Back in Debt

In July 2013, right after Eugene and I were married, we paid off the remainder of our non-mortgage debt. No more credit card debt, no student loans, no 401(k) loans, nothing. We just had the mortgage on the house that Eugene had bought back in 2005. (We did and do still happily use credit cards to earn frequent flyer miles, but we pay them off every month.)

After our non-mortgage debt was paid off, we piled up money in an emergency fund. Once that was at a level we were happy with, we made a change on how we paid the mortgage. Eugene had refinanced in late 2012, but it was a 30-year mortgage, and we wanted to cut that down to a 15-year mortgage. We didn’t want to pay closing costs, so using some mortgage calculators online I calculated what additional principal payments we would have to make each month to pay off that mortgage by the end of 2027. We started those payments in May 2014.

In October 2014, we re-started funding our retirement accounts. We had stopped funding them while we were getting out of non-mortgage debt and funding our emergency fund. If you’re thinking to yourself that this sounds like Dave Ramsey’s plan, it is, at least up to a certain point.

Things were going well. We had enough money to pay our bills, to put some into retirement funds, and to do fun things with. We figured we’d continue like that for a few more years, and then someday when we no longer have pets we’d move into a new house that was a little smaller, a little less expensive, and more suited to our needs.

One day in early August 2015, we got a phone call with news about a member of Eugene’s family who was in the hospital with a bad prognosis. This was the first time we had to use our emergency fund. I was able to go online and book a flight for Eugene to go home to Canada plus get him a rental car without having to worry about whether we had the money to do it, because we did. We put him on the next flight without worrying about comparing prices. Once he was on the plane, I just transferred some money from savings our savings account into our checking account to use to pay off the credit card bill a few weeks later. Simple.

Thankfully Eugene’s family member’s health improved, and after a few days in Canada, Eugene came home. We talked about how things went using the emergency fund, and we decided to make a few tweaks. It worked well, but now that I’d used it there were some things I wanted to do differently. For one thing, I wanted to have some cash at home. I had time before Eugene got on the plane home to go to the ATM and get cash, but that might not always be the case. So we made that change. I also decided I wanted to keep more money in our local bank’s savings account where I can transfer it online to our checking account and have it available instantly. The rest of our emergency fund is in an online bank, and it takes a few business days to transfer. We ended up adding more money to this account as well.

The more I looked at our budget projections with these changes taken into consideration, the more I realized we needed to make some kind of major change, but I didn’t know what. Then a few days later on August 15, 2016, I was chatting with our friend Jason of Etherkit when he mentioned something in passing that made me give serious thought to the possibility of selling our house and downsizing. Poor Eugene was outside mowing the lawn at the time, so when he came back inside, tired and overheated and wanting nothing more than to cool down and rest, he was greeted by my overly-enthusiastic out-of-nowhere idea for selling our house. I’m not sure how he puts up with me, but God bless him for it. When I get an idea that I’m excited about, that’s all I can think of and talk about.

Over the next week, things fell into place. We did a quick search online to see what house prices were nowadays. There was a townhouse nearby for sale for way under what our budget would be. I considered this enough proof of concept to continue the discussion, and he agreed. Next we looked for existing homes which were more in line with what we wanted, and we found a few of those available in a price range that looked manageable. So far, so good.

I’m familiar with the Environments for Living program for home builders, so I thought I’d try to find an existing home that had been built to those standards a few years ago. It wouldn’t still have the guarantees, but if the house had been built well to start with, that was good enough for me. I thought I remembered that David Weekly Homes was the only EFL builder in Charleston, but I went back to the EFL website to verify that. It turned out there was now another one: Ashton Woods. Since I knew new David Weekly Homes homes were all out of our price range, I went straight to the Ashton Woods site. They had new subdivisions all over the Charleston area, including one way up in Moncks Corner where my godkids used to live back when I lived in Florida. The starting price for homes there was pretty attractive. Eugene and I booked a meeting with them for the following Saturday, August 22, 2015.

We got there more than an hour before our appointment and drove around the small neighborhood. At one point, I stopped and rolled down my window and asked a couple of older men in a front yard what they thought of living in this new neighborhood. One guy answered and told us it was great and shared a lot of information with us. They were really friendly. We drove around a while longer, and then we saw one of those same men down at the other side of the neighborhood. We stopped the car and started talking to him again, and he invited us into his house which we were now in front of. We met his wife, and they gave us a complete tour of their home. They’d been there for three months at that point. It was a different floor plan than we were considering, but it was great to be able to see a finished home. A good 45 or 50 minutes later, we had to pry ourselves away or we weren’t going to be on time for our meeting.

We ended up all but signing a contract that day, and the only reason we didn’t is that we hadn’t brought a checkbook. We had no intentions of buying a house that day! We don’t usually make impulse purchases, but… :-) Our salesman was so eager to make the sale that he met us at church the next day in the church hall while we were cleaning up after serving doughnuts, and we signed the contract there. We chose the lot behind the friendly neighbors. The salesman said the house will be done some time in March, but as you can see, I’m writing this in mid-May.

The order of operations we followed is not what I’d recommend. On August 22, 2015, we decided to buy this new house. On December 24, 2015, we moved from the old house into an apartment. We hired people to do a bunch of work on the old house to get it ready to sell. We listed it at 2pm on February 10, 2016, and had a signed contract with a buyer fewer than 49 hours later on February 12. We closed on the sale of that house on March 22, 2016. If I had it to do again, I’d move out of the house, renovate it, sell it, and only then buy the next one. I’d also go through a real estate agent when buying a new construction home. That would’ve made the process smoother. By the way, if you are in the Charleston area and you’re looking for a real estate agent, I highly recommend the agent who sold our old house, Melanie DeHaven. She is fantastic.

For the past month and a half, we’ve been completely debt free — mortgage and otherwise. It’s a great feeling, and I don’t want us to be away from that for too long. It’s NICE not owing anybody anything.

Today we closed on the sale of our new home. OUR new home. I am exhausted and ecstatic. Those of you who know me know how far I’ve come in the past 10-11 years. My life is more amazing now than I ever could have imagined then. I am immensely grateful. I feel like the luckiest person in the world to be married to Eugene and to get to be a stay at home wife. I’m looking forward to turning this new house into our home and getting to know our new side of town.





Back in Debt — 2 Comments

  1. Whew! I feel I have read a novel, but a best seller it is! Interesting read, and so proud of what you have accomplished in a relatively short period of time. Congratulations…..please post pictures of the rooms after you have settled in and have all the furniture placed and pictures hung!! Wishing you continued success!

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