experiencing crashes in the years leading up to retirement enjoy a good number of years of compounding returns before the crash takes place. This gives them the opportunity to accumulate large amounts of wealth.

The problem is that investors who accumulate large amounts of wealth without suffering a crash often come to believe that they are immune to the market laws that insure that we will see crashes ever 35 years or so. Investors who enjoy big gains for decades often ramp up their spending on the presumption that there will never again be a crash. This hurts them in three ways.

One, they become accustomed to a living standard far beyond what they will be able to afford after the effect of the upcoming crash is taken into consideration. Two, they lose the ability to see gains on their portfolios once the crash hits (remember, stocks provide poor returns for 20 years following a bull market top). And, three, these investors take their hit at the worst possible time for doing so, when their portfolio values are nearly large enough to finance a middle-class retirement.

Investors in the First Ten Years of Retirement (Age 65 to Age 75)

This is the worst time to experience a crash. The historical data shows that retirees that survive ten years without being wiped out in a crash almost always work until the investor’s death. But even portfolios that appeared on the day the retirement began to be plenty large enough to support a long retirement can fail if there is a big hit in the first ten years of the retirement.

The problem is the compounding returns phenomenon. Investors who count only direct dollar losses greatly underestimate the price they pay for living through a crash. Each dollar lost is a dollar that would have been generating compounding returns for many years to come had the crash not taken place.

Non-retired investors can mitigate this effect by making new contributions to their portfolios, contributions likely to earn big returns because the market always dishes out truly mouth-watering returns in the years following the end of a bear market. But retirees are not able to make new contributions. They suffer all the downside of a crash and none of the upside.

Investors Who Have Been Retired More Than Ten Years (Age 65 and Up)

These investors suffer the smallest hit. It’s scary to see a huge drop in your portfolio value at an age when you are not able to return to the workforce. But the financial reality is that, if your retirement was adequately funded at the outset and you went 10 years without seeing a major hit, you have experienced enough gains that your plan should work even if you live a long life.

The one big downside to a crash for investors who have been retired for more than ten years is that it reduces the amount that they will be able to leave to heirs and to charities.

Barb’s comments; I would be remiss without giving a remedy to the chilling impact of large scale stock market investment declines. Asset allocation, tailored to your age and risk tolerance will soften the blow of market drops. If you are in retirement, you should have a large portion of your investment dollars in cash and fixed assets, so that when the stock portion of your portfolio falls, the impact will be cushioned by the stable value of cash investments.

How have the recent stock market delines impacted your investing strategies?

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It’s All About the Interest Rate

When shopping for a mortgage, it’s all about the interest rate. The interest rate, also called the annual percentage rate or APR, is essentially the cost you assume for paying back the mortgage over a period of time rather than all at once. Your credit score will heavily influence the mortgage rate you qualify for – lower credit score means, higher interest rate, and higher

BUY A HOME

monthly payment. When you realize how much money you can save over the mortgage life by improving your credit score, you’ll want to wait to purchase your home until you can qualify for a lower rate.

Best vs. Worst Interest Rate Examples

The difference between APRs with a good and bad credit score can be as much as 1.5%, possibly more depending on the lender. The difference is significant for monthly payments and total interest paid. For example, on a 30-year fixed rate $200,000 mortgage loan, a person with a 630 credit score qualify for a higher 5.19% interest rate. The monthly payment would be $1,097 and the borrower would pay a total of $194,915 in interest on the loan.

Now, consider a person with an excellent credit score of 770. This person would typically qualify for the lowest interest rate, which is around 3.6% these days. On a $200,000 mortgage, the monthly payment would be $909 and total interest paid over 30 years would be $127,385.

The bottom line, you’ll spend almost $100 more on your monthly mortgage payment if you have the lowest credit score. But the real shock is the $67,530 more you spend over the life of the mortgage. That’s enough money remodel the home, pay for a child or grandchild’s college, or put toward retirement.

