Those paying extra on their mortgage and choosing to live lean to do so . . .

[rafiki]

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[jld]

Well, my parents were born in 1922 and 1925, and I was born in 1970. My parents were the age of my friends' grandparents, and had the values of their Depression generation, not the values of the boomers. My parents were strict in many ways, and not running balances on credit cards was one of them.

 

My mom always scouted the dented can racks, bought the produce that was on special, and almost only shopped garage sales. I really didn't want to live that way when I grew up. I still don't.

 

Dh and I lived simply and somewhat frugally when we were younger (mid-20s to mid-30s), but the older I get the more I am spending on unnecessary but fun items, like Legos and Playmobil, new books and other things. I probably shouldn't, but that's how I'm coping with life abroad, I think.

 

I'm glad we were thriftier when we were younger and had fewer kids. It makes it easier for us to be looser now.

[vonfirmath]

It is up to you and your husband to determine your family's priorities.

 

But there is a LOT of freedom in living debt free. It allows more doors and options to open up that would not otherwise be available if you don't dare risk quitting a job for fear of being unable to pay the debt bills.

 

I am glad I did not have to wait for my kids to grow up to move back to be closer to family. We had the freedom to quit a job in Washington state and move to Texas without a job because we were debt free, causing our expenses while looking for a job to be low enough to be absorbed by our savings. We were also blessed in finding a job relatively rapidly after we moved.

 

I do not feel our son has missed out on anything important because we got lean and paid off our debts while he was still young.

 

I did not grow up having a lot--most of what I had was used/made by my dad (the main sewer in the family)/and such. But we did have our yearly family vacation when we went back to see family every year and I guess that affected me wanting to move back to be close enough to see family regularly, yes. My parents -- were neither frugal nor spendthrifts. Or rather, they were frugal of necessity. To have the vacation, keep cars running, keep food on the table, and have my mother be home when we were out of school, they went to great lengths to pinch every penny. They put Christmas on a credit card then paid it off with H&R Block work during the next tax season, etc.

 

OTOH, once us kids were out of the house, my dad went a bit wild with money and it almost broke the marriage until they came up with arrangements they could both live with.

 

I can only imagine how much more freedom there would be not to have a $600-$900 rent payment every month. More money to give away, to go into special programs, vacations, and college help.

[LibraryLover]

Oh, we are not the people to ask. We are always paying out on 'experiences'; education as well as interests and passions.(Although I am a rather frugal person). Decent monthly payments towards principle is all I am after at this point.

Edited August 12, 2010 by LibraryLover

[NoPlaceLikeHome]

I can see paying off a house early but not before we have emergency savings for at least a year plus savings the max for retirement and college. Therefore I see it as a hard thing to do. I have heard if you make one extra payment a year it shaves about 10 years off the mortgage though but we are not in a position to do so yet.

[s.z.ichigo]

We don't have a mortgage yet, but when we do we will definitely be paying it as quickly as possible. My husband is already 43 (I'm 30) and he doesn't want to work till he's 150 to pay off a house.

We already live incredibly frugally in MOST respects. We go out to eat far too often, but in everything else we go as cheap as possible. We don't buy used clothes, but everything we buy is almost always discounted or clearance. We buy produce from a produce store that is about half of what grocery stores are. Every other type of food we buy is always what's on sale.

In addition, we are always recycling and repurposing. We recently built a chicken coop with a run, AND a pen for a rabbit and turkey (they're friends) for about $40 using salvaged materials and outgrown playthings (buying only chicken wire and hardware). We hope to slowly move toward self-sufficiency, keeping our expenses extremely low.

 

Both my husband and I grew up with little money, so neither of us have very extravagant tastes.

[hillfarm]

I grew up on a small farm and my parents did not have a lot of money. However, my db and I never knew we were poor. We had every luxury a kid could want--ample space to run, play and explore, friends, loving family and relatives. I remember my childhood as a joyous time.

 

As a teen, I began to become more money/status conscious and grew somewhat weary of always having to buy the used or bargain version of things. Just once, I remember longing, I would have liked to be able to go out and spend an outrageous amount of money and buy something new and trendy, top of the line.

 

Now, as an adult, I would like to think that I am able to blend the two extremes. We live in a rural area, within 5 miles of the poorest county in our state. Dh has a good job but the pay is not high. I do what I can to bring in a little income on the side but am first and foremost a SAHM who homeschools.

