Our Mortgage Pay Down Report – First Quarter 2019

Ah, I can hardly believe we are $18,498 lighter than we were in December. It is an amazing feeling!

The first quarter of 2019 was a good one for us. The profit from my Etsy shop was able to cover our food budget along with a few other bills and our extras, like an anniversary camping trip. We also utilized part of our tax refund to pay down our mortgage. While I know it isn’t always ideal to receive a refund, since we are given so many child tax credits with eight kids, it is inevitable at the moment. If you do receive a refund, I’d love to encourage you to spend it wisely.

We have lots of extras on the horizon, including two birthdays and a graduation. April probably won’t be as good to us as March was.

I often use an early mortgage payoff calculator to play around with numbers. You can find my favorite one here. It is super simple. All you do is input your payment information along with how quickly you would like to pay off your mortgage. It then let’s you know how much extra you should send to your principal to achieve your goal.

Three years ago we were living paycheck to paycheck and I never guessed this would one day be our reality. Believe me, if we can do it, you can!

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Reasons to Downsize to a Smaller Home

We have recently downsized. And let me tell ya, it has been really hard for me to do.

I had no idea just how attached I was to stuff. And space. Without even realizing it, I had attached myself to items that don’t even matter. Downsizing is sanctifying. It really is. Every time I ignore my flesh and continue to purge, a small victory is won.

To be perfectly honest, downsizing was not my first choice. But the idea of debt freedom is so sweet, I knew this is what we needed to do. We are a family of ten, y’all. It has been hard. We no longer have that $800 utility bill though, and so many other things have been much cheaper, too. It really has propelled us forward in our debt free journey.

There are many, many benefits to downsizing homes. I thought I would share a small list of ways taking the plunge and moving into a smaller home is good for our family life. This has helped me to see hidden blessings in this season that we are in. So here are my top ten reasons why downsizing has been a good thing for us!

  1. Living in close quarters hones our patience.
  2. Our children will be better equipped to share, get along with, and even live with others once they enter adulthood.
  3. It is easier to monitor what type of material enters our homes when they are smaller.
  4. There are naturally more conversations when living in tight quarters, and relationships blossom.
  5. Much less time is spent cleaning, and more time is spent with our families.
  6. Finances are freed up, and more of our resources can go towards meaningful goals. Utility bills are cheaper as well,
  7. Financial and debt freedom is more easily attainable.
  8. Bad attitudes are seen more plainly, and we can address heart issues faster.
  9. Our children will learn that stuff isn’t as important as they once thought it was.
  10. Hopefully, one day we will see a shift from the materialistic culture we live in now.

I try my best to be quick to remind myself of the hidden “downsize blessings” that naturally occur whenever I miss our old home. Besides that, our finances look totally different now, which is huge.

What about you? Please feel free to share your favorite thing about downsizing with us!

How We Paid Off Over $30,000 in Six Months

(Hello, friends! I wrote the following post almost two years ago on a different website when we were just starting our debt free journey. I thought it might be good to share here is well. At the moment, $152,000 of our debt has bit the dust!)

If you would have told me six months ago that we would be $30,000 less in debt today, I would have laughed. We were seriously tapped out. Unless I put in time at my etsy store, I thought that we had absolutely no money to squeeze out of our budget each month. Well, if you could call our method “a budget,” that is. We pretty much bought whatever we thought we “needed” and then wondered where our money went each month.

Out of a sense of desperation, I decided to look into Dave Ramsey and purchased The Total Money Makeover. I devoured it! I didn’t know if we could really make the debt snowball work for us, but we decided to give it a try. We started cutting back in small areas, and before we knew it we had saved $4,250…just enough to pay for the new heat pump that we needed. I was astonished. We had NEVER been able to pay for an item that cost this amount without going into debt. With newfound determination, we decided to give it all we got. We are now $30,000 in debt lighter, and it feels so good! At the time of this writing, we are down to owing money on my student loan debt ($32,000) and our mortgage. I thought it would be fun to share the things that have worked for us since we are basically at the half-way point, mortgage aside. All glory goes to God!

This book is amazing. Seriously!

◾Get a good budgeting app. We personally went with the free version of Every Dollar, and it helped us really understand where our money was going at all times. For this to work, I had to be diligent to add every purchase. For a monthly fee per month the app can be linked to your bank account, but I was not willing to pay it!

◾If you don’t have the cash don’t buy it. Seriously. Stick to that budget. If a true emergency comes up, use the emergency fund. I’ve had to say “no” to many extras that just weren’t in the budget. It is difficult, but the payoff is worth it in the end.