The Difference Just 50 Points Makes

The first two examples are the extremes – the lowest and highest credit score/mortgage scenarios. If your credit score is at the lowest range, it might take several years to bring it all the way up to excellent. Raising your credit score just a little bit can still produce significant savings. For example, a borrower with a mediocre credit score, around 680, might get a 4% interest rate, pay $955 monthly, and spend a total of $143,739 in interest.

With just a 50-point increase in your credit score, you could shave $46 off your monthly mortgage payment and $51,176 off the total interest you pay over the life of the mortgage.

With higher mortgage amounts, the interest rate differences become more significant and saving money is more imperative. On a $250,000 mortgage, there’s a $234 difference in the monthly payment and a $84,413 different in the amount paid over the life of the mortgage.

The numbers in this scenarios were generated from my FICO.com’s Loan Savings Calculator. You can use the calculator yourself to see how much money you could save on a mortgage of a different amount.

Before shopping for a mortgage, check your credit score to see where you stand. If your credit score is in the low range, spend a few months repairing your credit and focusing on your credit score. The money savings will be well worth delaying your home purchase.

J.D. Roberts is a seasoned writer in personal finance, specializing in credit repair. You can find more of his articles at CreditRepair.org.

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What steps have you taken to improve your credit score?

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This guest post is written by Jason, from New SUV.org. I was especially interested in publishing this article as El Carino and I are starting our search for a replacement vehicle for our 1998 SUV. Every 10 to 15 years we consider buying a new car, whether we need one or not.

Buy a Car For the Holidays?

December is a great time to buy a new vehicle. And no vehicle is better to have in the winter than an SUV. While most people are more preoccupied with buying holiday gifts; car dealers and salespeople are anxious to clear models off their lots and boost their 2011 sales totals.

Here are the top 7 tips to save when buying new SUVs:

#1. Know Your Credit Score. Financing deals are only good if you qualify for them. If you are planning on financing a new vehicle, do all you can to raise your credit score. That way, you will have a better chance of qualifying for the best financing deals. (Barb’s tip-put as much down as you can possibly afford.)

NEW SUV

#2. Look at Financing and Rebate Deals. Many automakers are enticing buyers to purchase with great incentive packages. Compare deals and evaluate what they will mean to vehicle pricing. Saving several percentage points on a loan rate can add up to a lot of money over a five year loan period. (Barb’s tip-Why not try for a shorter loan period?)

#3. Consider Buying Online. While no one should buy a car without a test drive, more people are going online to buy vehicles. Websites such as truecar.com allow you to research car insurance prices and lock in the lowest rate at participating local dealers. One buyer reported paying $3,850 below invoice for his model via truecar. (Barb’s comment-I’ve had great luck getting bids online.)

#4. Know Invoice Pricing Ahead of Time. Dealers can put a dizzying array of price add-ons that can make it difficult to determine what are actually mark-ups. Don’t let the dealers solely dictate pricing. Bring invoice pricing information with you for SUV models you are interested in.

#5. Know Your Trade-In Value. If you are looking to do a trade-in, it can be a good idea to see what dealers are offering on it prior to shopping for a new vehicle. In high sales tax states, trade-in value is especially important as you can offset the value of the trade-in towards the purchase price of your new SUV. ( (Barb’s tip-Consider selling the car yourself, you’re likely to get a higher price for the vehicle.)

#6. Evaluate Your Vehicle Needs and Vehicle Quality. Buying the right vehicle can save you a lot of money in the long run. Some people buy a car only to realize a few years later it no longer fits their needs. Plan ahead and carefully review total vehicle ownership costs. Purchase price alone doesn’t tell the whole story. You want a vehicle that is reliable, practical, fuel-efficient, and a style you can live with. (Barb’s tip; Don’t forget to review the cost to insure the new vehicle.)

#7. Don’t Buy More than the SUV from the Dealer. Car dealer’s make a lot of money from add-ons. Stay away from buying “fabric protection”, “VIN etching”, “paint protection” and other dealer services. This is where dealers make a significant portion of their profits.

