"The ability to live happily with less reflects a deeper wealth for radical homemakers, because it frees them from working longer to attain more money."
Ever since I read Shannon Hayes' book, Radical Homemakers: Reclaiming Domesticity from a Consumer Culture, during my first year as a solopreneur over a decade ago, I was filled with confidence that my life did not have to follow the consumerist status-quo. While going from the corporate world to the self employed world more than doubled my income, I told my partner (now my husband), "I just want to make enough so I don't have to make much". Meaning, I wanted to get all of my debts erased. Student loans, credit cards, and yes, the almighty mortgage.
Inspired by Hayes' book and having already become car-free back in the city, I found new ways to look at life, to care for myself, and more that didn't always align with our capitalist society's Supposed-Tos, but forever impacted me in the most positive of ways, mentally and financially.
In a decade, I went from having a mortgage payment of $1500/mo and student loans & credit card payments totalling nearly $500/mo, to...none of the above. Taking chances, making hard choices, getting creative, and keeping my ultimate goal in mind of being debt free throughout the process was essential.
"Studies showing that a growing number of people in their 60s, 70s and 80s are still paying their mortgages. And the amount of mortgage debt they’re carrying has grown, too. It used to be that by the time most people reached 80, their house was paid off. In 1989, just 3% of homeowners over 80 still had a mortgage. Today? It’s nearly a third." - from MarketWatch.com
Gulp.
I bought my first home at 34 as a single woman in early 2006, with 100% financing thanks to a first-time homebuyer's program in Oregon, where I'm originally from, which helped those out who bought in 'up and coming' areas. The mortgage payment (including property taxes) was far over half my take-home pay, and with my student loan and credit card debt, I always considered it a miracle I got the traditional 30 year loan (and am forever grateful I had a broker who didn't try to sell me on balloon or ARM mortgages, as the housing market literally crashed 2 years after buying my home, and I watched its value go underwater for several years).
And after moving in, a quote from one of my favorite rom-coms, French Kiss, hit me like a ton of bricks, the one where the future sister-in-law says to Meg Ryan's character something to the effect of, 'you think you're buying a house when actually, the house owns you'. Wasn't that the truth! My 1925 bungalow was uninsulated, the roof had 5 layers (yes, five), the garden was nonexistent with weed trees everywhere, and, just divorced the year prior, I had only myself to depend on. (Not all of us have families who can - or in my case, want to - financially help out in any way, shape or form, y'all. I've always been on my own since the age of 17). I had to figure out a way to get things done, inexpensively but well, and bring in income. I had to get creative.
Hitting a wall in my profession happened the year I decided I had enough of my brogrammer tech startup I'd built my department from scratch on, when I realized I'd been thrown under the bus by an employee who gave false salary data to my boss about how much the market rate was for my type of role. And when I gave my notice (not knowing what I was going to do, but knowing I needed to do literally anything else than be in this wildly discriminatory environment, I was kind enough to give them 90 days), they hired a replacement for me to train before my departure who was - literally - paid an 80% higher salary than I'd been making, just after I'd been told they couldn't afford to pay me more. The laugh of course was that ultimately they fired him before my last day because they didn't know WTF they were doing, but it told me all I needed to know about the place, and I knew that anything would be better than this shitshow of a company.
The week I left I started consulting (same profession) thanks to the referral of an industry colleague, who also gave me tips on how to write up a standard contract. I integrated that into a more specific one to the type of work I was doing, paid an attorney to get the language just right, and was on my way...somewhat blindly, but following my gut on what I thought was right for the client based on my decade-plus spent on the corporate side of things. When my first two gigs ended up being wildly successful, my reputation began to create a path for me, and I ultimately ended up consulting for the next decade, with a number of repeat clients and a whole lot of others that were purely referral-based. Unlike what many tell you, not all self-employment has you working 24/7. Many of us have learned to monetize our existing professional experience into a consulting role, and with a good contract and strong relationship-building in your network and community, can create a new career path where your hours are MORE flexible (work smarter, not harder), the pay is BETTER, and you no longer have to deal with the irrelevant meeting, corporate BS and pay discrimination that often we get so used to in the traditional workplace. As a consultant, you are paid based on a prearranged amount, with your practices & policies defined and signed on the dotted line, and it's all based on RESULTS.
