When Lianne and I finished college we both worked and we saved as much out of those early paychecks as we could. Later that year we bought our house. The original loan was for 30 years, $110,000, at 8% interest. Our goal was to pay it off by the time we turned 40. That gave us 17 years. A couple of refinances, and two rounds of major home improvements later, and we are almost there. It’s been 19 years.
In 2003 we found termite damage in the living room. Somehow a wall repair turned into a full remodel. 🙂 We expanded our living room and added a 4th bedroom. Here are some pictures. We refinanced to get this done, got a lower interest rate, and went further into debt. A few years later we remodeled the kitchen. We knocked down a wall, got brand new cabinets and appliances, and nice counter tops. We refinanced, got a lower interest rate, and went just a little further into debt. I think this is a pretty typical American story. Maybe others move into bigger homes instead of making their current home bigger, but the idea is the same. Even with the stricter lending standards of the past few years, banks are ready to help you go into debt. We, on the other hand, are ready to be debt free.
Our hope is to have the house paid off by next Summer. Lord willing. (Prov 16:3, James 4:13-15) Here are a few of the practical things we are doing now, and have done pretty consistently over the years, to save money.
- Kept our cars as long as possible. No car payments. We’ve got 3 vehicles and they all have more than 120,000 miles. Our “new” van has over 160,000.
- Minimize monthly entertainment expenses. Monthly expenses add up over time. We’ve always had minimal cable TV packages, and for the past couple of years we haven’t had cable at all. We have the slowest internet package, and Netflix. That’s it. Our internet + TV bill is under $60 per month.
- Minimize cell phone bills and buy used/older cell phones. We have 3 family members with cell phones, and our combined monthly bill is $96 / month. Each of our phones cost $120 or less, and we keep them until they die.
- We keep our home as energy efficient as possible. Our A/C is set to 77 or 78. During the winter our heat is set to 67 or 68. When our electric hot water heater died, we converted to a tankless, gas powered heater, which is much more efficient. When we needed a new A/C, we spent a little extra to get a more efficient system. It pays off over time. Our monthly gas/electric bill averages a combined $147 / month.
- Recently, we’ve started budgeting our expenses much more closely. We realized that we use Amazon like a vending machine. Put $20 in and the item drops on your doorstep. We spent hundreds of dollars on things that we didn’t plan for and that we didn’t really need.
- We still use our credit cards, but we do it intentionally and within our budget. We’ve reigned in impulsive spending.
- We shop at Sam’s Club and try to avoid the daily trip to the grocery store for small pickups. Those quick trips inevitably end up costing more than intended and it adds up.
The bottom line is that every dollar should have a purpose, and we are surprised with how little we miss the things that we do without. We maintain a budget, but we have flexibility within it to handle emergency situations or opportunities for charity. It seems worth it to us to sacrifice some now so we can be debt free and secure in our retirement.
We can’t play Pokemon Go because we don’t have data plans with all our phones though … Bummer.