2009 better foundations

Wow! Totally amazing. It's so good to know it can be done.

Please post again when it's finished! It'll be an inspiration to the rest of us....

Your admirer,
CecilyC

We paid off our mortgage. We were motivated by an original goal of paying it off early, the current economy, and major expenses we have coming up soon(new roof, replacing our cars). Some people buried money in their front yard. We poured money into our mortgage. We paid off $30,000 in principal and interest the last 10 months.

We purchased our current home for $193000 and took out a mortgage for $123000 @8.25 in October 1999. We refinanced twice since then. The second refi for 103,000 was a freebie from Bank of America that was technically a conversion to a home equity loan---our house in theory was worth about $480,000 at the market peak. Our house is now valued closer to $200,000 based on a recent sale across the street similar to ours.
owch.

I figure it costs us about $1500/month to live in our house now which includes everything from taxes to trash. About a third of that is designated to future repair and replacement costs. ( we budget: taxes $305, insurance $125, heat/ water/ septic /electric/ trash $335, cable/ landline phone /internet 150, repair/replace/maintain $500, balance to cleaning supplies and essentials like toilet paper).

Congratulations, ellie!!!! You're an inspiration to the rest of us...

Out of curiosity, how much did you "actually" pay in principal and interest, taking into account those refinances and prepayments?

CC

It's funny that you titled your thread 'better foundations.' Today that is appropriate. Congratulations on paying off your mortgage. What now?

Awesome! And count yourself lucky you refied only the balance, and never took cash out. Else you'd be hurting! Wink

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DTR

Super awesome!! How wonderful that you paid off the house in 10 years, fantastic!!

Could you post more details, when did you decide to pay it off, have you always been paying more towards the principal, if not always, when did you start, etc. I would love to hear more so I can steal some ideas.

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Sam

http://adventures-of-sam.blogspot.com
(Follow Sam's financial and real estate adventures.)

Thanks for your kind words Peachy, DTR, Sam and Cecily. Paying off the mortgage is more of a mental win for us than anything. As I mentioned before automating regular additional payments and keeping a current amortization chart handy were the keys to our early payoff.
I decided as soon as we started looking for houses that we would pay it off early-- at the time I was naively planning on paying it off in four years. And I think we did pay it off in four years--the first two and last two of the past ten years is when we were really focused on getting the house paid off. In middle six years we bought cars, spent money renovating, travelled. I had 11 very young nieces and nephews. I spent lots of time and money with them then. No regrets there. This was when credit cards and home equity lines of credit were being touted as alternatives to emergency funds and savings also. Our prioriities shifted back the past two years with the changing economy and aging in laws who needed a lot of assistance from us. So what's next?

November & December - holidays without financial regrets , add 4k to EF fund, maintain $1500 in my personal savings account, pay off most of credit card debt
Mostly trying not to add to credit cards. I don't have money set aside for the holidays again this year and trying to work out something reasonable out of thin air is frustrating. I tend to discount that I need to budget as much as I should because this year my gift list is fairly short, we aren't doing any entertaining or having relatives stay with us or travelling distances. So that is pretty manageable really. The spending problem for me is two fold: I work really long and unpredictable hours November-December and I compensate by escaping to the coffee place nearby, the movies, a few extra meals out, a manicure or two. Plus I work in a retail environment and the constant exposure to the unexpected "deals" and merchandise around the holidays is sometimes unnerving. Like a diet, I can walk away most of the time. Sometimes I will crack and buy.
So the question I've been working out at breakfast every morning is: What do I really need and how am I going to pay for it?

Since I last posted I been giving the next seven weeks of potential holiday spends/ budget a lot of thought.

I gave myself an initial cash budget of $400 from my savings and rifled through drawers looking for any gift cards, gift idea lists, spare change, marshalling all my resources in other words. I don't have any particular skill, craft, baking idea that I want to mass produce nor did I find a stash of existing gifts. (Last year half my list got North face gloves, headbands, hats I bought the previous spring at 90% off. I've cut back dramatically on buying just to have gifts on hand.) Plus i thought about treats and how to space them out for maximum effect. Yea. And charity naturally came to mind too.

A nice outing yesterday:I took my 86 yr old mother in law out to the local Christmas Tree Shop so we could talk about the holidays while looking at all the cheap holiday decorations as a backdrop. She had never been there. i had 20% coupon so we could buy cheap stuff even cheaper if we actually decided to buy something. She's depression era frugal, but likes to look for fun too.

In passing she finally accepted my offer to do one main meal semi catered from a local place and then we'd just buy the salady stuff, bread fruit, dessert. She still likes to have everyone stay at the house and has been reluctant to have anyone help because god forbid she should lose control. (And I don't blame her for that.)Traditionally she'd shop, bake, and cook like crazy while doing things in the most frugal manner possible. The past couple of years she's done less because she can't but wasn't accepting offers to help or bring food. I would just bring a carload of food over just as folks arrived at the house and that worked okay, . And I'll still probably do that too.

I'm feeling good about the holidays. I made it through the week without regrets and that's something given the sales have started where I work. I'm mailing two packages this weekend to family. No expensive last minute mail order for me. It's stiil 6 more weeks.

I tried to bring up the issue of Christmas and gifting with my husband and the extra food for mom's house, etc and he just gives the "eh?' shrug. I let it go for now. He's never been that interested in the details of how I pay for these extra things, but this year I am.

In the previous post I wrote about about catering a meal and bringing a carload of food for Christmas to his mother's house so we wouldn't get mac and cheese and freezer burned "surprise" meals. By the way my mother in law is quite financially secure, but spending money to have other people cook or to bring in store made food is just bizzarre to her. If I bring things she's gracious, but she doesn't think I need to bring food unless there's something I just have to have for myself. I am frequently invited over for a meal, so I know things have changed for her, but her own children don't see it. They mostly just see this as an extension of her super frugality. Ha, ha.

I spoke to other family members this week about her lack of mobility and suggested we step up with the food prep for her. My sisters in law do seem to get it and offered to bring food or be responsible for a a meal, which is awesome. I don't think the others are as stressed about the food issue also because they are far away, have their own celebrations before they arrive and they are a little scared of our forceful mother in law. For me, just the way things work out, this is my main holiday celebration. If don't bring it, I don't get foods I associate for the holidays. What do I really wantto eat