This February we paid off our house.
(excuse me for one second..OHMYGOODNESS, WE PAID OFF OUR HOUSE!!!!! WE’RE DEBT FREEEEEEEEEEE!!!)
And I’m back.
Now to be totally and completely honest, I wasn’t even sure I should write this post. I don’t want to come off as braggy or in your face about it. I know that there are a lot of people out there struggling just to make their mortgage payments and it’s not my intent to make them feel crappy. If you are in that situation I want to encourage you. You CAN change your situation, it will just take a lot of hard work and a lot of sacrifice. It won’t be easy, but it will certainly be worth it.
Oh, and since I know this was probably one of the first things that popped into your mind…No, we didn’t win the lottery. We didn’t get any inheritances or anything like that. Our parents, grandparents, nor any family or friends ever gave us any money toward our house. And no, we don’t make a lot of money - below the national average. We just worked really hard, saved like crazy, and threw every extra penny at the mortgage.
I’m not going to go super in depth about how we did it because that would make for a disgustingly long post. I do very much enjoy budgeting and stretching a dollar, I could probably start another whole blog about it. What I am going to share with you are the top five things that I believe helped us most in paying off our house so quickly. This whole post can pretty much be summed up with something my Dad used to always tell me “It’s not about how much money you make, it’s about how many bills you have.” So true.
Before I start let me give you a quick synopsis of our whole money situation. These are all real numbers. I know to some this may seem a little personal to share, but it’s just money. It doesn’t define us or make us better or worse than anyone else. Plus real numbers just make this post so much jucier, am I right? We bought our house in August of 2008 for $133,500 and put $10K down. We got a 30 year mortgage at 5.25% and our payments were just over $900 a month (including taxes and insurance). The maturity date on the loan was supposed to be September of 2038 at which time we would have paid a total of $245,510.50 ($122,010.50 in interest!) for our home. Instead we paid it off 26.5 years early and only paid about $12,00 in interest (I’m guessing, I didn’t keep the best records on this). Holy savings, I know. Have you ever sat down a figured out exactly how much interest you’ll pay on your house? It’s insane.
So without further adieu, here are the top five ways to pay off your house early…
1. Buy well below your means – When we got approved for our home they said we could buy something for around 200K (I don’t remember the exact number). I don’t know what banks were thinking approving people for things that stretched them to their max. If you haven’t yet bought a house then DO NOT get excited if the bank gives you permission to spend a ton of money. Sit down, do a budget, and figure out how much of a payment you would feel totally comfortable with. And then spend less than that. No big fancy house it worth stressing over.
2. Pay for everything with cash - When Adam and I got married we agreed that we would never borrow money (well, except for a house of course). We pay cash for cars, furniture, vacations, remodeling projects, everything. This way you actually get to enjoy your things without worrying about how your going to pay for them, plus you never get buyers remorse because you don’t buy things on a whim.
3. Make a budget and stick to it – Keep track of what you spend for a month. Count EVERY penny…you will be astounded at how much money leaves your wallet without you even realizing it. Then sit down every month and make a budget. It doesn’t have to be complicated or fancy, I do mine with pen and paper. Give your budget a few months to start working, it takes that long to figure out exactly how much you spend/should be spending in each category. To learn more than you ever wanted to know about budgeting (and money in general) go to daveramsey.com.
4. Cut out the fluff – Adam and I have very few bills, mostly just the stuff you can’t get around like water, electric, insurance, gas etc. The only ‘extra’ bills we have are cell phones, netflix, internet…and even those bills are minimal (my phone doesn’t have internet or texting, cheapest netflix plan…). We don’t have cable, or gym memberships or whatever else people pay for. I’m very careful about how much I spend at the grocery store. We split meals when we go out to eat. It’s very very rare that I get my hair or nails done. I’m not saying you can’t have fluff, just have it be purposeful and within your budget.
5. Learn to be content – All of the above are important but I feel that this one – a matter of the heart – is the most important of all. If you are reading this right now, then you are very blessed. It means you have internet access and enough free time to do things you enjoy. You probably don’t have to worry about where your next meal is going to come from. Even if things are hard right now you will come out of it and be a better person for having gone through it. The Lord loves you and takes care of you… what more could you want than that? You may be thinking that you will be content once you have a newer car or a bigger house or whatever it is you think you need. Those things would certainly be nice, but being content isn’t circumstantial – if you can’t be content with a little then you will never be content with a lot.
Being debt free is an amazing feeling. There is so much freedom in it…we don’t have to stay in jobs we hate because we have crushing bills to pay or work long hours just to make ends meet. I’m not saying we have done everything correctly and that paying off your mortgage early is the best thing for everyone. There are down sides…like the fact that we don’t have much in the way of investments or any retirement savings. But we’re only 27, and I don’t think that is too late to start.
Anyway, I wanted to share because I am really excited about not having a mortgage. And after all, this is a blog about my home – and what is more relevant than owning it scot-free? As usual, if you have any questions (or want to tell me why paying it off was a dumb idea… I’m prepared for that too) feel free to e-mail me and I’ll answer you as best I can!