Posted by TJ on Monday July 7, 2008 @ 03:56 PM
[Tags: personal, accounting, house]

My whole life I've never was in debt. Living paycheck to paycheck just wasnt my style. I've never carried a balance on my credit card. I did use student loans while in college but only to take advantage of the low interest rates and was sure to pay them off within 6 months of graduating.

Now I did make some concessions to avoid debt for 27 years:

• I went to Community college,
• I started out with a crappy car once I got my license even though I had 30k available to me. In fact the car couldn't even go more than 3 miles or else it overheated
• I got a job as soon as some one would hire me at age of 16 and even had two part time jobs for most of the time while still juggling high school and college.
• I was had to endure my friends and family calling me the cheap one because I never spent wads on toys or electronics..oh the pain.

Well now I enter the debt zone in a couple months with my first house. The 30 fixed mortgage is sure to put me in debt for along time. And the state of the economy and the housing market doesn't help ease anything. I will still not be living paycheck to paycheck as I made sure to keep more than 3 months emergency fund (on top of money for closing costs and furnishings), however, I think that I am going to make it my sole objective to pay off the mortgage in as little time as realistically possible. Now looking at my savings over the last month I could have possibly afforded a 15 year mortage, or $753/month more in mortgage payments. This of course leaves little room for unforseen circumstances and wouldnt be that smart of financial plan. But I think what I am going to do is save my money at the same pace I always have been and once I saved enough to make an extra payment I will (for instance make two payments in one month) and if I average at least 6 extra payments a year I would not only be financially free in half the time but save my self ~200k in interest. During my loan prequalification I made sure to clear up that two things were available with my loan online payments and no prepayment penalties to make paying off early easier.