It’s true. My family has zero debt. No credit cards, no car loans, no mortgages… no nothing. And it feels really good. It is possible to live this way, and I’d like to share with you exactly how we do it.

Hopefully you read my last post about why we paid off our house early. That’s fundamental. To recap: We’re not trying to build wealth. We’re trying to be more generous. But generosity doesn’t just happen. It requires intentionality.

To be clear, I don’t believe debt is sinful. However, Scripture does discourage it. There are consequences of debt that you might not have realized. It has been our family’s aim to get out of debt as quickly as possible.

Let me warn you. As you read this post I bet you’ll be tempted to say, “Well it worked for them. That’s great. But our situation is different. It can’t work for us.” Maybe that’s true. But I’ve sat down with single moms, young singles, young marrieds and older marrieds and heard countless stories of financial instability – and have yet to hear one that was insurmountable.

I believe you need four things to get to a new place of freedom, financially speaking: A plan, a goal, a boost and a cheerleader.

With all of the people we’ve encouraged to get out of debt, each of them got excited once they put a plan together. Almost immediately they set a goal. Maybe a tax return, a performance bonus, or a gift served as an initial catalyst – or boost – to get them started. And then they had someone in their corner telling them they believed they could do it.

We originally set the goal that we would pay off our house by the time my oldest son went to college. He is 10 right now. Once we saw the traction we were making we knew we could do it even quicker, so we got more aggressive and revised our goal. It was to pay off our house by the time I turned 40. Yeah, we overdid that one a little. (I’m 42.)


(I was expecting something a little more celebratory in the mail. All we got were our original loan documents with this stamp at the top. Oh well. We’ll take it.)

First, let me describe some general principles we live by:

Buy only what you can pay for with cash. There is no exception to this. Any purchase we make is made with money we have in the bank. It doesn’t matter if it’s going out to eat or buying a car, we pay with money in hand.

Tell your money where to go. It’s called a cash flow plan. If there is one massive piece of help I could give you, it would be this budget sheet. We’ve been using some version of this budget for almost 10 years. To compare, this budget is the one I gave away 5 years ago. You can see how they’re different. [Note: If you want to use either of those budgets, you need to open it in excel and create your own file name. I get many emails from people saying they’re trying to get access to it and don’t know how. It’s that simple, though.]

There are plenty of other options for budgets. I know some who use YNAB, Mint, or EveryDollar. They look really cool, but we’ve just stuck to our simple excel spreadsheet and it has worked just fine. The idea is this: create a plan. Tell your money where you want it to go, before you spend a single dollar that month.

Think about the entire year when you budget monthly. If you know you’ll need tires as some point, or plan to buy Christmas presents, then you have to start setting money aside months in advance. Once you need to buy those things, then you’ll have the cash sitting in your account. It’s called an accrual, and one of the very first blog posts I ever wrote – when nobody read my blog – described how we do it.

Don’t let the bank decide how much house you can afford. This article describes this well. We Americans love to buy homes that make it extremely difficult to pay our bills month to month. If you think it’ll be impossible to ever pay off your house, maybe you need to downsize. Our monthly payment has been less than 30% of our net take home pay, and really closer to 20% for the last 8-10 years.

Splurge on memories, not things. Toys are interesting for about a day or two. More expensive toys might hold our attention for a few months. Generally speaking, we only splurge on memories. Instead of filling closets with toys, we take intentional trips to build stronger relationships within our family and our friends.

Living this way financially doesn’t come easily – nor does it appear normal. Here’s how these principles play themselves out. A few practices of ours…

We built our house. Don’t be afraid of building or remodeling. It can build “sweat equity” rather quickly. With the help of many friends, I literally framed our first floor, did the electrical, trim and clean up on our home. It saved thousands to help us get to a price range that was much more reasonable.

We only own one TV. Our kids don’t own phones, iPads, gaming machines or computers. We have an old sound system that crackles often, and one computer for the family. Bottom line: we don’t waste much money on electronics.

Eating out is a novelty. We might eat out as a family once a month – maybe. After all, we have 5 kids, so that gets pricey. Even as a couple, my wife and I just don’t eat out much. We know it adds up, so we just don’t go there.

We squished our kids in a Camry. We’ve driven a Toyota Camry with 2 kids in car seats in the back because we couldn’t yet afford to buy a van. And once we did, a few years later we replaced the transmission for $4,000 because we hadn’t quite saved up enough to buy a newer van. When you buy with cash, you are forced to truly live within your means.

We shop at consignment sales. Our kids wear used clothes, and they love it. My wife is probably the number one fan of this sale. We save thousands by purchasing shoes and clothes this way.

So practically speaking, if you want to pay off your house early:

  1. Follow these steps. We followed steps 1-3 religiously, and then loosely held to 4-7. It’s a simple plan, and it works.
  2. Create a budget. Use the one I listed above, or create your own.
  3. Work hard with your spouse to live within your budget and review it monthly.
  4. Set annual goals. Decide in January how much money you want to try to pay down on your house that calendar year. Make it a priority.
  5. Stay focused. I’ve listened to this weekly podcast for years. It’ll encourage you to keep going when you feel like you’re not moving forward.
  6. Know that there will be seasons where no progress is made. This might be months, or even a year. Once you are able to get back after it, then do it.

What did I miss? Do you have any specific questions about how to pay your house off early?