It’s been a year since my husband and I made the tough decision to downsize from our big, beautiful dream home and start over in a smaller, more manageable one.
If you’ve been following my story, you know that a year ago, I had reached my breaking point. I was over $500,000 in debt (including the mortgage) and living paycheck-to-paycheck even though my income puts me in what most would consider the upper-middle class.
After we broke down the numbers and realized how little of a dent we had put into it after 3 years, we knew something had to give. Even though I loved the house we were in, it was waaaaaay too big for just us and it was old and therefore not very energy or cost efficient.
So a year ago, we downsized into a home that was about half the size of our previous one and smack dab in the middle of a subdivision instead of on the private 2 acres in the country. Say goodbye to living the country life, raising chickens for eggs, growing a huge garden, and all of the other dreams I had.
Now that it’s been an entire year, do I regret the decision? Not one bit! While I still miss the good things about the house, I don’t miss the daily stress of busting my budget and fights with my husband about how we were going to stretch the next dollar.
Since we’ve made the move, we have soooo much less in way of bills that I wasn’t even expecting. While I knew the mortgage would be cut in half (It was an instant relief to be $125k less in debt!), we didn’t realize that we’d have enough left over to pay a majority of the credit cards in just a few short months after the move (goodbye, another 30k!)
It doesn’t hurt that it was an energy-star home and saves us a ton on utilities as well! Now that we have the credit cards paid off, we took all those extra savings and were able to roll them all into paying off the significant student loans we had left. In a year, we’ve gone from having $500k in debt to just about $250k, so roughly halfway. Let me repeat, this was accomplished IN A YEAR!!!! I feel friggin FANTASTIC about this!
I know that the majority of it was from dumping half the mortgage and profiting a bit on the sale, but we also paid about $125k off of our loans and no longer have any credit card debt in just that brief period of time. I am excited about what we can accomplish in the coming year. We have started putting almost my entire income towards debt repayment since my husband makes just about enough to cover our household expenses. I have a lofty goal of being completely debt free by the end of 2017. I’m not sure if we will get there, it will be very tight, but I think we can get very close. The loans will definitely be paid and we’ll just have the mortgage which will put us in a great position for the future!
I am so glad we made what seemed like a crazy decision at the time, but our only choice as well. While it was difficult to leave our dream home and all the plans and work we had put into it, it was well worth it. We know never worry about if we’ll have money for any unexpected expenses, and even though we are still budgeting so that we can make our debt-freedom dreams come true, we have plenty of room for a little fun here and there now!
What’s the toughest money-saving decision you’ve had to make?
Excellent story and a great example of how one decision can have significant financial impacts. Just before my wife and I got married – we were living in an apartment at the time – we made a conscious decision to buy just enough house to meet our needs even though we were qualified for substantially more. It was a great decision. The house is the perfect size for just the two of us and we have been able to meet our other financial goals instead of throwing money at a more than necessary, steep mortgage.
SavvyJames recently posted…A Richer Understanding: A Comfortable Nest
Thanks, James! It’s incredible how one seemingly small choice can impact everything else in your life, isn’t it? I most certainly learned the hard way that just because everyone says you can afford it (house, student loans, etc.) doesn’t mean you really should!
” … just because everyone says you can afford it (house, student loans, etc.) doesn’t mean you really should!” Absolutely, my friend. I often say that before you step foot onto a car lot or call a mortgage broker, you should know your own numbers forward and backward. No one knows what you can – and cannot afford – like you.
SavvyJames recently posted…The Business of Family – A SavvyReview and Giveaway
Yes! That’s what got me into trouble the first time but now it’s what’s getting me out!
You have such a great story and I am so glad that you share it with other people. A lot of people would have stayed in that beautiful home to keep up appearances and deal with living financially strapped. It took courage and your courage has helped you get rid of other debts. Keep doing what you’re doing for I really believe you can become debt free next year. Look forward to the celebration. This is awesome!
Petrish @ Debt Free Martini recently posted…In Pursuit of Home Base….The Bad Credit Score Life
Thanks, Petrish! You’ve been so supportive and I really appreciate it!