 

I try to blend frugality with the occasional splurge that makes our spirits soar. For example, we wear mostly used clothing. However once or twice a year we splurge on a great whitewater rafting trip. We are considering saving up to buy a new-to-us camper and truck to pull it. Although I'm sure we could go into debt and buy a brand new, top of the line one, I know that I would not enjoy it as much if I felt it was overpriced and that the payments would be a burden. I try to find that fine line between responsible frugality and frivolous waste. I want to be a good steward of our money but at the same time I want to have a little fun with life. The occasional splurge in keeping with my financial sensibilities while living frugally the rest of the time has worked out quite comfortably for us.

 

We have no debt except for a small amount remaining on the mortgage. We have discussed paying it off, but decided that we would rather have an enjoyable (not excessive) quality of life than the peace of mind of owning the house free and clear. I considered refinancing the mortgage but the lenders told me that the amount was so small that it would cost us more to refinance than to just continue at our current rate. We do have the option of selling off some land to cover the mortgage if we did get in a tight financial spot.

[Jennifer in MI]

I grew up in a family that didnt have much money, but I didn't know it! My parents were SO creative!! But, they also didn't share any of their financial situation with us, so each of my siblings has had to learn about savings/debt, etc on our own.

 

We didn't own a home until about 10 years ago. We bought a TINY house in a decent neighborhood. We paid off a LOT on that house, only to have the economy go bust. We were lucky to sell it for what we owed. I wish we hadn't tried to put so much more toward the mortgage!

 

That neighborhood started to go downhill and the house was getting too small for our family, so we moved up. We don't own a mansion or anything, but because we hadn't made any money on the first house, we were starting over. I'm now a bit gun-shy about putting extra into the mortgage!!

 

We are also debt free (except for the mortgage). We have fully funded retirement accounts, life insurance, college funds, plus living expenses for a year.

 

We've decided to put more of our money toward experiences with the kids. We've travelled extensively and plan to continue. At this rate, our mortgage will be paid off in 12 years and I'm good with that. Dh won't have retired yet, and I may be working by then. We should be rolling in it then!! LOL It's all about a balance, I think!

[KS_]

I can see paying off a house early but not before we have emergency savings for at least a year plus savings the max for retirement and college. Therefore I see it as a hard thing to do. I have heard if you make one extra payment a year it shaves about 10 years off the mortgage though but we are not in a position to do so yet.

 

This is where I'm at. . .we have a smaller emergency fund (probably a couple months' worth), but only contribute a *small* amount towards retirement, and nothing towards the kids' college. With the increase in insurance costs and other expenses, it would really be tough to be paying down our mortgage at this point. We are in the process of refinancing, which will lower our monthly payment, but puts us back at a 30 yr mortgage (up from 25). We looked into going to a 15 year with an even lower interest rate, but it would have been $150 more a month and I don't know where we'd pull that money from (without dropping cable, internet, and something else - homeschooling, getting rid of the cat. . .).

 

Dh grew up poor with a mom who didn't spend wisely and was off and on welfare. All his clothes came from the thrift store or garage sales, and his toys, bike, etc., and he does not want that for his kids. We don't do anything extravagantly - I buy clothing on sale, off season, we don't eat out often, this will be the first year in 9 years we've taken more than a 2-day vacation. But dh doesn't want a lifestyle any way similar to what he had growing up, and would like to be able to do more things that we don't have the money for.

Edited August 12, 2010 by KH_

[nrg]

We paid off our home in 8 years. We took an adjustable rate mortgage and overpaid each month. As the payment decreased because we were paying down the principle faster, we kept our payment amount the same. To do so we purchased a home below our means in order to increase our payment. We also lived frugally. Some of our friends criticized our old cars and simple ways, but we have been about what we DO, not what we have. Financial decisions are values decisions. We support music lessons but not car payments, camping but not hotels, family projects and fun activities that are free but not expensive theme parks and movies. Instead of thinking about what we could have we started thinking about having nothing. One of my favorite stories is about how the kindergarten parents gathered to ask me where I bought my son's clothes as he always looked so nice. I had bought everything at yard sales from the beginning, with a 50 cent limit per item! Life is good. Stuff is stuff.

[Renee in NC]

We didn't own a home until about 10 years ago. We bought a TINY house in a decent neighborhood. We paid off a LOT on that house, only to have the economy go bust. We were lucky to sell it for what we owed. I wish we hadn't tried to put so much more toward the mortgage!

 

That neighborhood started to go downhill and the house was getting too small for our family, so we moved up. We don't own a mansion or anything, but because we hadn't made any money on the first house, we were starting over. I'm now a bit gun-shy about putting extra into the mortgage!!

 

 

If you hand't paid extra on the mortgage, though, you either would still be in that house or would have had to default on your mortgage (short sale.) I am assuming, of course, that you couldn't have paid thousands at closing to get out from under it.

[WeeBeaks]

I'm curious if your parents were careless spenders, are you more frugal because of that? Or did you carry on the frugal tradition?