◾Stay encouraged and motivated. After purchasing The Total Money Makeover, I started watching Dave Ramsey’s YouTube channel. These short episodes kept me motivated when I was tired of our new lifestyle. I have the phrase “DEBT = RISK” written on the white board in our kitchen as a reminder to me each day.

◾Cut the grocery budget where you can. We started going to Aldi on a bi-weekly or monthly basis, and only purchase a few items at Walmart. I began meal planning for the first time ever, and utilized the Freezer Cooking Meal Plan from Passion for Savings. Our family of ten now has a monthly grocery budget of $650.

◾Cut extracurriculars. This was a tough one for me. One of my oldest daughters is really involved in ballet, and it was taking up so much time and money. We were gone 5-6 days per week sometimes. We found a less expensive school where she only goes three days per week now. She loves it, thankfully!

◾Cut your vacation budget. Dave Ramsey advocates for no vacations until debt is paid off, but we have gone camping one time. While in Savannah, we spent our time at either low-cost or no-cost activities, and we didn’t even visit a single seafood restaurant. This was tough for me, ha! We do plan on taking a few more camping trips before too long. The kids really enjoy it!

◾Shop at consignment stores. I have been doing this for awhile anyhow, but it is definitely a big help. I do tend to purchase my boys clothes new since boys are so hard on clothes and there really isn’t much for them at second hand shops in my experience.

◾Use your tax refund to pay down your debt. Our tax refund was almost $10,000, and we put all of it on our debt. It wasn’t really hard at the time, because I was so motivated by the books I was reading and videos I was watching.

◾Shop around for insurance. We realized that we were paying WAY too much on our home insurance, and we shopped around for a lower rate. We ended up going with a different company that saved us $200 per month, AND we received nearly a $2,000 refund from our escrow account, which promptly was used to pay down debt.

◾Make sacrifices. We need a new cooktop, but they aren’t cheap. Instead, we purchased a $30 countertop double burner from Walmart. It isn’t ideal, but it works until we are ready to invest in a replacement cooktop.

◾Cut cable and other similar expenditures. We were able to find a new cell phone plan that saves us $60 per month, and we cut cable only to have it turned back on one week later at a much lower rate and a $200 gift card offer. We used the gift card to buy groceries, so even more money could go towards our debt.

◾Be content with what you have. If it’s not broken, don’t buy a new one. Try to find ways to use what you already have. These are a few of my new mantras. I’ve also tried to become more content with staying at home. When I leave the house I usually spend money!

◾Use your talent to make extra income. If it wasn’t for my etsy shop, we wouldn’t have paid down our debt as quickly as we have. If you have any skills that you can put to use in your home, I suggest giving it a try. But don’t go into debt to start a new business. It doesn’t necessarily take money to make money.

◾Use the Debt Snowball. When you pay off one debt, put the money you were using on that debt on your next one. We have paid off our debts from smallest to largest, and it’s nice to wave good-bye as they begin to drop off quickly.

◾MY #1 TIP IS…Pray and give it to God. Give Him all of the glory for all He has done. If your debt is being reduced, He is ultimately behind it. Just last week we were $570 away from paying off our travel trailer, and then we received two checks totaling $580 in our mailbox. We had overpaid our oral surgeon nearly five months ago, and had no idea. God was definitely at work!

What are we going to do next? Well, I’m not entirely sure. If we were to follow Dave Ramsey’s plan to a T, we would start attacking my student loans. I don’t like having only $1,000 in savings however. I think we might have our land surveyed and try to sell a piece of it to pay off my loans while building our Emergency Fund. If the sale of the land doesn’t work out, we will dump what we’ve saved on the Student Loans. That is our loose plan, anyhow.

While I do not know what the future holds, I look at debt in a totally different light now. While we hope to avoid it entirely, I know at least we will strive to only make purchases if we can pay cash, or have a substantial down payment in hand. I used to think I could afford an item if I could afford it’s payment. No more! We went from thinking we had NOTHING to use to pay extra on debt to having a decent sized debt-snowball to throw on it each month. Thank you so much for stopping by, and I hope this post has encouraged you. If we can do this with eight children, you can as well!

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How to Win with Your Finances

This morning I was really encouraged by an Instagram post from Ramsey Solutions, and I wanted to share a few thoughts with you guys. The post read, “Success is not one big splash. You win with excellence in the ordinary. Do the right thing, the right way, everyday.”

Boy, isn’t this the truth? Personal finance, if done the right way, is rather boring. It consists of thousands of tiny right choices that build upon each other.

To get our finances in order we don’t need to be perfect, but consistent. I mess up sometimes. For example, over the weekend we attended a craft fair and I spent nearly $30 on Palmetto Moon hair bows for my little girls. Nearly $30! I walked in thinking my max spending budget would be around $10. At least I walked away from that adorable $40 birdhouse, ha!