Good for you! My husband and I are currently living in a small one bedroom apartment so that we can save up for a good down payment when we finally do get a home. It can be a bit tight sometimes, but totally worth it!
Hannah@SeeingtheLovely recently posted…There’s No Place Like Home
Thanks, Hannah! It is definitely worth it!
Wow! Those are some amazing numbers. My husband and I are searching for a home in a cheaper part of the country — possibly smaller than our current home, but that’s doubtful since we’re already pretty tight. However, by moving out of this area we could save some pretty serious money while gaining room for chickens and large gardens (my dream, too!)
Alexandra @ Real Simple Finances recently posted…Financial Success Requires a Network
Sometimes just changing areas lets you get that dream at a much more reasonable price! Hopefully it’ll be yours soon! And as a helpful tip from my short experience with chickens- never, ever get the white ones! They are a predator magnet!
Sometimes I wonder if I should sell my house and move into a different one, but I’ve just about got it how I want it and I don’t really want to sell it now. Sigh! I’m glad it was a good decision for you though 🙂
Kayla @ Shoeaholicnomore recently posted…Financially Savvy Saturdays Ninety Ninth Edition
Thanks, Kayla! You gotta do whatever works for you!
I love smaller homes, not only because they are cheaper, but I also don’t need all of that extra room that bigger houses offer. I like having a small space to myself, and it’s also less upkeeping.
Oh, I agree completely! There’s so much less housework now! Although I must admit the kitchen seems to be instantly dirty due to not having room to hide anything! Ah, well! More reason for me to clean as I go!
Selling the big house on all that land would have been a heartrending decision to make but I bet you slept soundly after making it.
I remember having to make a similar decision after my divorce. We had land that I wanted to build a house on and develop into a series of themed gardens for weddings. In the end, I realised working full-time and raising a child on my own was hard enough without adding all that extra work and expense to my already stressful life – so I sold the land and kept the cottage. That was 13 years ago, I’m still in the cottage and still have a mortgage but I have never regretted that decision. Ever.
I’m confident you wont ever regret yours.
Awesome effort on the debt reduction!
diane @smartmoneysimplelife recently posted…How to Grow Your Own Food, Even If You Live in an Apartment
Thanks, Diane! That sounds like a tough decision as well, what with the potential income versus gaining real income more quickly. I’m glad that it worked out for you as well!
IMO it is easier to make big decisions to save lots of money than it is to make lots of little decisions to save a little money at a time. Because my cars are old and my house is less than I can afford, I don’t have to worry about the budget if we want to go out to eat, or if I want new clothes or…
RAnn recently posted…New Financial Products: Loyal3
That’s one way to look at it. If you can make the little decisions, you may never have to make the big ones. If you do both in living below your means and budget, you can achieve any financial goal you set your mind to!
Congrats! That’s such a huge decision to make, but I’m glad it’s paying off so well for you!!
Mel @ brokeGIRLrich recently posted…Financially Savvy Saturdays #99
Thanks, Mel!
It sounds like you made a great decision! We actually just moved into a smaller house and though I miss the closets, I love not having so much to clean!
Thanks so much for sharing your story at Share The Wealth Sunday!
xoxo
Lisa
Lisa @ Fun Money Mom recently posted…Share The Wealth Sunday Blog Hop #14
We are planning to pay off our mortgage on our starter home (almost done and wrote a $25,000 check this week), then move into a smaller apartment to save up for a house closer to the kids’ school. We are on a similar path as you and I think we will reach our goal in 2017, too!
Kristy as Giftie Etcetera recently posted…The Secret to Creating a Practical and Pretty Planner
That’s awesome, Kristy! Hope you are able to meet that amazing goal as planned!
That’s a huge reduction in debt! Congrats on that!
Stephen recently posted…Do you want to spend time in Hanoi Vietnam?
Thanks, Stephen!
Wow – very impressive financial (and lifestyle) feat. Thanks for linking up to the Blogger Brags link party. I have pinned your post to the Blogger Brags pinterest board.
Sarah recently posted…PEI: Pottery and Antiques and Artisans – Oh my!
Thanks, Sarah!