Pay your mortgage off early….on ONE income!

MORTGAGE.  One word included in many household conversations.  The mention of this sometimes unavoidable financial responsibility makes people cringe.  Paying off your home loan is a homeowners dream.  There’s no better feeling than walking through the front door of an OWNED home.  It’s mine….finally!  The process of paying off your home can be a long and stressful period….even for the most financially stable household.  How can you possibly live on one income and pay your mortgage off early?  I’m a new homeowner living on one income and this is my strategy for eliminating my monthly mortgage burden.

1.)  Buy What You Can Afford

Buying a home is one of the biggest financial decisions individuals will make during their lifetime.  It takes careful planning and negotiating.  Your future goal is to pay off your mortgage; therefore, buy a home within or under your price-range.  Buy what you can afford!  It’s easy to lose focus when buying your dream home.  With so many homes on the market, it’s tempting to buy a home out of your budget.  After all, the mortgage would only be an extra $200 a month!  Don’t do it!  Buying more house than you can afford is decreasing your chances of PAYING your mortgage….forget paying it off early. My husband and I qualified for homes double our price range, but we knew our budget and what we could comfortably afford.  The amount of home you qualify for and can afford are drastically different.  Have a grasp on your monthly expenses before attempting the housing market.

2.)  Down Payment

You’ve now entered the housing market and hunt.  Homes have different financing options….which one do you choose?  Many will argue that the best way to create instant equity in a home is invest a minimum 20% down payment.  I agree.  It will decrease your monthly mortgage payment, eliminate the need for PMI insurance, and create equity.  It’s an excellent way to jumpstart your early mortgage payoff.  However, if a down payment is impossible, search for a zero down payment mortgage option.  Invest in sweat equity instead of instant equity.  With no down payment try to come in under budget when house hunting.  The saved funds can be used for future mortgage payments.

3.)  Eliminate Revolving Debt

Try to eliminate most of your revolving debt before tackling early mortgage payoff.  Credit cards, personal loans, car payments all contribute to revolving debt.  Decreasing or eliminating these amounts will make extra cash readily available for future mortgage payments.  I understand that some revolving debt is unavoidable, ie. car payments.  However, constant debt will hinder your mortgage progress.

4.)  Open A Mortgage-Only Bank Account

I chose to open a bank account that is dedicated solely to our mortgage.  Money is transferred into this account on a weekly basis according to our budget.  Our mortgage payment is readily available and temptation spending is eliminated.  Any extra money saved from our weekly budget is transferred directly into the mortgage fund.

5.)  Pay Extra Principle

You have a house you can comfortably afford, debt is at the bare minimum, and a mortgage fund has been established….let’s strategize and pay the mortgage off early.  Where is the extra cash coming from?  Your household budget!  You budgeted $1600/month for your mortgage, but actually pay $1500/month….$100 into the mortgage fund.  You allowed $200/month for utilities, but only paid $150 this month….$50 dollars into the mortgage fund.  The weekly grocery bill was under budget and you saved $15….mortgage fund!  At the end of one month, total your savings and contributions to the mortgage fund.  Apply that amount as extra PRINCIPLE on your mortgage payment.  It all adds up!

6.)  Amortization Schedule Calculator 

Still not convinced you can pay your mortgage off early on one income?  Find an online amortization schedule calculator and calculate your mortgage schedule for your existing loan.  Then, do the same calculation with an extra monthly principle payment of $100.  The interest saved will be incentive to start building that mortgage fund!  Right now, my husband and I are paying an extra $250/month toward the principle of our mortgage payment.  It doesn’t sound groundbreaking, but that small amount will enable us to pay our mortgage off  10 years earlier and save over $57,000 in interest!  Our goal is to OWN our home in about 7 years.  It’s going to require some creative money management, but the reward is worth the challenge!

Hopefully I’ve offered some encouragement to single income homeowners.  A 30 year mortgage doesn’t have to last 30 YEARS!  After relieving yourself of unnecessary debt, tackle your monthly mortgage payment.  Save and contribute as much as possible to the principle amount.  If not monthly, then every other month.  Use an online amortization schedule calculator and understand the long-term effects of additional payments.  Paying off a mortgage early with only one income can be accomplished….convince yourself of the benefits.  Do you have any mortgage payment tips for single income households?  Leave them in a comment.  Was this post helpful?  Let me know!  Take care and good luck!

What? Only one income?

Having children, becoming a caregiver, health concerns, or divorce are scenarios that attribute to a single income household.  How can you survive with limited resources?  Divide your life into two categories….necessary and unnecessary.  List everything that is either necessary or unnecessary to live.  Put monetary values on your necessary items. The total of these items becomes your family budget.  Now you have a starting point for living on one income!  Budgeting household expenses is vital in a limited income household.  Every dollar should have a purpose.  From food, electric, and gas to clothing, coffee, and Chinese takeout…each dollar is budgeted!  You’re reading this article because you’re preparing for the financial struggles of living on one income.  It’s difficult and stressful, but doable.  With the correct strategy and mindset, it can be achieved.