By following these tips, you will be on your way to saving on your new SUV purchase. Vehicles are one of the largest expenditures people have so it is important to plan and spend the time necessary to save on vehicle costs.

Any other recommendations to consider when buying a new vehicle?

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Information sourced from Genworth Financial

Folks today are presented with the best interest rate environment in over 50 years. That’s right, you can get a home loan for as little as 4%. Compare that with the late 1970′s when mortgage rates were upwards of 12%. With those historically low mortgage rates, shouldn’t everyone buy a home? Maybe…..

Or maybe not……There is another side to the purchasing decision; the home price. It doesn’t matter if the interest rate is 2%, if you have no down payment and can’t afford the monthly house note, then buying a home is a bad idea. A home purchase is only a good idea if you meet basic criteria.

What’s a potential home buyer to do?

Home Buyers Checklist

Consider buying a home if you meet these criteria:

Expect to live in the home for 5 or more years. We made the mistake of buying a home, and moving two years later. That was an expensive $25,000.00 lesson .

Saved a reasonable down payment. I recommend 20%, buy I understand that is no easy feat. The buyers of our home last Spring had an FHA loan with a very small down payment. Fortunately, they had steady and well paying jobs which could easily cover their mortgage payment.

BUY A SMALL HOME

Less than 28% total debt payments including the mortgage payment. Calculate by adding up all monthly debt payments and divide by your monthly gross (or net if possible) income.

Steady employment which is likely to continue.

An emergency fund of 3+ months of living expenses on top of the down payment.

Motivation and resources to fix the leaks, replace the worn out dishwasher, and keep the property well maintained. Some folks aren’t cut out for home ownership and would rather call the landlord when the toilet gets backed up.

The Takeaway

It’s only a good idea to buy a home if you are financially and emotionally ready to tackle all that goes along with being a homeowner. My grandparents always lived in apartments and on the bus lines. No home ownership and access to public transportation. In some ways, it makes life simpler.

Housing for many living on the coasts is simple financially out of reach. International mortgage trends are a bit different than those in the USA. In fact, in some countries, you must pay cash in order to purchase a home. In others, you may only lease the land for a limited period of time.

If you decide to take the plunge and buy, be smarter and safer with mortgage insurance. Make a detailed budget, including a replacement fund for those unexpected repairs, before deciding to purchase. Look thoroughly, negotiate hard, and make sure to have your future home inspected before you commit.

We just moved across country and bought a beautiful condominium (short sale) in an area which would have been out of our reach a few years ago. As with most of our prior homes, we purchased a home for an amount less than we could afford. And we hope to be here a long time.

Are you considering buying a home or condo next year?

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Guest post, by a friend of Barbara Friedberg Personal Finance

The holidays are a great time to spend with family and friends but they can also be really expensive. Buying toys, food, and clothing can be quite expensive. If you are not careful, you can go way over budget by spending too much during the holidays. One of the ways that you can avoid
overspending and keep your financial goals on track is by following the tips listed below.

 Create a Spending Limit

You should create a maximum target to spend on presents during the holiday season. This should include the total dollar amount that you can spend on yourself and others. Make sure to obey your spending limit and adhere it to no matter what. That way you can emerge from the holiday season spending a minimal amount of cash and with your credit cards untouched.

 Make a List of Your Financial Goals

Put together a list of your financial goals so that you can get a jump on your New Year goals. If your plan is to buy a home in 2012 then
start planning now. Barb’s comment; Start saving and planning years before the target purchase year. Use a home loan calculator to determine exactly how much money you need to start saving. Once you have answered the question of how much can I borrow, you can start planning for your goal. The same rules apply if you wish to purchase a car or need to start putting some cash away for a trip back to college.

Adopt Smart Financial Habits

Now is the time to dump your poor financial habits and to start adopting some new ones. You need to stop procrastinating and start building a smart financial future. This means relying less on credit for purchases and using cash more often. It also means increasing the amount of money that you have going into your savings accounts. Getting rid of poor spending habits can turn even the worst of savers into financially responsible individuals.

