How we did it...

Since Audrie wanted to know how we payed off our house, I'll try to lay it all out. However, I really can't do better than recommend the book The Total Money Makeover by Dave Ramsey. More or less, his plan is exactly what we did. When we started, we had never heard of him, but we still did pretty much what he recommends. Towards the end,

Before I start explaining what we did, I just have to point out that we have been very blessed financially. Norm makes a very good salary and has never been out of work so far since leaving college. We are well aware that Heavenly Father has blessed us, and we try not to take that for granted. I do feel that by being good stewards over what He has given us, we are keeping the faith with Him, but I am well aware that finances are often much harder for others than they've been for us, even though others are doing everything they can to handle their money well. In fact, that applies to my own parents who have always worked hard and made their money stretch as far as possible. I hope I don't sound holier-than-thou about this whole thing. I'm just so dang excited about it!

I know it sounds like we payed off our house very quickly, and we did, but maybe not as quickly as it sounds. It all actually started before we ever even thought about moving here. Back in 1999, we decided to get out of debt. At that time, we had credit card debt, a car payment and student loans. We had been out of school for a couple of years, but hadn't really made any progress with any of that. We became really determined and did something we had never done before: we made a written budget! We then got rid of every expense possible and used all the extra to begin our "debt snowball." That is, we listed our debts smallest to largest. We then used any extra money we had to pay on the smallest debt. Once that was paid off, we used all the money we had been using on that debt to work on the next, etc.

An amazing thing happened while we were in this process, and Norm got a much better paying job. That enabled us to pay everything off much more quickly. It also involved moving from Northern California to Southern California, so we decided to rent for a while. Meanwhile, we saved for a down payment on a new house. The beginning of that saving came from the sale of our house in Northern California (which eventually became worth way more, so don't get the idea that we sold at the top of that market). Anyway, when we moved into our current house, we were able to put 20% down. That gave us a good head start, but it also meant that we didn't have to pay for mortgage insurance. We also put the house on a 15 year mortgage instead of a 30 year. Finally, we decided what we could afford instead of taking what the bank would loan us. Banks, at least back in the dark ages before the great crash of 2008, would loan way more than you could really afford. A good rule of thumb is that your mortgage payment should not total more than 25% of your take home pay.

For a while, we made some extra progress on the house, but we weren't doing all we could. I was not too into bargain shopping when the twins were really little, so we had gotten out of the habit of budgeting. Still, we stayed within Norm's normal salary, so any extra money like bonuses were used to pay down the house. Then, about two years ago, I started listening to Dave Ramsey on the radio. We read his book for our ward book club. Norm and I got back on the bandwagon and put together a written budget again. Once we did that, we were able to use extra money again to pay down the house. Once we got it down low enough, we used money from our emergency fund to pay off the last part, so now we need to rebuild the emergency fund.

There's one thing we did differently than Dave Ramsey recommends: we put paying off the house as a higher priority than doing college funds for the kids. I personally believe that owning your house gives great security and that there are many ways to pay for college. I think it's good for kids to help pay for their own college.

So, that's the whole story. I'm happy to answer more questions if anyone is interested in knowing more after wading through this lengthy post.