Planning for a Paid for House: Part 1

Any big goal requires planning. This is not a gift of mine. I hate planning. I don’t even like deciding what to eat for dinner…I will plan for dessert though!

Despite my planning reluctance, we need a plan to pay off our house. The next three posts are how we plan destroy our mortgage. 

The steps in this post are the most important.  They are essential to achieving ANY financial goal.  Here’s how we ended up in a good situation.

Step 1. Forced into a small mortgage.

The most important step in reaching a financial goal is to have money. Since housing is a huge expense, an easy way to free up cash is to make sure your mortgage/rent payments are small.

After we got married I was unemployed for six months. In that time we moved from Memphis to Arkansas. The town we moved to doesn’t have rental options–like none. And renting is more expensive than buying–we would have paid $150 more every month to rent a house than to buy a house.  Because we only had one income, we bought a small, older home that used to be filled with cats. We bleached it, tore up the flooring, and painted every inch to make it our own. The only thing that stuck? The name. We still call it the cat house!

Now that I have a great full time job, our house payment is only 1/8th of our take home salary. 

Step 2.- No car payment

Find a way to get rid/decrease your car payments. The first job I found in Arkansas was a part-time gig making minimum wage. It was 40 miles away. After paying for gas in “Dora”- My 1999 Ford Explorer- my salary was pretty much a wash.

Luckily, we got a tax return for $4,200. My dad found a beat up 2009 Chevrolet Cobalt and made a few repairs.  Now, she’s mine. Her name is Colbie.  She gets awesome gas mileage, but she doesn’t have power locks or windows.  I don’t mind- it only costs 40 to fill up the tank.  Plus, I’m building up my left arm bicep!

Step 3.- See ya later student loan gator

The last category? Other debts. This category includes student loans, credit cards, other loans…even my favorite, Banana Republic Credit Cards. 

I came out of college with $20,000 in student loans. Six months after I graduated, the lender came knockin. They wanted their money back, can you believe it? They wanted a payment every month?  Since I’m not a planner, I was terrible at making those payments.  Other purchases seemed more important.

Since we have a small mortgage payment, no car payment, we decided to live on one salary and kill those loans as fast as possible. We sacrificed shoes and cool stuff to get rid of those nasty beasts. We killed them completely last Christmas. It was the best present. The lender sent me a letter and it said “you killed us, we are dead.” –at least that’s what I pretend. 

Take away–

My unemployment, small salary, and missing payments, and our sacrifices led us to a great place. Debt free. Isn’t that weird?  We haven’t had a long leash to strangle ourselves.

You need one thing to start a financial goal: free up some cash.  If your money is tied up, it’s impossible to make progress. So check out these three areas: house payment, car payment, and other debt, to see where you can find some wiggle room– $50 of free money a month is a fortune.

Maybe you don’t want to pay off your house, maybe you want to take a big trip, buy an awesome car, or buy a snake farm. Whatever it is, free up your money and you can head towards your dreams.

Next time, I’m going to you what we’ve done recently to free up some more cash.

Do you have a big financial dream?! Maybe you want to start one, and we can track our progress together… Let me know!

6 thoughts on “Planning for a Paid for House: Part 1

  1. renee

    Kelsie – I found you on MSM and glad I did. You are hilarious, your writing is fresh and clever and as a huge Dave Ramsey fan, I’m really excited to hear you are paying off your (cat) house!
    Woot woot! Cheers from Minneapolis, Renee

    Reply
    1. Kelsie Fannon

      Renee, thank you so much! I just started down this crazy road of blogging, so I really needed your words of encouragement!

      We are also huge Dave Ramsey fans.

      Do you blog? I’d love to follow it!

      Cheers back!
      Kelsie

      Reply
    2. YaYa Maris

      Kelsie, I enjoy reading your plans for debt reduction. Dave Ramsey helps put perspective on our money.

      Way to go and I am confident that you will reach your goal.

      Aunt Maris – Columbia, MO

      Reply
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