In my most recent coaching session (yes, I have a coach—actually two coaches: one for personal wellness and one for becoming a better coach), my coach asked “what does your ideal life look like?”
How often do you get to think about—or, more importantly—talk about that?
I clearly do think about it, because I didn’t miss a beat before answering that in my super ideal world I would write in the morning, see health coaching clients in the afternoon, and, on occasion, give talks and presentations. (And of course do “healthy things” like move my body, be in nature, nurture relationships, sing every day, etc., but I include that by default.)
“So what is standing in your way?” she asked.
“Well, primarily paying off the mortgage.” (And isn’t that true for so many of us?)
We Need a Home
We (my husband, daughter, and I) made a decision in 2011 to buy a fairly nice, newish house within walking distance of downtown Decorah. Why?
- We view homeownership as an investment.
- We wanted to have a home where we could welcome entire classes of students and have family members come stay.
- We wanted a low-maintenance house.
- We wanted to be able to walk everywhere.
- It felt like the house was designed for us!
(As an added bonus, we ended up with kick-ass neighbors who ended up introducing us to many of our dear friends.)
We don’t regret buying the house.
At the same time, it’s fun to play around with mortgage calculators and think of ways to pay that mortgage off as quickly as possible—for more freedom. And this is when we must to ask the question: what do we really need?
What We Really Need
Beyond our house and related utility services, we need enough healthy food to keep us going (this means eating when hungry and stopping when satisfied) and clean water. Other than that, we don’t really need much. We have all the clothes we need (although, I’m sure my 16-year-old would disagree). Since we’re all runners, we need new running shoes and socks every now and then. We need basic hygiene products such as shampoo, soap, and detergent. We need toilet paper (although some people go without). We don’t really need Internet and Netflix (but we do). We need a car to get out of Decorah on occasion. We need our dog, Sophie, because she’s awesome. We need to give some money to others, because it’s the right thing to do. We need to save a little money for a rainy day. But that’s it!
So where does the money go? According to mint.com (best. service. ever.), here’s the breakdown:
- Home (31%)
- Food (18%)
- Education (8%) – That would be my health coaching program.
- Bills/Utilities (6%)
- Travel (6%) – My family is in Sweden…
- Gifts & Donations (6%)
- Business Services (4%) – Mostly deductible.
- Health & Fitness (4%)
- Life Insurance (3%)
- Auto (3%)
- Other (10%) – That would be all shopping, personal care, pet care, school fees, entertainment, etc.
Where to Cut Spending
So we spend more than the average American family on food (probably because mostly organic, local). We could probably cut down on that a bit. For example, we could eat only when we’re hungry. I’ve been experimenting with this for the last couple of days (easy when you’re home sick in bed), and it’s amazing how much less food I actually need.
We could cut down on travel. We don’t have to go to Sweden every year. Every other year would be sufficient. We can combine pleasure travel with business travel, like this Thanksgiving when Todd’s trip will be paid for when we visit family in Washington D.C. We can staycation.
I need to reinforce my rule that I can’t buy new books unless I’ve read the ones I have. And borrow instead of buy.
Do we really need that much life insurance? Probably not. Time for another chat with the financial advisor…
I must remember to keep my car in the garage. Gas is expensive and biking/walking is so much better (and more fun!). And that’s one of the reasons we bought this house anyway—so we wouldn’t have to use our cars very much! And when our daughter goes off to college, we will most likely get rid of one of the cars. That will save significant $.
Paying Off the Mortgage = Freedom!
Let’s say we could save $500/month by being extremely mindful of our spending, especially related to food, travel, and shopping, and put that toward paying off the principal on our loan. Guess how much faster we could pay off our mortgage? Almost five years faster. That’s just eight years from now!
I really like the mortgage calculator at daveramsey.com. If you have a mortgage, I encourage you to go there, plug your numbers in and see how much quicker you could pay off your mortgage if you added a little extra each month. It even includes a set of things you can give up (like coffee and pizza) and how much that would save you if you put that money toward paying off your mortgage.
Think about what you really need and try to eliminate the rest. It’s better for the environment, better for your health, and the promise of freedom is a good motivator.
We can do it! Because all we really need is love. (I think somebody famous said that.)