The first step on our journey was deciding together what we wanted our life to look like.
Here are the things that we wanted:
- To be generous
- Our lives to be as simple as possible
- To be a part of a strong community with friends that we could grow with
- Time and space to create things
- Flexibility with our jobs. I wanted to be able to have a job where I could work from home if we started a family.
Jason had always wanted to accomplish these goals by paying off our house. This idea sounded great but impossible to me. I did not know anyone who was free of school loans or credit cards let alone people who had paid off their house. Then I heard an episode of This American Life about the financial guru Dave Ramsey and once I started listening to Dave’s show and heard people who had paid off all of their debt including their house I started to get on board with this huge goal to pursue our dream of a simpler life.
MAKING A BUDGET
Now that we knew what we were working towards we had to figure out a plan to make our dreams a reality. We needed to get a clear picture of what was going on with our finances, so we started a budget.
- We wrote our income at the top of a piece of paper.
- Then we made a list of all of our essential expenses. The first budget was a bit of a guessing game but we looked back at our previous month’s spending so that we had actual numbers to work with. It took a few months to become really accurate. Here are some great budgeting forms if you are looking for a starting point.
- Then we subtracted all of our expenses from our income and saw how much money we had left over.
- We tracked all of our expenses on Mint.com and made sure that we were working within our budget.
- We then had a clear picture of how much extra money we would have to put towards the house after our necessities were paid for.
OUR DREAM HOUSE
You can probably tell that our dreams are pretty modest and so was our dream house.
Choosing a house had to get us closer to our dream of simplifying our life. This was how we knew that we had found our dream house:
- Everything that was really important to us was within walking distance to our house. The grocery store, most of our friends, our church Liberti, restaurants, coffee shops and galleries are all less than a mile away. Jason is also able to bike to work. We did not want to spend any more of our lives than we had to commuting in cars.
- It had character. There were old original hardwoods, plaster walls, an old built in armoire, and a little patio out back.
- It also had the ugliest kitchen I had ever seen and some bizarre things happening in the bathroom. We had seen so many houses with cheap renovations that were so sad looking. We knew that no matter what if we were going to find a home in our price range we were going to have to renovate the kitchen and bathrooms ourselves and both of us would much rather rip out old and ugly fixtures and cabinets than pay twice to undo someone’s cheap rehab.
- It had a garage! In the city this is almost unheard of and we have dreams of making it into a beautiful studio where we could spend time making things.
We were able to get the first time homebuyers tax credit and bought right after the housing crash and ended up getting a great deal on our house. At this price we knew that we would be able to pay for it on one of our salaries if one of us lost our job. It also meant that as long as we had two incomes we could pay a huge chunk every month on the house.
HAVING A FINISH LINE
Living on only necessities and not going on vacation or going out to eat was painful. I felt like we were working so hard and all of your money was going to a huge seemingly insurmountable goal. It was easy to start to feel defeated. So we needed a finish line. We needed to know that there was going to be an end to all of this sacrificial living. So we plugged the amount of our extra payment into this mortgage calculator which gave us a date when our house would be paid for. AND HOLY COW all of that simple living was going to be worth it. We were going to be able to pay off our house 10 times faster than the normal mortgage holder. Every time I wanted to buy something I would ask myself if it was worth pushing our house payoff date back. And when we made more money with raises or freelance jobs we plugged that number into the calculator to see how much closer it would bring the date of paying off our house. Every penny counted, money that we made and money that we spent was now tied to a goal so it made us view our purchases differently, it made it easier to say no. Accomplishing our goal together became more important and exciting than buying things.
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