 

This. I grew up living with relatives, not my parents, but those relatives had very bad financial problems. They have now declared bankruptcy x2. So my situation as a child was very very unstable. As an adult, I crave security (financial and otherwise) more than my DH, who had a very stable childhood.

 

We are on Dave's step 6 too - paying off mortgage (at the same time as continuing retirement savings and college savings).

[Irene Lynn]

I grew up lean, very lean. My parents did not have a budget, but they did live frugally. Their "budget" was: Is this essential?, and Do we have the money available after the bills are paid? Most things were not essential. I am thankful for their example and awareness of the things that cost. I did not like it at the time, but I now realize that we lived how we did because they were so careful. They never bought anything on credit, because they always said, "If you can't afford the item, then you can't afford to pay even more for it." They inherited some money after my grandfather died and they used that to purchase a house. They refused to pay a penny more than that amount and let me tell you, they were sorely tempted. Amazingly, the price of their desired house came down and down and down, until it was the price they could afford. That was in the early 70's, right before housing prices rose dramatically. I am just saying we had food(We never bought chips or candy and several food items were strictly rationed.), and clothes (never new, except for underwear.), and decent housing, but not many extras at all. We did manage to take piano lessons and summer swimming lessons, but I was not allowed to be in girl scouts or 4-H or anything like that, because "It would cost too much." We had to justify a drive across our small town, because of the cost of gas. Anyway, you get the point.

 

Fast forward to the start of our married life. We lived in the most inexpensive place we could find. We had next to no assets. We had a budget from the very beginning and took our calculator to the grocery store. We never looked at what we couldn't have, but used our budget to see how long we would have to wait to get whatever item we were thinking about. I don't like to "settle" for things and I can delay gratification for a long time, if I know something can happen. Anyway, we lived in a lovely hovel and made it better and saved as much money as we could, so we would have a 20% downpayment for a house. We live in an area with low cost housing. Once we bought our first house, we paid down heavily that first year. We did not have children right away, so all of this was before children. After that first year of home ownership, we still paid extra, but now we had a child. Oh, we also looked for a house that was under what we could afford, so we could pay extra. In other words, the extra payment was figured into our budget from the very beginning. Once we paid that house off, we stayed there a couple of years, then felt it was the right time to move to a new area. Right now we are working to pay off this house and will before too long. Our income has slowly improved through the years and we are not tight at this time, but even in the leaner years, we chose to live in a smaller house, so we could still LIVE. We could take a family trip or get a candy bar or have a museum membership or ...

 

We did choose from the very beginning to live like "no other" (or at least live with less than our friends were choosing.) so that in time we could really loosen our belts and live more freely than we ever could if we had not made our earlier choices.

 

If our income had not grown through the years as much as it has, we would still have made a priority to pay extra on the house. It might not have been much, but we would have done a little. It can save thousands of dollars.

[cmarango]

I did not grow up frugally and neither did my dh. We do not hesitate spending money when we can decide what to spend it on. I have found that if you do not visit stores then you tend not to spend money. Neither of us particularly enjoys shopping and our main hobby (skydiving) earns us quite a bit of money since we are both instructors.

[Night Elf]

I'm curious if your parents were careless spenders, are you more frugal because of that? Or did you carry on the frugal tradition?

 

My mom was frugal out of necessity. She was a single-working mother making $4.00/hr. She had to work overtime every week just to make ends meet. I didn't even notice when I was a teenager. I grew up in an extended family without college educations, just working regular jobs. No job = no money. My dad tried to help but he had major issues as well.

 

I'm thankful I don't live that way. My DH makes a very good salary. I wouldn't say I'm a careless spender. We use everything we buy, with the exception of curriculum which I have always resold to recoup some costs. My children seem to be better spenders than me though. They save their money for something good. I've been known to borrow money from dd12. :)

 

Dd18 only knows what I've told her about Dave Ramsey and she's decided that's the way to live. She doesn't want credit cards, which my DH feels she needs to establish credit. (Yes, that's a debate I don't care to get into.) She is determined to stay away from loans. She saved cash and we matched it for a car. She works and pays for nearly everything she wants/needs. Her dad and stepmom are quite annoyed that she refuses to get student loans to go to school. She'd rather work her way through school and they told her she was being stupid because no one did that and she would never get ahead. I'm fairly certain those two are in debt up the wazoo and feel it's the American Way. Incidentally, my mom feels that way. When I talked to her about it, she said life is too short to feel 'want' all the time. She doesn't care that she's in debt. It's quite bizarre to me, really.

[Mejane]

We are much better off financially than either set of parents were, but their lessons have stuck with us. We are much more frugal than most of our friends, and we have the savings and equity to show for it.