The end of November Jason and I accomplished a big financial goal of paying off our mortgage. This was the last debt we owed after I paid off my 2005 Chevy Cobalt in 2013 and my last student loan in March 2015. Becoming debt free has always been a high priority for us.
We bought the house the end of July 2015 for 87k with a mortgage of $56,500. I include these figures because I realize that 1 – the majority of people’s houses cost well over 87k and 2 – not everyone has a large of a down payment like we did. I also want to mention that our house was not a “fixer upper” as I know those tend to be a lot cheaper. Neither of us are handy enough or enjoy home projects enough to undertake that challenge.
Instead it is a smaller house of 1008 square feet on a 4900 square foot lot. It is a 2 bedroom, 1 bath with a small kitchen, laundry room, hall with closet, large living/dining room and large attic. It also came with a small shed and a fenced in yard. For the two of us it is more than enough room and while I’ve always preferred eat in kitchens, I’ve learned to improvise when more space is needed. I would encourage anyone looking to buy a home to consider buying smaller. It will cost less initially and save money in utility bills. It also requires less cleaning and limits the number of random items purchased to decorate.
With many people resolving to spend less and save more in the new year I’m going to offer a few tips we utilized to pay our house off in less than 3.5 years and achieve financial freedom.
1 – Pay more than your mortgage payment requires as often as possible. Nearly every month since buying the house we made an additional payment. In March 2018 we made it a goal to pay an extra $1400 a month minimum. Some months we came up a little short, but other months we were able to pay even more. This decreased the amount of interest owed and assured more money was going to the principal. Even a payment as small as $50 a month can make a difference and ensure a mortgage doesn’t require 30 years to pay off.
2 – Put any “extra” money towards the house. This can include bonuses, money from side jobs, tax refunds, etc. I coach track and line judge volleyball games and the money earned from those went towards paying down the mortgage. Jason picked up extra “on call” shifts whenever he could to increase his paychecks and pay more on the house as well.
3 – Limit eating out. I feel like this tip is offered all the time on money saving articles, but it really is a huge way to save money. There were some months where Jason and I only ate out once at a restaurant. Sometimes we would treat ourselves by just going out for a shared appetizer and drink or picking up a pizza. We also chose to eat out for breakfast instead of dinner if we wanted to eat out since it was a cheaper meal. The best plan to stop eating out calls for cooking at home and meal planning which is a subject for another blog.
4 – Cut the cable cord. Last spring our Comcast package lost a few of our favorite channels. We took this as an opportunity to explore other options. Jason found Philo and for $16 a month we receive 43 channels, some of which we didn’t even receive with our Comcast package such as HGTV. I will advise a streaming device is needed for the service. We already had a Roku because we had Netflix. We also bought a cheap indoor antenna to receive local channels. We had to retain Comcast’s internet services as my work’s VPN network cannot run on satellite internet, but we reduced our Comcast bill from around $120 to $75 a month by cutting out TV.
5 – Break the consumerism mentality. I’ve come to realize this is a big challenge for most people as consumerism is ingrained in the brain. It requires a change in mindset and philosophy towards buying “stuff”. I recommend reading about simplicity and minimalism. While it’s not needed to go to the extreme of these concepts, the overall principals are very applicable. Once the desire to buy unneeded items (clothes, electronics, etc) is overcome, the extra money saved can be put towards paying off the mortgage.
What are your favorite money saving tips? Does being in debt bother you and if so, do you pay extra to get out of debt faster?