I know it's already a few days into April, but I wanted to tell you about the experiment we're doing this month. (I will also be updating you on how it went at the end of the month in a later post.)We have already slashed a lot of things out of the budget, and we are doing really well.
But, we have discussed doing more to pay the mortgage off faster.
Historically, mortgages have only been around (as we know them anyways) since the 1930's. People back then didn't really want to borrow money like we do. More and more people borrowed money to buy houses and part of that (not the only part mind you) is that people borrowed more than they should have to buy a bigger house. If they would have bought something smaller then they could have paid it off faster and sold it in a few years so that they could move up to something larger if they needed. Our consumer culture of want it now has made us broke and unhappy. I'd rather come at life from a point of enough. (I might write another post about this later.) If you are interested in the history of mortgages this is a good place to start.
Here is the break down of our mortgage. We have a 15 year mortgage with a good rate, but it is the biggest payment that we make each month. The payment is 26% of our take home pay. I know you're thinking, "Hey, that's not too bad!" And you would be right-kind of. Dave Ramsey says that, "Limit your monthly payment to 25% or less of your monthly take-home pay. (source) We are 1% over his suggestion. If we were paying the minimum payment. We haven't been paying the minimum for some time now. For most of 2015 and all of 2016 we have been throwing money at the mortgage. It's going down considerably now. But, its not enough. We are debt free and we want it gone. So, how do you do that?
Well there are a few ways to do it. We brainstormed some ideas. There is no way to make the payment smaller, but we can make the money we send them larger. Here are ways to do that.
1. Get another job.
I know...you don't have time. Well, we don't either. Both of us are working hard to support our family in different ways. DH works overtime when he can and all of that money is going to the mortgage.
2. Work overtime at your job (If you can...)
Not every job has overtime that you can work. Some jobs you can only work so many hours and then they will send you home. (I've been there.) The company might want to keep you as a "part-time" employee so you can't work over 38 hours (I'm looking at you CVS!) Or maybe they just don't have enough work to go around. Either way, if you can do overtime-DO IT! It is worth it in the long run.
Every 2 years DH's job has a mandatory process that has to be done as quickly as possible. Basically it's all hands on deck until it's done. So, we sent all of that money to the mortgage as well. (And we're looking forward to the day that we can keep it all and take a vacation or invest or maybe fix up the old homestead some more.)
Then there is the overtime that gets offered. Someone wants to go on vacation, so someone has to work. He's working that the weekend of his birthday this year.
3. Lower your expenses
This sounds easy to do....But, we're learning its not. We made a budget and took everything out that was discretionary or frivolous. We're paying the utilities, gas, minimal groceries, and we opted to keep our "play money" too. You can do your differently, but those are the only month to month things that have to get paid.
Buy Nothing New -This is a cool website to check out if you've never heard of this concept.
But, we've taken it a bit further with not buying anything new or new to us this month. It's only for a month and it makes you think about what you are buying and really think about if it is necessary.
All the money that is in our account that we would have spent on something else, is going to the mortgage instead. Hopefully, we can take a big chunk out of it and lower the time we are slaves to the mortgage company. (and yes, we are slaves to them by giving g up future earnings to pay the bill. Check out this website for a more detailed description of what that means.)
*DH wants me to add that the purpose to him of buy nothing month is not just to delay purchases, but to give you a long enough cooling off period so that you can determine if its necessary in life. So, that you aren't impulse buying. It's a way to train your mind to not 'buy, buy, buy' but, to think and to get used to not buying things all the time. It can also serve to break the habit of mindless buying of stuff. You can use your imagination to see what you can use, that you already own, to fix a problem.
Maybe we could all do with a little more thought about our finances? Instead of spending like the bill isn't going to come due tomorrow, maybe save like something is going to happen. Because, lets face it, sometime you might want to retire. Or something might happen, like loosing your job or health issues. Wouldn't you be glad to have your mortgage paid off and $100,000 in the bank?
Give it some thought. Maybe you will want to do a buy nothing month too.
I'll leave you with a few of my favorite quotes on consumption and consumerism.
"There's this idea that somehow you've got to keep changing things, and as often as possible. Maybe if people just decided not to buy anything for awhile, they'd get a chance to think about what they wanted; what they really liked..." Vivienne Westwood
"Advertising has us chasing cars and clothes, working jobs we hate so we can buy [stuff] we don't need." From Chuck Palahniuk's book/movie 'Fight Club'
"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like."
Will Rogers
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