Debt Reduction & House Down Payment at the Same Time??? How & Why

This is another one of those areas that we go against the conventional wisdom when it comes to debt reduction.  Most of the mainstream financial folks will tell you to focus only on eliminating debt until you have cleared it all.  They will tell you trying to work on too many areas at once slows down your progress.   All that being said I must be a rule breaker by nature because as soon as we got serious about paying down debt, we also got more motivated to start putting some money aside for our down payment. 

This area is another one where I think you have to know your family to know what will and won’t work for you.   As much as some people try to make it,  getting out of debt isn’t a One Size Fits All solution.     

We own our current home, the land it sits on and that definitely comes with a lot of peace in the current economy.   The next logical question is then why are you in such a big hurry to get out of it??   Our home (which we are very thankful for) is a very old trailer that we outgrew 3 kids ago.  It has other issues that we can’t stay on top of because of the age and quality of materials used when it was built.   Anyway…  with all of the factors surrounding this house we’ve decided that we need to be prepared to build within a few months of becoming debt free. 

It was important that we didn’t slow down our progress on debt reduction while we tried to save but there really wasn’t a lot of extra money in the budget that could be redirected to house savings.  I told hubby to do something that he described as “goofy & probably pointless”.  I told him to have $5 a week direct deposited from his paycheck into a savings account that we could not easily access.   After a couple of weeks he did it (probably to shut me up).  For a few months, we did $5 a week into our house savings & I added money from our change jar, rebates, surveys and other small amounts of “extra” money.   Once he saw that the small (what he had considered insignificant) amount of money had started to add up he agreed to steadily increase the deposit from his check.   At about the same time, I also convinced hubby that he should pay himself from the farm and he wanted that money to be directed towards house savings (instead of debt reduction).   So that is where we started with our house down payment – $5 a week and all of our change.  Now we are at 12% of our down payment goal (which we hope will be about 30% down on the house). 

Saving for the house at the same time we work on our debt has been very motivating for us. It also showed us that we didn’t have to save a lot of money to start making progress towards our dreams.   I can remember as a young child my great-grandfather saying “Put your pennies on a shelf and the almighty dollar will take care of itself.”  I’ve tried to keep that in mind in our journey when so much of our money seems to be small and insignificant.  Even small amounts added consistently over time will get us where we want to be.

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7 Responses to Debt Reduction & House Down Payment at the Same Time??? How & Why

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