While I am disappointed in my moment of emotional overspending, we are doing okay overall because we are making the right financial choices at least 95% of the time. It seems ordinary and boring. Buying hair bows or whatever else sits on the store shelves is much more fun and exciting…in the moment.

“Excellence in the ordinary” takes both a plan and a deep desire to see a financial turnaround to execute properly. I normally do not buy $30 worth of hair bows because I know little sacrifices now will help us reach our overarching goal of paying off our house and reaching financial independence in other ways.

I would love to encourage you to start taking small steps today. And then do it again tomorrow. And the next day. Before you know it, healthy financial habits have been created, and you will be winning with money!

Things I Learned During My No Spend Clothing Year

Clothing. Oh, how I always loved clothing!

But in the beginning of 2018, I decided that I was going to aim to spend zero dollars on my clothing budget that year. With the exception of one black skirt from Ross, I succeeded.

It was tough at times. But after realizing just how much money I was spending on depreciating items during our debt free journey, I really felt sick to my stomach. I felt like I needed to make some changes to redeem my self going forward.

Clothing was a fairly easy thing for me to give up, simply because I had so much of it. I’m continuing on with my no spend trajectory this year as well. I’m not holding myself quite as hard and fast to this rule as I did last year though.

I learned so much last year. For example:

  • Needs are different than wants. All of the clothing I had accumulated? I wanted it, and didn’t need it. The fashion industry is very good at telling us that we must wear all of the latest trends each season. But in the end I believe this cheats us out of time and money spent on more important things. Is it wrong to look nice or “cute” while wearing clothing? Absolutely not! At the same time, we shouldn’t let the fashion industry dictate where we are spending our money.
  • Consumerism seems to be a never ending cycle, but it can be stopped. When I reassessed my wardrobe, I realized that all of my clothing needs were already met. It made much more sense to start redirecting our money towards items that retain their value. Clothing values drop super fast once they are used.
  • All it takes is a little bit of resourcefulness to style an item in a new and fresh way. Trying to find different ways to wear your clothing is resourceful and fun!

I’m very thankful for this experiment, and going forward, I will spend my money differently when it comes to clothing for myself. For sure, it will be a more thoughtful process. When looking for an item to meet a specific need, it is helpful to shop around to find a quality item that will last more than a month or two.

We Now Own 44.75% of Our Home

After our latest mortgage principal payment, I took a look at our amortization schedule and realized we now officially own 44.75% of our home! I base this figure strictly on our home’s original purchase price, so the percentage is most likely a bit larger in actuality. It is motivating to see this number climb upwards!

While I would love to look at this number from the perspective of what our home is actually worth now, I believe it is better for me to look strictly at this from the original purchase price perspective since it is a better gauge of how far we’ve come. Equity is amazing, but I feel like including it in the total might give me a false sense of security. I don’t want to let off of the gas!

We purchased our home in August 2017 for $255,000. At the time it appraised for $268,000. Also, since then we added an additional 400 square feet of living space to our home by finishing the garage.

Watching this percentage move in our favor is very slow going, but it is also encouraging and rewarding. By the grace of God we paid off the first 16 years of our mortgage schedule in 16 months. The reason we are doing this is freedom! We don’t want to worry about money. (Within reason. A budget is always important!) We want to be a blessing to others, too.

Sick and Tired of Being Sick and Tired – Part 2

Let’s start where we left off in Part 1 of our story. In 2013, our home went under contract quickly, and we were left scrambling for a new home. Where we ended up wasn’t my ideal choice at the time, though my husband loved it. It was an older farmhouse which doubled our living space, and it sat on 12 acres. What we didn’t realize was the huge increase in heating costs it would bring. Our summer electric and gas bill amounted to $800 per month!

We did not have the extra funds to sink into new windows and new heat pumps, amongst other things. Yet we did purchase a new travel trailer and owned fairly new vehicles. We went to Disney World every other year. Priorities, right? We were perfectly normal, and I didn’t believe we could do anything differently.

Near the end of 2016 I came across a mention of Dave Ramsey in a totally unrelated YouTube video, and I decided to purchase The Total Money Makeover. The rest is history. My husband had suggested we learn from his teachings a long time ago, but I told him there was nothing we could do differently so it wasn’t worth our time. How foolish!

After reading The Total Money Makeover, we cash flowed a new heat pump in two months time. I was astonished. How did we do that? We then started knocking out the rest of our van debt, our travel trailer debt, a small credit card, and a personal loan. At that point my husband found a new job five hours away which would really help our cause.

