Lifestyle Design On Your Own Terms: The Mortgage

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Whether we admit it or not, we all have a rebellious spirit somewhere inside of us. For some, it manifests during the journey towards adulthood in an effort to gain autonomy and independence. For others, it comes later in life. Regardless of timing, rebellions seem to center on rejecting conventional wisdom. For me, that has meant rejecting societal expectations of what a ‘full’ or ‘perfect’ life looks like. Despite the pressure to meet them, societal norms are not always right. At least, they're not always right for me, and in my estimation, life is too short to try and stuff myself into a one-size-fits-all box.


Take, for example, the popular notion that responsible adults in their 30’s or 40’s should buy a house and hold a mortgage. A mortgage, it's said, will help raise your credit score, build equity in your home, and qualify you for tax deductions. It's what any sensible citizen would do.


On the outside, the reasoning sounds good. For some people, it might even make sense. For years, my husband David and I did hold a mortgage, but it became riskier than we were comfortable with. We hated that we were we paying our bank thousands of dollars of interest annually and we were tired of fretting over what would happen if we lost our jobs. Prolonged un- employment, we worried, would lead to foreclosure. That would lead to homelessness, and it all felt very out of our control.


Our solution was to do the opposite of what was expected — and it’s something you could do too. We saved up but downsized. We cut our debts, instead of accumulating material goods. We gained freedom, instead of buying into the system.


By moving into a smaller house in a less expensive area, we were able to cut our mortgage in half. My estimate is that we saved approximately $4,200 ($3,100 of which was going to interest) each year in mortgage payments.


Two years after we downsized, we sold the house and used our equity to build a new loan-free home. Because most of the labor came from our own two hands and we could complete the work bit by bit, we ended up with a small, but well-built cabin that we owned free and clear. Now our lack of mortgage or rent payments allowed us to save more than $8,500 annually. Six years after we first began downsizing, our total savings was around $42,000. By investing much of that money, we were also able to grow our nest egg.


So instead of upgrading your housing as your income increases, consider staying where you are or even going smaller. Instead of spending more on things that create stress, consider investing in spaces, like our loan-free home, that reduce stress.


While financial experts have mixed opinions on the potential benefits of foregoing a mortgage (you may not want to tie up cash in real estate or pay home-owner’s insurance and property taxes out of pocket), the peace of mind that it brought us was an important consideration. We've not experienced any negative financial side effects from our decision, and the psychological benefits have been monumental. I can rest easy knowing that I have a financial buffer in cases of emergency and no future economic down-fall is likely to threaten my home.


And if you don’t have the funds to put into a home of your own, renting is a perfectly viable option, but again, don’t overextend yourself. Even though you may not be accruing equity in your own home, renting means you save money on home repairs and maintenance. It also allows you the freedom to take advantage of better rental deals as they pop up or a great job opportunity in another town. If you’re living below your means, you can still put your excess funds into savings or investments that will help expedite your timeframe for realizing future goals.


Six years ago, we went rogue again when we moved to Ecuador. Our reasoning was based on more than a warmer climate. Introducing our sons to a new culture and language was high on our list, and the geo- graphical diversity, opportunity for exploration, and friendly locals were all important factors as well. We were confident that the whole package would add to our happiness.


However, not everyone saw things the way we did. Friends, family, neighbors, and even random acquaintances questioned our sanity. On the phone with my brother one morning he brought up our impending move. “My friend Ronnie from Korea has traveled all over the world. He says the U.S. is by far the best country he’s ever been in. Why would you want to move your kids away from here?” he asked.


I didn’t have a short answer to this question or the dozens of others that were thrown in my direction, but I tried to explain. Still, many struggled to under- stand why someone would leave "the best country in the world" and take their family to a "dangerous" foreign one. While it's understandable that a move of this nature is certainly not for everyone, it was exactly right for our family.


We're not the only North Americans who feel this way. The U.S. State Department estimates that approximately nine million U.S. citizens live overseas, more than double the estimated four million expats in 1999. While some are living in foreign countries due to work or military obligations, large numbers of retirees and families are choosing to experience something new, just as we have.


As it turns out, and to my own surprise, I've spent much of my adult life finding a path that is far from ‘normal’. Currently, it involves living without a vehicle, homeschooling my sons, and embracing minimalism when it comes to material possessions. Some would call it rebelliousness. I call it creating a life without regrets.


Whatever your dreams, aspirations, and needs, there are ways to make them happen that don't necessarily fit into the mold of society at large. Folks are living in tiny houses, touring the country in vans, traveling the world untethered to one spot on the globe, and ditching the cubicle life with passion-generated incomes.


In the coming months, I'd like to address alternatives to a variety of societal preconceptions. Come along for the ride and find your own path to happiness.


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