Track the Small Expenses

It is often the small expenses that destroy the best budgets and not the big ones. You are likely already tracking your monthly car note and insurance payments but you are probably not keeping track of small purchases like food. Small purchases like buying lunch or picking up snacks can add up to hundreds of dollars over the course of a month. You should keep an eye on these expenses and seek to rein them in. You just might discover some extra money in your budget by reducing the incidental expenses.

Barb’s Recommendation; Choose one or two expenses at a time and eradicate them.

How are you preparing financially for the holiday season?

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by Gary Foreman

Gary has one of the longest running personal finance blogs on the web, The Dollar Stretcher. He shares my interest in creating meaningful holidays.

Spending Less this Year Could Actually Mean a More Meaningful Holiday

Until recently Americans have increased their holiday spending every year. One record year after another. If you didn’t know better you’d think that we were running on a treadmill trying to buy holidayhappiness.

But the recession of the last few years has changed all that. Families struggling to make mortgage and credit card payments are cutting back on holiday purchases. And, they’re discovering something surprising. They’re actually having a more meaningful season when they spend less!

Hard to believe? Perhaps. But more and more people are reporting that a simpler holiday is actually more enjoyable. Let’s see if we can’t findout why that might be true and what changes you might want to considerfor your own holiday.

Begin by considering the years when money was plentiful. You might have had a budget, but if you overspent by a few dollars it was no big deal.

So if you couldn’t find the sweater you wanted for Uncle Albert you just chose the next closest thing. Often a little more expensive, but so what? Check Uncle off the list.

Same thing on party planning. Guest lists were easy. The more the merrier. Sure the party was so crowded and noisy that you didn’t really get to catch up with anyone. But that’s just the way that holiday parties are.

But the last couple of years you simply didn’t have the money to spend on the holidays. You had to keep to a budget. Spending extra wasn’t an option.

So what happened? You began by removing some names from your gift list. There were a number of people that you really didn’t want to buy for, but did because you figured they expected a gift. You talked to them and decided not to exchange gifts this year. You found that it was refreshing not to have to take valuable time buying their gift. Less time spent cruising virtual or brick and morter shopping malls.

What about the remaining people on your list? Unlike years past, you didn’t have as much money to spend on them. But you found that by thinking about what they’d like you could often find unique, creative gifts in unusual places. On eBay or in 2nd hand shops. The gifts related to their lifestyle or some experience that you shared with them.

How were these gifts received? Actually quite well. As an avid flyfisherman your uncle found the collection of old postcards featuring fishing scenes fascinating. Your Mom was all teary eyed when you gave her the framed caligraphy list of things that she taught you about life.

Upon reflection you realized that thinking about the person the gift was for tied you closer to them and made for more meaningful gifts.

You also found that you spend less time with holiday related activities. To avoid buying a closet full of party clothes, you dedided to turn down all but the most important gatherings. In their place you spent time with your family at a number of free community events. It was the first time in years that your family spent so much stress-free time together.

Looking back on it you found it to be one of the best holidays that your family has ever had. No stress about spending money that you didn’t have. No credit card hangover in January. And, you actually got to celebrate what really matters for the holidays: friends, family and faith.

Gary Foreman is a former financial planner and purchasing manager who publishes The Dollar Stretcher.com website and newsletters. They’ve been teaching people how to “live better…for less” since 1996. Check out these ideas for inexpensive teacher gifts.

What is your favorite holiday memory? Is it a gift, experience or something else?

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We just moved across the country, purchased a short sale condominium, and took out a new mortgage. Our credit is stellar, yet because the property we were buying was a short sale, and we wanted to close the loan before my husband began his new job, the mortgage company made it quite difficult to get the loan. After many trials and tribulations, we did get the loan, a 30 year fixed loan at an interest rate of 4.75%.

Historically, 4.75% percent is quite a low interest rate. In spite of published rates below 4.75%, I’m content with the rate we received and am equally pleased to be on the other side of the entire headache of getting financing for and purchasing a short sale property.

