Living mortgage free

I have received a number of requests to wirte a post about life without a mortgage.  So, for those who asked - here we are.

We have not always been mortgage free.  When we purchased a house in Melbourne, we had a significant mortgage.  I was on less than graduate salary and the Gentleman Builder was on a stipend while studying his Masters.  Things were tight.  Very tight.  We made the decision, however, to pay more than the minimum repayments (by about double)  to get ahead on the mortgage in preparation for having children.  We had always planned on moving to the country and having a sustainable farm and the house in Melbourne was a stepping stone for us.  The plan was to work in the city and earn enough to buy a block and build a house without a mortgage.  The plan was going according to plan when we were approached by an investment firm to purchase our house when I was pregnant with Little Miss.  The timing was a bit off so I managed to negotiate a long settlement so I could see out the pregnancy in Melbourne.  We moved to Gippsland when Little Miss was 4.5 months old.

If I am honest in the appraisal of our finances, we would have been quite comfortable on one salary had I not been ill in 2009/2010 (and the start of 2011).  That little furore cost us nigh on $100K in out of pocket expenses and lost income due to me not working.  Like Pumbaa (from the Lion King) says "You got to put your behind in your past".  Despite how guilty I feel about the costs associated with my illness, what's done is done and there's nothing anybody can do about it.

In a nutshell we live a peasant, no... wait, what I mean is we live a p-l-easant life.  We have enough to get by on and don't miss out on too much.  We have chosen, consciously, not to enter into debt.  The way we achieve living mortgage free is to spend less:

• Our kids live in hand-me-down clothes (which actually sits well with me considering how much waste there is in the world)
• We have a very dubious car 
• I am not an average woman. - I spend less on beauty products in a year than most women would spend on shampoo alone.  I don't do pretty and I have never been a fashionista (lucky, really, because if I was not already that way, I would have been forced down that path (or the wheels would have fallen off somewhere along said path)).
• We rely on birthdays and Christmas to stock us up on new clothes
• As things have broken (like the microwave) we have not replaced them but made do without (part of this has been preparation for the fact that we will have less power at the block and therefore any electrical items we can live without we do).  
• We don't spend money on entertainment (the only exception in the last few years has been Rock the Ballet but I also consider that educational so it is easier to justify)
• There are no meals at restaurants
• We don't buy magazines and rely on the library for books and DVDs
• We don't have the latest gadgets (no iPhone,  iPad or XBOX60 in sight)
• Until I started work in Melbourne we shared a mobile phone
• We repair things as many times as we possibly can
• The kids' art collection is mainly recycled food boxes with some staples

Seriously though, it can be tough.  I work full time in paid employment while the Gentleman Builder homeschools the kids, looks after the farm, builds the house and keeps up with the standard household chores of cooking, cleaning and washing.  on weekends, after a full week of work I come home to work on the building.  To help out the Gentleman Builder and allow him to spend as much time as possible to build I make and freeze meals for the family for the next week. 

I don't make a spectacular wage, a little above the Victorian state average of  $60K.  With that I support our family of four and fund the build.  I'm not going to mince words; we live pretty close to the wire.  We have no spare money for holidays and there is no fat if something goes wrong. If I were to lose my job, we'd last about a fortnight.  That's not a pretty place to be with two dependent children and is a cause of stress for me at times.  Knowing that we have taken this path by choice helps me to move through the stress and see how I am helping set us up for the future.

We have deliberately chosen not to take a mortgage out for the build.  There are a number of reasons for this:

1. I believe the economic climate we live in is precarious at best at the moment
2. We don't want any financial institution to have any whiff of a right to come and repossess our residence if the economy falls flat.  
3. I like the fact that we actually own the things we have.  While we don't have much, what we do have is all ours.
4. Debt worries the Gentleman Builder and I don't like for him to be stressed

And we're not the only ones that have downsized and are living mortgage free. There are many out there doing the very same.  There are plenty of sites offering advice on how to get to the point where you no longer have a mortgage.

To be honest, life would be much easier if we took out a loan.  We would be able to get all the things we want for the shouse.  Not having a mortgage and paying for things in cash makes us seriously contemplate every choice that we make.  A side-effect is that living without a mortgage has made us make more sustainable choices too, which I am very happy about.  I am being true to myself and the things I believe in and I like that sense of authenticity.  We have used many recycled materials in our build which we possibly would not have done if we had money available for other options.  I am honestly very grateful for that.  Money can, on occasion, cloud judgement.  Not having money forces you to make choices about everything.  

And we are actually not 100% debt free.  My parents have also helped us (thanks be to the Bank of Mum) out with a small, no interest loan so we could buy a stainless steel tank (which would have been out of reach with our budget).  The plan is that once we are living on site and the building is complete we should be able to save the money we owe and pay it back within a few months.

However, there is a cost associated with not having a bank mortgage - an extended build time.   Because we don't buy in labour the build is slow  (which is not surprising considering the Gentleman Builder educates the kids; feeds and waters the livestock and maintains the home we live in).  The building process is unrelenting with single tasks dragging out for weeks or months making progress on the build doggedly slow.  At times I find it infuriating.  Some days I am so sick of working on the shouse (and I just want it to be finished so we can live there) that I question our choices and worry that we have made a terrible mistake.  If the kids were in school the Gentleman Builder would have 6 uninterrupted hours a day, five days a week to build.  Additionally he would not have to rush around organising curriculum and planning lessons.  He would not have to dedicate hours to learning new skills (like copperplate and German) to be able to pass this on to our children.  However, when I catch a glimpse of the kids running around or feeding the pigs or chatting to the steer, or I see the joy and pride on the Gentleman Builder's face as the kids read I know that we have done the right thing.  For us.