And so began my new chapter as a solopreneur from my late 30's to late 40's. Many lessons learned (described here) and a whole different set of anxieties to overcome, but ultimately, it led me to taking ownership over my destiny, gaining an exponentially greater understanding of the business world, and developing an advocate's mindset both in my work as a consultant and as a coach. Oh yeah, and Scrappy became my middle name.
So how does this relate to becoming debt free, you ask?
Here's the deal. When you are self employed - or at least when I was - managing your money becomes even more crucial to your survival. Once you have a taste of not going into the office, of leaving that particular bureaucracy behind, and getting paid based on results rather than what some executive who's never done the work decides? You want to preserve that at all costs. And you make sacrifices. And you do things you might never have considered before. And you see things a little differently.
Healthcare
First, I no longer saw health insurance as mandatory. Initially this happened because, back in 2012, I could't do the expense of COBRA as I didn't know what my future income would be. Then several month sinto it - this was before the ACA (ObamaCare) went into effect that banned preexisting condition clauses - I found out I could not get my own plan! Why? Because the same BCBS who'd covered me a few months prior decided that I 'had too many claims' in the past (literally, annual exams and therapy, y'all). And no one else would touch me either. Yeah, at first I freaked out. But then - yes, while reading Hayes' book - about the various alternatives many in her study were taking, from naturopathy to simply creating their own savings accounts for healthcare needs and more - that there were other options. A thousand dollars a month for COBRA? Or pay $150 to visit a naturopath for an HOUR who can still check my thyroid, prescribe my meds for it AND give me some holistic options to improve my overall health as well (the latter that those rapid-pace 10 minute appointments don't offer). And use some of the difference to invest in yoga and therapy for my mental, emotional and physical health, and the rest towards savings, or - gasp - living my life? Yes please. Several years later when I married my husband and he became eligible for health insurance at his employers, and therefore I did as well as his spouse, we looked at the affordability and coverage levels of the insurance before signing on the dotted line. Larger employers usually offered more economical plans, while the smaller ones he worked for made it, well, ridiculous for the working-class, so sometimes we had to turn it down.
Second, Dental Insurance, unless fully covered by the employer, is one I've found to be a HUGE rip-off. Did you know that the "twice a year" recommendation came from a Pepsodent ad in the 1950s in order to get dentists to recommend them to patients? Then when insurance companies became prevalent, this ensured they'd get paid regularly if dentists became part of their network. As the link I just included shows, we are not one-size-fits-all when it comes to our bodies - and that includes our teeth! Once a year is fine, and yep, even less if needed. And guess what? You can pay cash to get a cleaning & x-rays once a year....almost always for cheaper than the premiums add up to. Sure, you take the calculated risk of needing a filling or a root canal, but again, if that's not something common, why not just save that in an emergency fund? That's what I've come to know is right for me. And my husband has learned how over 80% of dentists he surveyed here in the NW (before choosing to make an appointment) refuse to give you a basic cleaning if they would rather do a scaling ("deep clean") treatment...so they'll send you away (yep, outright refusing care) rather than provide at least basic care for those who cannot afford it or elect not to do the treatment (or whose past dentist said it was unnecessary!). Multiple opinions in dental are crucial if you need care. And don't be afraid to demand the cash price in advance of treatment - it's literally the law.