What to do to get the best interest rate available for your loan.

• Know your credit score.
• Pay your bills on time.
• Use some of your credit limit, but not all.
• Keep credit inquiries to a minimum. Frequent inquiries lower your score.
• Use an e mortgage calculator to compare rates.

Save as much as you can for your downpayment. A larger downpayment combined with a lower mortgage rate, will keep your housing costs affordable.

Have I missed any tips to get a low mortgage rate?

written on behalf of  e mortgage calculator

image credit; Rev Dan Catt

With more and more people tightening their belts, there are a myriad of online tools that can help you work out how to manage your finances.

Sites such as moneysupermarket.com are well known for finding the best rates and helping to make the most of your money, but a new breed of digital assistance has arrived.

Until recently, Android was considered a type of robot and Apple was simply something to keep the doctor away, but both words have now become household names for different reasons.

Apple is one of the best known brands with its iconic iPods having been swiftly joined by iPads and iPhones.

However, Apple no longer has the market to itself, as a competitor has sprung up offering just as many applications for mobile devices such as tablets and smartphones.

Android is the alternative operating system, which has been partnered by Google and allows users to downloads apps either via its own Android Market or from third party providers.

Both systems offer a wide range of apps that can help you work out a budget, manage your money and even calculate debt repayments.

Personal Budget Droid

One of the best personal finance tools for Android is the Personal Budget Droid, which allows you to track how much is being spent on each expense and even to allocate different budgets so you can see how much you have left for each one.

For those who are feeling snowed under by their debts and want to work out how to tackle them, the Debt Payoff Planner from Android may be worth a look.

The app can help users to calculate how much to pay off each debt, which one to focus on first and even how long it will take become debt-free.

For anyone looking to get more loans, it is also possible to search for not only personal loan providers, but also payday loan firms.

But anything Android does, Apple likes to match and its dedicated App Store within iTunes makes it very easy to search for whatever you want, either by name or browsing the categories.

Apple’s equivalent to the Budget Personal Droid is the Budget Me Free app – a password protected tool that enables users to track how much they are spending, record their purchases and monitor how they are performing against targets. It also possible to export the data as well as convert it into monthly charts and graphs.

One of the best debt management apps for Apple is UK – Debt Snowball Pro, which provides guidance to individuals with multiple debts. The app not only suggests the best way to approach your commitments, it also offers different approaches for those who prefer to see the number of creditors reduce rather than the total sum. One particularly motivating factor is the ability to track how much interest you have saved along the way.

Just like Android, there are a multitude of apps available for those looking to borrow money – UK Mortgage Calculators is a particularly useful tool for those considering a mortgage, offering 5 different calculators in just one app to help you find the best deal.

So while more conventional methods of budgeting and money management remain as useful as ever, it is handy to know that there is extra help available simply by a tap on your touchscreen.

Guest article by Briana of 20 and Engaged

If you’re an avid sports fan, or at least live with one, you are no stranger to the recent sports lockouts. The NFL has just begun its season after it was locked out for 135 days, and the NBA is suffering the same fate, threatening to cancel the entire season if the owners and players don’t come to a collective bargaining agreement. This has happened before to the NBA back in 1998, and fans weren’t happy about it. Let’s just say, pockets around the nation are affected by sports lockouts.

What is a Lockout?

A lockout is different from a strike, in the sense that the owners will not allow players to work. This is also known as a work stoppage. In a strike, the players would refuse to work.

This year, the NFL was locked out mainly due to revenue sharing between the owners and the players. Basically, the owners were saying they wanted more money for team upkeep and they were claiming to be losing money. The players wanted proof by having the owners show their records for the past 10 years, but the owners only showed 5 years worth of financial history. This extended the lockout for longer than it was originally anticipated.

The NBA’s main issue for their lockout this year is their salary cap, which is the limit to the total amount of money that NBA teams are allowed to pay their players. If a team goes over that cap by a substantial amount, they are required to pay a luxury tax, which is $1 to the NBA for every dollar you go over the cap.