1.)  Learn To Cook

Yes….learn to cook!  Once you choose to live on one income, eating out becomes a luxury and falls into the unnecessary category.  Besides, home cooked meals are more tasty! Shop sale ads from your local grocery stores and make an itemized list.  This helps avoid impulse shopping and keeps you on budget!  Buy off-brand or bulk products when it’s more cost-effective.  Shop weekly instead of daily.  Your bank account will thank you!

2.)  Brown-Bag It

Whichever spouse is earning the income should consider brown-bagging it!  My husband and I save $100 a week using this concept.  One of the perks of home cooking is LEFTOVERS.  They make GREAT next-day lunches!

3.)  No Credit Cards

Credits cards are tempting.  And yes, I do have one for emergencies.  But, credit card debt is not welcome in a single income household.  You’re budgeting on necessities, not debt!  Charge now and pay later is a poor strategy when budgeting household expenses.

4.)  Negotiate Necessary Bills

Car and health insurance, electric and phone bills are necessities.  But, all provider companies are not created equal.  Contact your current providers and negotiate lower bills.  Current provider won’t negotiate? Shop around and find a more reasonable rate.

5.)  Try To Save….a little

Living on a single income tests your creative money management skills.  However, be sure to include an emergency savings fund in your budget.  Life has unexpected twists, so be prepared for those obstacles!

6.)  Have The Right Mindset

Be content with your future lifestyle before attempting a single income life.  Are you convinced that the rewards outweigh the struggles?  Can you give up your daily Starbucks coffee and night on the town to stay home with your children or care for your mother?  Are you willing to overlook that new car for a simple vacation?  You should be convinced of your answers before considering a limited income household.

My husband and I have successfully lived on one income for 11 years.  We live a simple and fulfilled life.  It’s not always easy, but definitely worthwhile!  As you adapt to your new lifestyle, you’ll create and utilize your own strategy for smart budgeting.  Add your money-saving tips by leaving a comment!  Thank you for reading!  Take care!

How to live on ONE income and still have a life!

Being a full-time caregiver was a very rewarding experience.  With that experience came sacrifice and creative budget management.  My caregiving journey has ended, but those acquired money management skills still resonate in my current lifestyle.  My husband and I currently live on one income.  We’ve had the opportunity to buy a house, travel, and raise two dogs.  How do we do it?  Let me explain!

I used my spare time while caregiving to develop my DIY skills.  Being handy around the house can be very budget friendly.  Since my husband was working, anything that needed to be fixed became my responsibility.  The sink leak that left our kitchen flooded couldn’t wait until the hubby got home from work!  Or, the washing machine hose that flew off and flooded the utility room!  Nope, that couldn’t wait either.  I decided learn handy skills and become a Mrs. Fix-It.  I wasn’t aware my self-taught skills would develop into a HUGE money-saver.  From house painting and floor installation to shutter and deck building….I learned to do them all.  The money we saved on these necessary homeowner projects was a pretty good sum.

When my caregiving duties had ended, my husband and I decided a change in scenery was needed.  Thus began the house hunt!  Buying a home isn’t easy and there are many options on the market.  But, stick to what you can afford!  We looked at beautiful homes, but realistically they were not in our budget.  Our magic number for a monthly mortgage was $1500….including taxes and insurance.  This number narrowed the playing field quite a bit, but nice homes were available on this budget.  We wanted a modest 3 bedroom, 2 bathroom home with a basement on about an acre of land.  It took a few months of looking, but we found a nice home and location.  The catch?  It needed to be painted, new carpet in the basement….cosmetic updates.  My husband and I knew the updates and repairs were easy fixes, so we made an offer and three months later moved in!  We came in under budget on our mortgage….$1420!  Buy what you can afford!

Ok, we bought a house!  But, we’re not spending ALL of our time here, right?  The hubby wanted a travel via travel trailer and explore some of the states during his vacation time.  It wasn’t in our budget for a brand new one, but used RV’s can be a very affordable option. We found a travel trailer for sale by a private owner about 30 miles from our home.  The seller was the 2nd owner and it was very well-kept.  Again it wasn’t new, but we bought it for $4000!  We have explored 10 states so far!  Staying nightly in your travel trailer is approximately one-quarter to one-third the cost of staying in a hotel.  Huge savings!  While not lavish vacations, we enjoy the exploration.

I mentioned we currently have two pups.  We had three, but unfortunately one passed away 6 months ago.  I miss him dearly!  How do you save money with these wide-eye lushes?  PET INSURANCE!  Yes, pets become sick and need medical assistance just like humans.  We invested in health insurance and were very pleased with the results.  When my oldest pup was diagnosed with cancer the vet bills were excessive.  They totaled approximately $4000-$5000 in just a few months.  It may not seem like a lot to some, but it was to us.  However, with our insurance we were reimbursed 90% after the $250 deductible was met.  Yes, pet insurance is a good investment!

Most people are very aware of their household expenses budget, so I don’t like to dwell on the topic.  But, if you want to save a little more cash try buying off-brand products, making your own cleaning detergents, baking some homemade dog biscuits, growing your own produce in the warmer months, eating in instead of out, or set a holiday budget for gift buying.  My husband was astonished that we could actually own a home and have a life on only one income.  We’re not rich and famous, but we’re happy!  Living on one income is definitely doable, so do it!  Let me know other ways to successfully live on one income by leaving a comment!  Thank you for reading!