Third, investigate your alternatives. Naturopathic care can be a good fit for many - but just like with MDs, do your homework with NDs. Some practice integrative care (i.e.., they don't dismiss MDs altogether) and others are highly suspicious and at times even science-denying types. I've had naturopaths who went to medical school, naturopaths who tried to tell me that I wasn't in menopause because I was "too young" (nope, wasn't too young), naturopaths who were more focused on selling supplements, naturopaths who happily partnered with my MD(s), and an especially shady naturopath who tried hawking 'cures' and preventions for COVID-19 in the beginning of the pandemic. I've also researched a lot of medical and vision care alternatives that range from utilizing your public health department (we just got free COVID and TDap boosters last month from ours, available to anyone uninsured, regardless of income) to ordering much-cheaper contact lenses from Costco instead of through my eye doctor, and ordering my annual thyroid bloodwork through reputable discount labs who charge a FRACTION of what it would be to go to your doctor's lab...even with insurance coverage (I believe I paid $15 for this last one). And, as alluded to earlier, I invest in things like yoga classes and take advantage of free exercise like hiking, online fitness classes, and building. Before we moved out of state, I paid my therapist in cash - and got a discount for doing so. Never underestimate the power of simply asking if a cash discount is available! Most providers I know Detest billing insurance!
Extra Income
After I exhaled from not having health insurance premiums bogging me down, the next thing I did (when I was still a single woman) was making extra income renting out spare room(s) in my house. Being classified out there as an INFJ personality type, I wasn't super keen on sharing my personal space long term with someone, so I came up with only doing short-term rentals. No, not Airbnb, as I wasn't comfortable with feeling like a Motel 6, but rather opening up the spare bedroom for a maximum of 3 months. So it'd be the same person the whole time, but with a guaranteed departure date by the time I was sick of having someone else in my house, LOL...not to mention I could take a break between tenants for as long as I wanted. This ended up being a perfect fit for those just moving to town who needed a place to hang their hat while they looked for long-term housing, plus it didn't involve leases as it was month-to-month (I just took a photo of their ID to make sure they were who they said they were), and once I furnished the room with a bed, dresser and desk a couple tenants later? It became not only more valuable, but I didn't have to worry about the chaos of a 'major move-in'. Only once in the years I did this did I ever have to kick anyone out, and it was because of his personal habits causing an unbearable stench in the room (which quickly went away after his departure and a deep-clean of the room).
NOTE: Every cent of this extra income went directly to paying off my debt.
Reprioritizing Income - and Savings
When you are self-employed and the income is, like I called it, "like selling Jaguars" (with gigs that are not small-one-that-add-up but rather significantly higher paid but far more random - and less frequent), you quickly learn to adapt. I saw a financial planner, and the first advice she gave me was to have a year's worth of basic living expenses in savings. So, essentially, adding my my housing, debt, and food expenses and paying my Savings account first with those until I had a year in the kitty for those slow times. Ultimately as my business grew and I became more comfortable with the hills and valleys, I lowered this to 6 months, but it helped me HUGELY know how much money I really had to spend...and to pay down on debt.
I had sold my dying car while living in the city several years prior and never regretted it. Not only did I live near several bus lines and never grew up sticking my nose up at mass transit like many do these days (the same snobs who, ironically, aren't afraid to get into some random stranger's car for 5X the price...dude, it boggles the mind), I was fully supported in my efforts by my coworkers at the time to learn how to bike commute, and that opened up a whole new world for me. Suddenly, I could park where I couldn't have prior, I could get exercise AND get to work often faster than the bus who made so many stops, and I gained SO much more confidence as well (along with the green street cred, lol...).
Fortunately I was also already a big fan of canning and preserving, so when I opened my own business, I became even more obsessed with cooking, baking, gardening, and finding way to get healthy, organic food for cheap. Buying in the bulk aisle was huge, as was in the summers picking my own fruit at orchards, rather than going to the farmers' markets. I also joined a gleaners group in the area which did large-scale picking of fruits from neighborhood trees and nearby orchards who had far more than they needed, which along with giving me some good exercise, also sent me home with several bags of pears, apples and more (they other half they gave to the food bank). And along with that, I occasionally bartered for garden veg from neighbors who had what I wanted and vice versa!
There really was no "clothing allowance" as some suggest. Early in my work life I'd been a Nordstrom employee for many years, and that was literally the fanciest I ever dressed - yep, making $6 an hour I wore discounted DKNY from the Rack, and after I left there it was business casual - or even actual casual - from there on out. I had some great outfits back in the day...but I'm so much happier while working while wearing leggings and a hoodie, y'all.
