Debt Free Journey Story- Mortgage Free

A Fall view of our home

If you know me at all, you know that I am quite passionate about Debt Freedom.  Even before I ever got married, I had the goal of paying off my first house.  That goal has followed me around over the years and houses.  My mom introduced me to Dave Ramsey back in 2004 when I had recently graduated college and had some college debt to my name.  I read the "Total Money Makeover" and started applying the baby step principles to paying off my college debt.  And by December of 2005, within 18 months of graduating college, I had my $21,000 student loans paid in full.  It was amazing to accomplish such a task, especially considering I only worked part time during some of journey.  I didn't follow the steps perfectly, considering the following December I bought my first house.  I didn't have a large downpayment, but still bought the house.  But other than the mortgage debt, I stayed debt free.  I payed cash for my 2nd car.  

I married the Laird in 2010, who was even more financially wise and frugal than myself.  So that was a good combination for money matters within our marriage.  We've both been on the same page when it comes to spending for the whole of our time together.  When we got married and joined our incomes, we made the best decision ever.  We knew that once we started a family, we would move to a one income situation, so that I could stay home and raise our children and eventually homeschool.  So from the time we got married and had 2 incomes, we purposefully decided to live as if we only had my husband's income.  My income went directly into savings and was never considered available for spending.  This was the greatest decision ever and would be my best money advice to newlyweds.

You can check out my other debt free posts Here

So we bought our home in October of 2013.  We had a 6 month old baby.  This 1890's poor farmhouse needed work.  The stairs were too steep, and the 2nd floor ceilings were too short.  We paid to have contractors put in L-configured stairs and vault the ceilings for the master bedroom, hallway and bathroom (we left the kids bedrooms with low ceilings).  We paid cash for that work, thanks to my saved income for those couple of years of being married-no children.  Over the years we have continued to work on our house and do many projects.  

Over the course of the past 7 years, we have taken different approaches to paying on our mortgage.  In the beginning, we didn't pay anything extra towards the principal simply because we had spent so much on the renovations and down payment.  But after a couple years we started paying about $100 extra towards the principal each month.  In 2015, after our 2nd child was born, the interest rates were very low, so we decided to refinance the mortgage down to a lower interest rate and a 15 year loan from 30 years.  I think we got 2.75% down from 4.6% or more (I cannot remember).  And at that point we were only 2 years into our 30 year mortgage.  So it seemed worth it to do, since we didn't plan to pay the mortgage off anytime in the near future.  The amazing part about our refinance, was that our monthly payment only went up about $100/month.  We continued to plug away and chip that mortgage down.  Then in 2017, our savings had built up, so it seemed wise to pay down some more of our principal in a chunk.  That felt really good, so we upped our monthly extra principal payment to $500. Watching the principal go down more quickly was very cool, but we still had a long way to go.  In 2018, we decided to pull back our extra contributions completely.  We had some plans for the following year, and decided we needed to save the money to have cash available for those plans.  In December of 2018, I found out I was pregnant, not planned!~  Very exciting, however that threw a wrench in our 2019 plans.  Our plans and lives got flipped upside down for a bit, and we had to re-evaluate.  We decided that our 2019 plans needed to be deferred year.  The Laird wondered if we buckled down, would it be possible to pay off our mortgage completely within the next year (2019).  I did the math.  It was going to be very tight, and we would have to utilize much of the money we'd saved up the previous year, but we could probably do it in about 15 months (March of 2020).  So we ventured into this gazelle intense debt paydown of about $75k-$80k left on our mortgage in that next 15 months.  

AND WE DID IT!  In December of 2019, we were on track for payoff in March 2020.  We had money saved up in other areas.  So I got a little pay crazy and ended up borrowing some money from our emergency and car funds (with intentions of paying the newly freed up money from no mortgage back to those funds), and paid the mortgage off on December 21, 2019!!!

So now we have been mortgage free for 4 months and it's pretty amazing.  Our money comes in and goes directly into savings funds, while our monthly expenses have been decreased dramatically.  We now have to save money each month in order to cover our property/school taxes twice a year.  So much of what was used to pay our mortgage now goes into a fund to pay property taxes and fund improvements and repairs.

So that's our short/long story of becoming Debt Free/ Mortgage Free.  We do still have a 3 family rental property that we have owned for 9 years, which still has a mortgage.  But other than that, we don't owe anyone any money.  It's time to follow the age old tradition of getting a new front door and painting it red.

Accomplishing this huge goal, opens up so many doors for future endeavors.  We are free of being slave to the lender any longer!  Doesn't that sound amazing?  If this inspires you at all, I encourage you to check Dave Ramsey out.  Work the 7 Baby Steps- they are so straightforward.   It may take some retraining and building new habits.  It may be hard.  But doing hard things is worth it.  Because when you live like no one else today, you get to live like no one else tomorrow!  

Official Number for 2017

BLUE is what we paid off in 2017

Last January, after evaluating our finances and goals, we decided we were in a good place to pay down our mortgage principal.  I blogged about the proposition of that goal for 2017 here: 
I've Got A Dream.  So this year, we've been living by a pretty tight budget and we've been doing great with it.  It is so FREEING to live by a budget and know exactly how much you have to spend in all areas of life for each month.  And the reward of beating the budget each month, is adding a little extra towards paying down the principal.  Yep- most people would reward themselves with a Starbucks or something else extra ... I guess I am of a different breed- I consider it a win to pay a little more down on the mortgage;)  We've moved from "tracking our finances" with a budget, into a land of "living within our budget".  And looking back throughout the year, and doing the math-- it has paid off.
paying down or mortgage principal.  I blogged about the proposition of that goal for 2017 here: 

STATS:
From Jan. 2017 to Jan. 2018 we PAID OFF $31,276.55 of our mortgage balance!!
From 2013- we have now paid off 36.5% of our initial mortgage

Initially we started with about $127,000.  My initial hope was to get down to $110,000 on our mortgage balance.  But once we started, that hope became an daily awareness.  With every purchase, I considered how that affected our goal.  And let's just say, I refrained from purchasing A LOT this year.  That's the only way a 1 income family could make that large of a dent in paying off debt.  We cut back spending in a huge way.  Basically every dollar that came in each month was accounted for, and spent on something.  Dave Ramsey refers to this as "Zero  Based Budgeting".  So all the money is spent on something- and in our c

ase, a lot of that money was spent on "Mortgage principal".  A lot meaning, $31,000!  Yay!  That initial goal of getting the mortgage principal balance down to $110,000 then turned into breaking $100,000.  And we did it!  We're heading into 2018 at $95,276 to go.  So in 12 months we were able to trim down $31,000 of our home debt.

So if that isn't inspiring and motivating in a personal finance realm- I don't know what would be.  If you give yourself a financial goal, and you have a plan of how to reach that goal- then your money won't keep magically disappearing on you.  Because let's face it, that is exactly what happens every month when you don't have a plan.

We are still on an early pay off plan for our mortgage, however our goal for 2018 is to redirect a majority of our excess money towards a sinking fund for an exciting change in 2019!  Sadly we won't be bringing that mortgage balance down as drastically as we did this year, but we have a plan for something great in the near future.  And in the mean time, we will keep chipping away at our $95,000.

Here's to a NEW YEAR of making and achieving NEW GOALS! Happy New Year!