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First, I want to start off we paid off our home, which we do not live the traditional lifestyle most American live. I fully believe that a home is where you make it. A home is something that keeps a roof over your head, food is served, and warmth is all around you with love. We live tiny in a 32 foot Thor Four Winds RV. We bought the RV for $47,000 and the loan we took out was for $50,000 in March 2019 and paid it off 100% by May 2021. Our income was under six figures as I was a stay at home mom, but this really doesn’t matter because we made the biggest dent in our loan when we made under six figures than we did when both my husband and I were working and we were making well over six figures. So if you are on the edge of should I pay off my home fast even though I “don’t make a lot of money” yes, why yes you should! You then have so much freedom with what you can do with your money. You can save it. You can give it. You can spend it. You can invest it. It is amazing!
We recorded every single month what our Net Worth was and this always encouraged us to pay off more. I find it was my job as a stay at home mom to find ways that we could cut costs and pay off our home even faster. When we hit a number like $23,117, we would put an extra $120 dollars towards our debt because it would make use under $23,000 and get us to only $22,000! I did this a lot you guys because our payment was $737, so it was easy when we stayed under budget in other areas of our budget to add a little extra to it.
Yearly Bullet Budget Journal
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Yes, we did the old fashion budget every single month. We did not just write a budget and hope we made it. We would budget 3 times a month. What? Really? Yes! We would write our first budget at the beginning of the month to discuss things we wanted to do that month such as traveling, date nights, and fun money. Then middle of the month, I would track all of our spending to see where we were at in our budget and if I needed to adjust or change anything. Which most of the time, we had to do this because life happens and things come up. Hello, when we just fixed our windshield of our car, and then we had another huge crack in the new windshield in the same month! No, our insurance did not cover it because our deductible is high to make it a better price for us every six months. Then at the end of the month, any left over money would go straight to pay off more of our home the next month.
Total 2019 payments: $11,778.79 (This is when we were making well over six figures)
January 2020: $737.40 (Stayed at home mom started and lived off of one income)
February 2020: $737.40
March 2020: $737.40
April 2020: $5,737.30
May 2020: $737.40
June 2020: $3,637.40 (This is when we sat down and really said let’s pay this off next year lets raise our minimum automatic payment next month!)
July 2020: $1,150
August 2020: $1,150
September 2020: $1,150
October 2020: $1,150
November 2020: $1,150
December 2020: $2,150
Total 2020 $20,244
Here is our 2021 payments for our home:
January 2021: $2,150
February 2021: $1,650
March 2021: $10,300
April 2021: $7,350
Total of $26,416.07
Our total interest on the RV was $8,438 and we paid it off 2 years and 2 months early too! Think about how much we would have paid on interest if we would have just let our normal automatic payments go through. This saved a lot of money plus this is how we were able to go travel full-time because we did not have any payments over our head.
As mentioned in point two when we budget, we track our spending. Our main focus in 2019 was paying cash for a wedding and then came Ember in early 2020. So then our focus was saving up for Ember to have her without any hospital bills. Our 2021 goal was to pay off our our home. We successfully have had a great 3 years of accomplishing goals with this tip! I highly suggest it if you do not do it.
Hello meal planning! Yes, we meal planned like a champ! This is when meal planning 101 came to Believe and Budget. We had to figure out a way to use what we already had in our cupboards and use them with purpose for our meals each week. We had to figure out a way to have an empty refrigerator when we went food shopping each week. We had to almost become a no waste household. We spend less now on a family of 3 then I did by myself when I was single. Wooh really? Yes! I tracked my expenses for awhile now you guys. I did not really mind spending a lot of money on food when I was by myself because one I was always on the run and I did not want to cook a meal for myself to have left overs to just throw out. Luckily, with meal planning with a family of 3 we always eat our left overs and we always cook delicious meals every week! If you are really trying to reach a financial goal then I would tell you to go to this next!
Meal Planning 101
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We asked our landlord if we would be able to work around the property to reduce our utility bill to zero dollars in our budget. This helped us so much and really made us think about work camping at other parks. We did not start reducing our rent though until after we paid off our home 100%
With these 5 tips, tracking our net worth, budgeting, tracking our spending, reducing our food budget and our utilities is really how we paid off our home so quickly. Plus we lived in a home that we could afford. Yes, we could have afforded a $200,000 home, but that was not our goal. We did not know where we really wanted to put down roots. We did not know if we were going to stay in Richmond, Virginia for 5 or more years. We wanted to travel. We wanted to see the country and go to all the states. We wanted to retire in our 30’s rather than waiting to retire when we could not go on all the trails and ride bikes and enjoy the beauty of all the parks.
Stay tuned though, our next goal is to pay cash for a house and rent out our current home to someone who wants to live tiny next.
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