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How to create a home office on a budget

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For about six months beginning in January, James Hulett’s garage became his home office. His company sent him home earlier than most workplaces in an effort to keep the coronavirus from spreading.

“I have a 3-year-old son who’s way into tools, so he would be [in the garage] finding tools to take them inside and take apart toys and stuff,” he says. “It was a circus.”

In the summer, he and his wife bought a home west of Salt Lake City that could accommodate an indoor workspace. All that was left was to turn it into an office.

Hulett, like employees at many companies in the U.S., expects to work from home at least through the end of the year. Some companies have announced plans to keep office doors closed well into 2021, and others have offered remote work as a permanent option for employees.

If you’re ready to start building your home office, here are tips for managing the costs, plus financing options for more extensive projects.

Consider your cash on hand

Hulett furnished his office using money he could spend within his weekly budget. His emergency fund is ironclad, he says, so dipping into it wasn’t an option.

Over a third (34%) of homeowners who have done home renovations since March 1 took the same approach, paying for their projects with cash they had on hand, according to a recent NerdWallet survey.

If you aren’t using savings designated for home improvement, it’s OK to use your emergency fund, says New York-based certified financial planner Jeff Wolniewicz. After all, he says, that fund is for unexpected expenses.

Also see: I’ve been working at home during the pandemic — do I qualify for home office tax deductions?

Just be mindful of how much you need in your emergency fund to feel secure and make a plan to replenish it right away.

“I think everybody has seen how important it is through COVID to maintain that,” he says. “An emergency fund is a huge peace-of-mind right now, so just have that plan to rebuild it.”

You can also put smaller home office purchases on a rewards credit card that gives cash back. Pay the full balance each month to keep interest charges from outweighing the rewards.

Focus your spending

One spending strategy is to invest in pieces that will make your work time more productive and enjoyable and to spend less where it won’t make as much of a difference.

A key piece that can create an effective office environment is a comfortable, supportive office chair, says interior designer Kerrie Kelly, who is based in Sacramento, California.

She suggests finding one that’s similar to what you have at work.

You can also get your money’s worth out of a fresh coat of paint. She says a new color can help create the feeling you want when you’re working.

“If that light blue changes your mood, go for it, or if you think that crisp white is going to keep you really organized, then go do that,” Kelly says.

Additionally, find a way to compartmentalize. Especially if your workspace doubles as a dining room, for example, invest in ways to hide your work — from yourself, if nobody else. She suggests something like a rolling storage cart.

Don’t miss: This hotel chain is letting you take advantage of your freedom to work anywhere

For his home office, Hulett wanted a formal, work-like atmosphere — he still puts on a button-down and gets ready for work — and for him, that meant an executive desk and credenza.

“I wanted there to be some kind of stepping out of normal home life into a work situation,” he says.

Shop secondhand

Hulett says his office cost $3,500 to furnish, and almost everything in it is secondhand.

His biggest tip is to use websites like eBay and Facebook Marketplace, where people are reselling office furniture in bulk at low prices.

Hulett says his desk was about $100 on Facebook. A similar desk by the same designer is valued at $3,000 by a vintage furniture store. Hulett drove to Phoenix to buy the matching credenza he saw on Instagram for about $800.

“It’s like a weird secondary economic phenomenon of COVID,” Hulett says. “I don’t think it’s ever been easier to get equipment that’s on par with what people are used to using at work.”

Get financing for bigger upgrades

Homeowners hired professionals for about 63% of home improvement projects between 2017 and 2019, according to the NerdWallet report. And professional help doesn’t always come cheap. If you’re thinking about adding a room or a more extensive workspace renovation, you have a few financing options.

A credit card with a 0% interest promotion could help you pay for your office updates interest-free, Wolniewicz says. The no-interest period on these cards is usually 12 to 18 months, so keep the interest rate in mind in case you can’t pay it off during that period.

You usually need good or excellent credit to qualify, Wolniewicz says, and though he sees some issuers making more zero-interest offers than earlier in the pandemic, they may still be hard to come by.

For building a home office, Wolniewicz recommends a home equity line of credit because of its flexibility. You can take only what you need from a HELOC and leave the rest, unlike a home-equity loan, which comes in a lump sum.

Be sure to read: How to make sure your home renovations are properly insured

If you can’t get your hands on a zero-interest credit card and you don’t want to tap your equity, consider a home improvement loan. You usually get the funds from these loans faster than an equity loan, and they can have annual percentage rates lower than a credit card.

Because they have higher rates than HELOCs and typically shorter repayment periods, your monthly payments could be higher, Wolniewicz says, but you’ll also clear your debt faster.

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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
VOW,
+0.96%

 
VLKAF,
+0.98%

salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


iStock

Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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