Given our large family and menagerie of animals, we purchased a new home in South Carolina and moved before we put our home in Georgia on the market. Totally not Dave approved, but we didn’t want to separate our family for a time and renting wasn’t a good option for us. Once our home in Georgia sold, we made a profit of around $70,000 after fees. We used $30,000 to pay off the remainder of my student loans, and put $40,000 on the principal of our new home. We purchased it for $255,000 in late 2017. At the time of this writing, we owe $141,397.

Our home is about the same size as the one I purchased in 2004. We did cash flow a garage conversion in 2018 to give us a bit of extra space. It sits on six acres of land. One downfall is it’s distance from my husband’s workplace. Nearly 60 miles! But we’ve made this sacrifice for now as we continue to work on our finances. Frugality has become a way of life for us until we dig ourselves farther out of the hole we are in. We would love to be mortgage free!

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Sick and Tired of Being Sick and Tired – Part 1

Since I just started this new blog, I thought I would share a bit of my background. Growing up, I was not financially literate. At all. While I knew my mother liked to budget and needs always seemed to be met as a child, I was never taught the nuts and bolts of it. My father did spend some time talking about how to use credit cards, but that was about it.

Young and married at 19, I started racking up credit card debt. I thought credit cards were the means to get where you want to be. I became a widow at age 22, and the cards were paid off using money from survivors benefits.

I learned that being in debt wasn’t ideal, but as a single mom to three young children ages 3, 2, and newborn I found myself back there quick, fast, and in a hurry. I remarried at age 24, and finances started looking up.

Then came the market crash of 2008. Our home that we purchased for $150,000? Now worth half of that. We were stuck in a neighborhood where one evening large booms had us scrambling to our window. Low and behold, a SWAT team was standing in our front yard as a meth lab across the street was raided. Yep, this home was purchased by a very under qualified buyer, like the many who caused the recession in the first place.

Our neighborhood was riddled with foreclosures. At this time I was just thankful my husband hadn’t lost his job. Many people we knew had, including both of our parents. This is when I began my Etsy Store making clothing for little girls. Unbelievably, there was still a market for it.

In 2013, we were finally able to get out of our house. We still owed $100,000, and had a contract on it for $120,000. It only appraised for $115,000, so we had to lower the purchase price. We lost so much money on this house, but it could have been much worse. At the time I was desperate to leave our half-vacant neighborhood and felt like our now six children deserved better. It wouldn’t be long before I realized my entitlement mentality was way out of line as we stepped into a house with a $800 utility bill during the summer!

I will be sharing more of our story soon. In the meantime, please take a look at Dave Ramsey’s book, The Total Money Makeover. It gave me hope and a road map to follow in 2016 when I was “sick and tired of being sick and tired.”

Read Part 2 of our story here.

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$1500 Sent to Our Mortgage Principal

On paydays, I usually slip out of bed super early to pay bills. Strange, I know. But it is so satisfying to see our mortgage balance drop! This week I finally read “The Simple Path to Wealth” by JL Collins. It sure is motivating! It was a very easy investment read and with the exception of some language, I totally recommend it!

I’ve gotten into the habit of budgeting bi-weekly instead of monthly. It just makes sense to us, and I tend to save more money when I break our expenses into smaller chunks.

This week was wonderful since the only needs coming out of my husband’s check was violin lessons, gas, and a few extras. At the moment, I’m covering our food costs with funds from my Etsy shop.

Much more will be taken from the next paycheck, like our utility bills. We are currently using our Health Savings Account to pay for orthodontist payments. I don’t consider these payments as debt, instead I see them as paying for a service as we go.

$141,397 left on our mortgage. I am ready for those $130s!

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Welcome to the Blog!

Hello, and welcome to Finance and Frugality. My name is Nicole, and I’m a 38 year old wife and mama to eight children. I started this page for both accountability and to offer encouragement. Our family began the Dave Ramsey plan in November 2016, and have since lowered our debt burden from $293,000 to $141,397. (We are now working on paying off our mortgage!)

To accomplish this goal, we sold our home and moved to a new state. We have drastically cut our lifestyle in the process. Becoming frugal doesn’t have to be painful. It involves analyzing the things that truly bring value to your life, and concentrating on those.

We still follow most of Dave Ramsey’s principles nowadays, but we also have gleaned wisdom from the FIRE (Financial Independence Retire Early) community. We are always learning, and are now absorbing as much as we can about investing while attacking our mortgage. Finances don’t have to be big and scary. Thank you so much for stopping by!

Thanks for joining me!

Good company in a journey makes the way seem shorter. — Izaak Walton