What Happens During a Lockout?

Players are not allowed to interact with management of a team which includes the owners, the general managers, the coaches, the doctors and trainers, scouts or any other executive staff of their teams. This could be very frustrating for all parties involved. Imagine not being able to talk to your job’s executive team, but having your union speak for you.

No trade talks mean you’ll be clueless about whether or not you should be preparing your family for a move to a different city. In this economy, selling your house on the fly is a miracle, so players needed to have a good real estate agent on standby if they want their home sold or need to purchase a new home when the lockout is lifted.

Players don’t get paid which is probably the hugest financial disadvantage for those affected by the lockout. Of course, the players aren’t getting paid because they’re not playing any games. Hopefully they had an emergency fund saved up to handle things while they were out of work.

More than just the players lose money due to games not being played. Just think of all the people involved in a sporting event. You have the doctors, trainers, venue employees and the entire team’s staff not earning a dime. Everyone at this point is temporarily out of work, from the team’s water boy, to the team’s mascot, down to the ticket taker and concession worker at the stadium. Not to mention, television networks like Fox Sports and ESPN lose money for not airing these games.

More injuries occur during a lockout because you don’t have access to team doctors and trainers. Players like Indianapolis Colts quarterback Peyton Manning did not get to receive proper treatment during the regular off season, and had to schedule surgeries and appointments when the lockout was lifted, causing games to be missed.

While the NFL’s lockout was lifted just in time for the season to begin as scheduled, the NBA has a history of not being so lucky. In 1998, professional basketball experienced a 204 day lockout, causing the season to be shortened from 82 games per team to 50. 464 regular season games were missed. Think of how much money was lost combined by everyone involved.

Financial Lessons from the Lockouts

Lockouts are a serious burden for everyone involved. The NFL season is underway, but the future looks grim for the NBA. Here’s what I learned:

1. Have an emergency fund in the unfortunate event that you lose your income, even temporarily. A lot of NFL players voiced their concerns about how they were going to provide for their families if the lockout continued.
2. Have additional sources of income so that if your main source is diminished, you’ll still have money coming in. Some athletes like Kobe Bryant, LeBron James, and Kevin Durant are lucky enough to have endorsement deals that are worth even more than their contracts.
3. Prepare a retirement plan: 70% of NFL players are broke 3 years after they retire. This is because they have not planned out their retirement with their lifestyle. You have to save aggressively if you want to retire early.
4. Live a lifestyle you can afford: Sure, when you become a millionaire you’ll want to buy multiple houses and cars, and take care of your family and friends, but once that money is gone, your bills will remain the same.

I’m glad I’m not an athlete, as this has truly been a great example of the saying “more money, more problems”. I hope that each person affected by these lockouts has had a change of heart financially.

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Do you think the super wealthy have fewer money problems than the middle class?

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Guest article by Kim of Balance Junkie

As Kim from Balance Junkie and I each moved this summer, we decided to share our “lessons learned”. Although she moved 3 hours away, and I moved about 10 times that, the process is the same! Please check out my MOVING STINKS-AND I NEVER WANT TO DO IT AGAIN! post at her site after you’re done reading her story.

There are some things you learn best in calm, and some in storm.

~Willa Cather

Well I’ve been writing about our move to a new city ever since the idea came out of the blue about 7 months ago. I worried about taking on a new mortgage just as we had almost paid off the old one. I worried about leaving a home we loved and thought we would never leave. I worried about how our three sons would adjust to new schools, new friends, and a completely new environment.

It’s finally over. We’re here. We’re (mostly) settled. A lot of folks have asked how it went, so I thought I would write a little bit about some of the things I learned from the move.

5 Things I Learned from the Move

1. Sometimes It’s Better to Let the Professionals Handle It

When we looked at whether to move ourselves or hire movers, we found that it would cost at least $4000 to hire a moving company. We would do our own packing, but they would bring a huge truck, load it and unload it for us. If we decided to move ourselves, we would need to use two trucks since none of us is qualified to drive the largest truck. We found that we could move for about half the cost if we did it this way.

