What We Plan to Sacrifice

by Kevin on April 22, 2009

Yesterday I asked if you had the guts to make sacrifices necessary to reach your goals.

Today I’ll tell you about changes we are making to hit some of our goals.

We Talked About the Future

A few days ago my wife and I started talking about our future. Before we got married we had a discussion about how many kids we wanted to have and when we wanted them. That time frame is getting closer and closer.

Currently we live about 6 or so hours from both sets of parents since we share the same hometown. For us that’s just too far. We have great friends in Birmingham, but we just don’t feel the support network you would feel having your parents close by.

We don’t want to live in our hometown… it is much too small for our tastes. But there is an option nearby — about an hour to an hour and a half from our parents — that would be a great fit in our eyes.

The Problem: Considering Moving in a Few Years

Nothing is set in stone, but we are considering moving back closer to home sometime in the next few years. The problem we run into is we just bought our home a year and a half ago. Since we are just starting to chip into our 30-year mortgages, we have little equity to show for our payments. We’ve made additional payments in the past, but most of our payments are still interest.

If we want to move we need to be able to sell our house and have money to put down as a down payment on a new house (plus moving costs, a beefed up emergency fund, etc.).

What Changes Can We Make?

We’re both on the same page with wanting to get back closer to home. That’s a key point — you can’t have one spouse wanting to move and the other wanting to stay. That doesn’t work. We’re on the same team here and the team is going in the same direction.

The next obvious question is what could we cut or change to help us either pay off the house as quickly as possible, or at least put a huge dent into the mortgages. If we could pay off the second mortgage we would have roughly 20% equity to walk away with if we sold the house (minus realtor commissions).

To achieve this we discussed the following budget changes:

  • Cutting our allowances/individual spending money in half each month
  • Cutting our eating out budget in half (from roughly twice per month to once)
  • Cutting trips from our budget — we’ve already got money set aside for our summer vacation, and money to
  • Applying all of our extra money left at the end of the month to the second mortgage
  • Adding in my blogging income (minus taxes) to the second mortgage

Result of the Changes

If we are able to successfully maintain our income and our current budget… while also maintaining the changes above… we will pay off our second mortgage by February 2011. If we want to move in the next two to three years that puts us in the 2011 to 2012 timeframe. Paying off the second mortgage by then would be absolutely huge in moving us toward that goal.

Naturally, nothing is set in stone. I’m not planning on leaving my current job. Lots of things can happen between now and then. (Hey, No Debt Plan could get really popular and I could be blogging full-time from anywhere in the world!)

But we’re making the changes. We’ll see if they are sustainable. We’re deciding what is most important to us and realigning our budget to get us there. Even if we don’t end up moving for whatever reason we’ll have saved a ton of money in interest.

Have any of you made significant budget changes to meet a lofty goal? (Or have any advice on how to move a two-income family — two jobs, sell a house, then buy a house — all at the same time?)

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