Frugal Series, Part 5: Getting Debt Free & Car

I just want to clarify this, we are currently NOT debt free and we may never be. It is a goal we have, though. It seems reachable at times... other times... not so much. The only thing we have financed right now is our home and we have had our mortgage for eight years. It is set up for 30 years and we have it down to approximately ten more years with our current amount we choose to pay (that would be a total of 18 years). So, we have it paid down to almost HALF the original term of the loan. That is a huge accomplishment; however, I think if we pay a yearly lump sum (portion of income tax return) we might get it paid off in three years (that would bring it down to a total of 11 years).

Why is this so important? If you don't understand mortgages an interest, then NOW is the time to start! You NEED to acqaint yourself with the massive amount of money you are GIVING AWAY! In Part 1 of this series I told you we only financed ...hmmm... I might have told you wrong.. I am thinking now it was $48, 000. Either way, if we pay out for the full 30 years we would have paid $112,078.80 and that is $64, 078.80 in INTEREST!! That's way more than the amount of the loan.

Here's the thing about getting completely debt free.... If we pay this house off in three years, then it is going to be just in time for a couple of things. One is inevitable and thanks to two hurricanes in a 3 year span it will probably need to be done sooner.... roof replacement. The second is the A/C systems in this home are reaching the end of their life expectancy (although, we are having no problems currently). And the other big thing is my husband's car... it is about to turn 20. Yep, 20 years old!!!! Granted it is a nice car and he only drives about one mile round trip to work it is not going to last forever.

Okay, more about the car because I am sure you are all feeling sorry for my husband now. Don't.... Well, you can a little... ideally he would like to have a Jeep, but I roll my eyes due to the fact that he couldn't even fit us all in it with him! So, what does that say... hmmm... does that mean he wants to be alone... not a chance of that!! He should have lived that fantasy life with the Jeep before this one! LOL!! Okay, about the car. In the time I've known him (age 19-37) he has had a Astro Van (given by parents), Nissan Sentra (purchased 2nd-hand by parents), Saturn (purchased by us new), small Ram truck (purchased by us 2nd-hand as a 2nd hauling vehicle because having two vehicles for him was still way cheaper than a big truck), and the Nissan Maxima (1990, given by my parents). Nothing was wrong with the Saturn, but the Maxima was more of a luxury car and my parents were going to sell it until they realized we wanted it. Seriously, at 15 years old the car was like new with ridiculously low mileage. We no longer needed the truck, so we sold the truck and the Saturn and he still has the Maxima. I drive my 2002 Toyota Sienna Van and both vehicles are paid for.