Socializing changed too - more dinners at home with friends, coffee or breakfast instead of cocktails and dinner, or enjoying cheap activities like taking bike rides with friends who lived nearby, going to events at the park, and having potlucks at my annual Solstice party instead of buying everything myself, et cetera.
Technically, I had the cheapest form of internet (unless you're running a production studio out of your house, y'all, you don't need the 'fastest speeds ever!' they try to con you into paying for), I did not have cable (before streaming it was the Red Box for DVDs, that was it), and
Along with all of that, every check that came in after the basic living expenses were covered went to paying down the debt. I picked my largest balance (not the highest interest rate unlike how some recommend!) which were my student loans. Knowing that student loans can never be discharged in a bankruptcy should devastation occur, unlike all other debt, and the fact that the mountain was so high? It meant that every large payment on them packed a much greater punch. Valuing my goal ABOVE ALL ELSE to become debt free made it easier to change my habits, get creative, and use any excess income way more wisely.
In three years of being self employed, I paid off my student loans by doing all of this. While I brought in more $ as a consultant, my tax burden doubled being self-employed (which many don't realize about the sole proprietors out there who are doing OK but not richie-rich that lead to things like incorporation, etc.), and so all the changes I made to bring in extra income were a true game-changer. And once I had reached this first goal? My confidence exploded! I ended up then getting the credit card paid off, then started tackling the home equity loan which was 20% of my mortgage.
Paying off the Mortgage: The Ultimate Fantasy
Ok so none of the stuff I talked about above resulted in owning our home outright...but it did take care of a HUGE burden, and opened up our life to so many possibilities. When I married my husband, we immediately tried a million ways to start a family, from 6 rounds of IVF with donor eggs to international, domestic, and foster care adoption. After I paid off my non-mortgage debt (before we were married), then both of us building up healthy 401ks/IRAs after we got hitched, our repeated traumatic failed attempts to become parents over 7 years, left us with no savings. The extra money I was making along with his income and both of our savings had led us to feel richer than we were...and we thought if we kept throwing money at it we'd eventually find the family we'd been seeking. Anyone who has been through the repeat trauma of unsuccessful fertility treatments and suffered adoption fraud on multiple occasions will understand the addictive nature. Why? Because no one publicizes how often it DOESN'T work. All you hear about are the "rainbow babies" and how if you "just stick to it long enough you'll become a mum" - and it's complete and utter bullshit. There are no guarantees, and the bona fide PTSD from the 7 years we spent in this universe changed me forever. I'm not the same person I was before that, and never will be.
When we emerged from that, determining in late 2020 we were no longer going to risk any more emotional trauma or suffer financial insolvency in the name of fulfilling society's expectation that we "never give up", we thought about the one Bucket List item that we'd been ignoring during those years: finally paying off that mortgage.
While I had refinanced to a 15 year mortgage just before we were married, during the first 7 years of our marriage we'd taken advantage of the rising value of my home (it'd nearly doubled in value in the 13 years I owned it) and sold it, buying a 5+ acre farm on the coast. Oh how we loved the life, and rebuilt it from the outside in - and the inside out! It was the house we had dreamed of raising a family in.
But when 2020 hit, everything hit the fan. Not just COVID, but that summer was when the last adoption attempt through the foster care system went to shit and we ended that journey. We were in a 3BR/3BA house that was 2,200+ square feet, double what we'd ever need, and something interesting was happening with the real estate market:
Everyone wanted to move out to the country. In a piss-poor real estate area of the state, suddenly over the several years we'd spent rehabbing the farm the value of the property as well as our lovingly remodeled home had nearly doubled. We knew this crazy market wasn't going to last long...and we made a choice.
Downsizing.
Devastated by everything that had happened, and haunted by a perennially empty home and memories of the little girl who'd called me Mom, we knew we could start over somewhere else, and use the profits to buy a much smaller home in cash.
And so we took the plunge in 2021 and sold the farm. While it was bittersweet, selling it to a young family with a little boy who'd never known non-pandemic life Just.Felt.Right. I knew they would love the gardens, the open spaces, the big kitchen we'd created, and more. And my husband and I knew that we needed to make new goals, and find new ways to be happy together without the prospect of a little one or two in our life.