Further, we could bridge the two houses so that we could move some of our stuff in on the first move, get some painting done, and then move the rest in on the second move a week later. That’s the route we chose, and it was probably the single worst decision we made surrounding this move.

We accepted offers to help from relatives and hired a couple of our sons’ friends to help with the move. While it was great to have the extra bodies, none of us are professionals and it took forever to load the truck properly so that everything would fit. As it is, we barely fit everything on the two trucks in spite of my Dad’s excellent loading skills. We felt terrible for imposing on our family even though all of them were more than willing to lend a hand.

One of our sixteen year-old sons is still on crutches from his recent surgeries, so he wasn’t able to help. The boys’ friends were helpful, but again, lacked the experience to really save us much time. That brings me to the single best decision we made: We hired a couple of guys through a company we found on Kijiji.

These were professional movers, and we were able to hire them by the hour. They worked about 5 times faster than the rest of us and literally did all the heavy lifting. We only had them at our new destination for both moves, but we wish we had hired some similar professionals to help load the trucks from our original home. We could have saved ourselves a lot of time and aggravation – and the minimal cost would have been well worth it.

2. Get Rid of Unwanted Items Before You Move

I ended up going through some of our closets and getting rid of a lot of stuff after we had trekked it up the highway in trucks that were filled to capacity. Weeding out unwanted or unnecessary items ahead of time would have saved us the time and trouble it took to pack and unpack those things. It would probably have made loading the trucks a little easier too.

3. Moving is a Great Reason to Re-Organize

When you have to empty the contents of your home and relocate it, it presents a rare opportunity to have all of your stuff in front of you and make a call on what is really the best place to put it. Although I failed miserably at getting rid of superfluous items in advance, I was actually pretty good about getting most things organized the way we want them. I still have some work to do in my youngest son’s closet, but I did pretty well organizing the kitchen.

A lot of our helpers just put stuff anywhere there was space in the kitchen, so I went through every drawer and cupboard and organized things in a more thoughtful way. I even went through all of my recipes and got rid of some of the ones I know I’ll never use.

4. Trust Your Instincts

I had a feeling that moving twice and not allowing professionals to do the work might not be a great idea. I should have trusted that instinct, set aside the funds necessary to pay the moving company and made a single clean break rather than prolonging the experience. Maybe part of me didn’t want to let go of our original home and I felt better knowing that it was still ours for a week. Perhaps that’s also the the reason I was less organized than I normally would have been during the packing phase.

5. You Can’t Plan for Everything

As most of us who have lived more than a couple of decades learn – apparently over and over again – you can’t plan for every contingency. We thought that our dual move approach would work out if we planned it just right. But there were – as there always are – many details that we could not have foreseen no matter how diligently we planned.

One of the things I wondered and worried about most was how I would feel about our new home and city. Because we were in a competitive offer situation, we bought the house without knowing much about the area and hoped for the best. I worried that no house would ever feel like home the way our other house had.

In the end, all of my worries proved to be for nothing. We love our new city and neighbourhood. We’ve met some really great people already and we feel very much at home now that all of our stuff is here. Although I miss the relatives we left behind, I don’t miss our other home very much at all. I’m not sure whether it’s because I worked through so much of that in advance or whether it’s just as I suspected in a previous post on How We Sold Our House in 5 Days: Home is more than bricks and mortar. It’s quality time with people you love.

All in all, I learned a lot from the “stormy” aspects of the move, but I’ve only really been able to assimilate it all in the calm that has emerged since most of the boxes have been unpacked. We still have one more hurdle, and that is having our basement finished. We elected to get it done right away since my husband needs an office for work. So for the next 6 or 7 weeks he’s working in the dining room. And that brings me to one final lesson: This too shall pass.

Kim Petch is the writer behind Balance Junkie, where you can read about personal finance, economics and life balance. You can also follow @BalanceJunkie on Twitter.

What are your lessons learned and suggestions when moving?

image credit; enigmabadger