My dream is to be debt free. This means a lot to me because I have worked really hard to get to a point in my life where I can actually have things that I will keep for the rest of my life. Such as my home. My husband and I bought a house nearly four years ago and my dream is to pay my house off early and be debt free. Below is a picture of our home about a year after we first purchased it.
This home holds a very special place in my heart because when the recession hit my husband lost his job and I went back to work part time to help until he found a new one. I ended up getting a full time position and a promotion so I was able to pay our bills so that my husband could stay home. When this happened we thought that our dreams of home ownership were going to have to be put on hold for a while, but it turned out that this was not the case.
Not only were we able to finance a house on my income alone but we got out home for next to nothing due to the recession. I was only making about $13 an hour at the time and our house was on the market for $120,000. We offered $110,000 and it was accepted. That made out payment calculate out to $777.21 a month with insurance and taxes included. That was less than we were paying to rent a two bedroom apartment and this was a four bedroom house.
The reason I am so attached to this house is because it is my very first home and we were able to purchase it for such a deal that it is ideal to try and pay it off early, especially since now that the economy is shifting back upwards our home is worth nearly twice what we financed for it.
There are many ways to achieve this dream and there are a lot of resources that can help get you to that point or at least help you understand what you need to do to get to that point. One of these sites, as Dave Ramsey highlights in a lot of his writings if you pay a little more every month towards the principal of your loan then you can slowly pay off your mortgage early. Depending on your finances you can budget to move quick or slow towards this endeavor. Others have used tricks that are highlighted in How to Pay Off Your Mortgage Early.
Some of the barriers that exist for me meeting this goal is that I have four children, and with children comes an even bigger element of surprise. For example there are things that come up that may not have been budgeted for or may be an emergency such as an illness or an accident. There are also possible issues with the home such as repairs that are needed or appliances that may need to be replaced.
At this point in our lives the extra money that we are putting towards our principal is minimal due to the other needs of our family, however our plan is to slowly increase that amount over time with pay increases and savings. We started small by having $100 a month automatically transferred from our checking account into a savings account to go towards the principal of our home. We plan on applying 50% of every pay increase towards that savings account. Then we use whatever has accumulated in that account and put it towards that principal in our home at the beginning of every year.
Here is my financials – Financial. Our plan for our budget is outlined above and we look forward to making progress towards our dream of owning our home without any debt.