First we moved back to city living, but much like dating someone the complete opposite of your ex when you are on the rebound? It's not going to last long. It was a great move for my husband's career and because of it I got to retire from my consulting career which I'd burnt out of during the pandemic and knew was no longer what I wanted to be doing with my life, but I needed something....different. A happy medium. A bigger backyard, but not one so big that it commandeered my time and took us away from our New Goal: TRAVEL!
And with that, the market that was continuing to go berzerk was starting to slow...but one thing I knew from living in an "up and coming area" the first time around? Those are the first places the first time home buyers who can no longer afford the other areas of the city will start looking. When the north and central half of the Emerald City became even more inaccessible, everyone started looking South.
I was right. While we lived in our little city cottage for only 2 years? We sold it for $70K more than we paid for it, to a lovely young couple looking for their first home. They benefited from all of the rehabbing we did on the home (both my landscaping and taking advantage of the city-subsidized weatherization program which fully insulated/sealed a once drafty AF place), and we were able to use the proceeds to pay cash a second time for a little place on a slightly larger lot in the Valley an hour-ish north of the city and not far from the gateway to the San Juan Islands, a quick drive up to BC, and much more.
The Benefit of Downsizing a Second Time
While our home is actually the same size as our last one (we were looking to go smaller, but inventory being lesser limited us), the backyard is double the size and the layout of the property is friggin' ideal for a gardener like me. My husband now walks rather than bikes to his new job, everything is within 5-10 minutes, and our two closest neighbors are both kind, gardenistas like me, AND utterly drama-free.
So where is the "downsizing", you ask?
We bought a house that was $200K less than we sold our city house for. While the agent commissions (ugh) swallowed up a large chunk of the profit, we put the majority of it into a high-yield savings account and a CD for a portion of it (conservative? yes. recession-proof? abso-fucking-lutely), and used the rest to do the energy efficient upgrades that we knew a downsize would provide for. We installed a multi-split heat pump, we removed all fossil-fuel-powered appliances (i..e, gas) from the property, and we have scheduled solar to go onto our roof in February. Our property taxes are half of what they were in King County, saving several thousands a year there as well. And after a random stranger shot my nextdoor neighbor through his back window 20' from where I was sitting late one night? I feel hella safer as well.
Along with all of this? Downsizing to a cheaper house in a smaller town allowed my husband to take on work he wouldn't have ordinarily considered, and freed him to not pick the position with the highest salary but rather the one he would be happiest in. We reached the goal of being able to get by on much less.
While some asinine financial planners and other "experts" will tell you to not pay off your mortgage and invest it instead? Don't believe them. I even read this jackass on Forbes saying you could be 'financially free and have a mortgage' - the definition of fiscal gaslighting.
You can spend all that money you WOULD have spent on a house payment and invest it in the market if you so choose.
Or you can put some in savings and pursue your other dreams...all the while knowing your house is YOURS...not the bank's. And you will finally exhale, knowing you are not one paycheck away from losing what you worked your ass off for.
Kevin O'Leary from Shark Tank knows a thing or two. In an article on CNBC, they conversed with him about why you should pay off your mortgage ASAP:
"If you already have a mortgage, O’Leary argues paying it off should take a higher financial priority than using extra cash to invest in things like stocks or bonds. "There’s never an incentive to stay in debt,” O’Leary says. “Life is unpredictable. What happens if you’re laid off or incur unexpected expenses elsewhere? Your once-manageable mortgage is suddenly going to seem not-so-manageable.”
David Bach echoes this in the same article:
“I can tell you, having been a financial advisor at Morgan Stanley, my clients who retired at 50 years old, the secret was: They had paid their mortgage off early."
So that's us, owning our own home outright for the second time. I'll be 50 next month, my husband's 56. He makes less than $20/hr and I'm retired. I now qualify for fully subsidized healthcare premiums through ObamaCare for any emergencies starting in January.
Having a mortgage? Never ever gonna happen again.