Choices. I said something real smart the other day and I’ll try and remember it…hum…something like, “our choices today make up our harvest tomorrow”? Brilliant! Someone may have already said this and I’m copyrighting. We have heard this sort of saying about today’s choices are tomorrows….or yesterday’s choices are todays something rather.
Anyway, the smartest thing we can do to ensure a good tomorrow is to really weigh in on our decisions. You know in your gut what to do in all of life’s situations.
One top priority is to pay off that mortgage as fast as we can. I’m really pissed off after Bali pointed out that we have paid $24,000 on our mortgage in the last two years and we only made a tiny $5,000 dent in the bill! I logically knew that the bank was taking some interest and that it was going to take some time to pay the mortgage off, but it’s not until you really read that mortgage statement monthly that you begin to get just what a huge chunk the bank takes and how little goes to the Principal. Then you add things up after a few years and that is when you slam your hand down and yell, “The injustice of all this!!”
I recently spoke with a new friend from my YouTube community about this and she greatly inspired me with a story about paying off her mortgage within five years. And the woman is a single foster parent of six adopted children who was dealing with a major illness with one of her children at the time and had taken out a loan for huge medical bills, but still managed to pay this mortgage off at that time despite all her charges and obstacles. Now, I didn’t ask what the beginning amount was but who cares, she did it and so can we.
Here is another story I just love to watch to get motivated. This is a very short video that is so inspiring. I watched this years ago before I even had a mortgage:
In this time and age of debt and consumerism along with an impending recession lurking in the shadows, it seems prudent to have a paid-off house. I see the housing market still climbing in some areas, stalling in some and only declining in areas where the houses are already in the absurd millions or so. I see rents doubling and hear the news with tenants lamenting their rents and having to move out of their apartments that have been their homes for years because the greedy landlord is wanting a piece of the high rent pie.
I’m grateful to have a house and I’ll feel more solid and we will live even more simply once it’s mortgage-free.
You know what else makes you feel safe when you wake in the middle of the night? Substantial savings. I’d say at least six months’ worth. Then if things happen…as they always do, you can get by for six months.
But how, crazy Kate, you ask? Dave Ramsey is really the person to go to but since I’ve listened to him and checked out his book, Total Money Makeover, twice, I’ll share what I know.
First, you go here:
You put in your mortgage, 0 down payment, and your current interest rate. Click on the 15-year mortgage. It will give you a new mortgage payment. It includes the taxes, insurance and MIP (that is what they call mortgage insurance now). If you don’t have MIP just subtract that. We still do have it.
That will be the new monthly payment.
If you want to shorten this, even more, you pay an extra payment each quarter. When tax returns come you apply these as well. Every time you have any extra money you throw it at your mortgage. But make sure those loan people know that extra payments go toward the principal only.
Now, if you want to save fast and big try this; take that tax return and start saving in a separate bank. Preferably a local credit union. They tend to not nickel and dime you. You then do a budget and figure out how much you can save each month. Mary Hill says to save 10%. Set a goal to save as large a chunk as possible and commit.
The next trick is to put the money in the savings account the first of every month. Or have your bank do an automatic transfer of funds at the beginning of each month or with each check deposit.
Personally, we had to have a separate bank and we deposit the first paycheck of each month. The second paycheck pays our mortgage two weeks early and then we live off what royalties I bring in from books and YouTube. We live off around $2,000 a month by choice because we committed to saving $1,000 a month. Sometimes it’s less than $2,000 and the account gets overdrawn a bit or we get creative with the lentils and barley, but we stay on course no matter how tempting a grocery haul or thrift store shopping spree may be.
We make do or do without! Just like our grandparents during the Depression. Use it up, wear it out, make do or do without!
Tonight I made the last of our ground beef into a spaghetti sauce and I threw in extra sauce to stretch it for two days worth of meals. I had to put an old thrift store lamp out by the garbage as it was “worn out” but I didn’t even think about getting another, I just rotated the lamps in the house to accommodate the missing light.
Those are tiny, daily things but they add up. I also ground some coffee that was given to us in the blender as I won’t buy a coffee grinder. Blender works great by the way. I baked bread in the bread maker for tomorrow’s toast and sandwiches. We grew sprouts in the window and simmered a pot of black beans for something new besides the regular pintos.
I’ve stocked my pantry pretty well so I’m only shopping for $50 worth of groceries every week to ten days. I find I only need a few items such as potatoes, onions, soy milk, bananas, to make many tasty meals with the assorted beans, lentils, and grains we have. I’m learning to make all sorts of things with oats and grains such as quinoa bread or oat flour when I run out of all-purpose white flour.
When there is extra money or I do get to go on a semi grocery shopping spree it is almost as exciting as a trip planned to Disney Land (almost). When I’m gifted with a coffee card or a bag of hand me downs I am thrilled beyond thrilled. Little things that are taken for granted mean so much now.
It is a game and you can be miserable or really enjoy it and thrive as you successfully beat the system and cheat the bank. In the end, you will be so proud of what you have accomplished and when others are still struggling to pay a huge mortgage you will be at Goodwill having that shopping spree you waited five years to have.