How 'frugal minimalism' helped this woman pay off her mortgage in five years

Kim Lee found an affordable home and paid it off in five years by being intentional with her money. Here's how she did it.
Image: Key in front door
If you want to pay off your mortgage faster, buy a house that's below market value. To find one, you need a good realtor. baona / Getty Images/iStockphoto
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By Julie Compton

Kim Lee, the personal finance maven behind “Free to Family,” a YouTube channel with over 41,000 subscribers, says she paid off her quaint four-bedroom house in Arizona in five years through a way of life she calls “frugal minimalism.”

Lee says it’s possible to find an affordable home and to pay off your mortgage if you focus on being intentional with your money. Here’s how she says she did it.

Spend time finding a realtor who will get you a great deal

When it comes to purchasing a home, you need to find a good realtor, says Lee.

She and her husband were able to purchase their current home at a price far below market value because they had a good realtor, she says.

“Getting a good realtor is key,” Lee says, noting that she spent a year looking for a realtor who had good connections in the town where she wanted to buy. “You have to search for someone who’s going to fight for you and get you good deals off market.”

Have a goal

Before you buy a home, you need to have a goal in mind, says Lee.

When Lee and her husband purchased their first home in 2008, their goal was to find a house that was so affordable they wouldn’t have to worry about paying the mortgage if one of them lost their job.

“Initially, the goal was to be able to have so little expenses that if anything were to happen in an emergency, we would be ok,” she recalls.

The couple’s first home was a fixer-upper, she says, which they purchased as a short sale for $175,000 around the time the recession hit the housing market. The mortgage cost $950 a month, which Lee says was about 25 percent of their incomes so if one of them lost their job, they would still be able to pay the mortgage, she explains.

Become a frugal minimalist

Lee says she and her husband paid off the mortgage on their first home in five years by living as inexpensively as possible.

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“I was literally just living like I didn’t have [money] when I had it,” she explains.

When the couple moved in, they purchased basic furniture, she says, and made their own decor. They got hand-me-down clothing for her two sons, both toddlers at the time. She says they only bought new clothing for themselves if they absolutely had to.

Kim Lee of the YouTube channel "Free to Family"Courtesy of Kim Lee

Lee says the family did not spend money on eating out or entertainment. They didn’t have cable, she says — only a Netflix account they subscribed to in 2011.

The mom says she batch cooked and meal prepped every weekend for five years, which she says saved the family thousands of dollars they used to pay off their mortgage.

“When you’re in this stage of life, your focus should really be your family, it really shouldn’t be going out to dinner, going out to bars, going out to clubs, buying all the home decor, buying all the clothing,” Lee says. “Buy what you need, and then use it, take care of it, and be content with it.”

Focus on what you’re saving instead of what you’re making

At the time the couple purchased their first home, they were both making middle-class incomes, says Lee. But because they focused on savings as much as they could, they were able to pay if off in five years, she says.

“It’s not income,” Lee insists. “It’s the daily actions, the daily habits, the daily things [people are] doing that are literally stealing money out of their wallets.”

What’s important, she says, is that you are intentional with your money, which requires focusing on how much you are saving instead of how much you’re making.

“If you focus on what you’re saving and focus on living below your means and being intentional with your money, making more money doesn’t always have to be the focus,” Lee says.

Become intentional with money

There are several ways to be intentional with money, Lee says. If you have a lot of consumer debt, she recommends applying either the snowball or avalanche method — two debt reduction strategies coined by personal finance expert Dave Ramsey — to paying it off, depending on your personal needs.

But it’s critical that you first become conscious of how you spend your money, Lee says. She recommends creating a spreadsheet, downloading an app or putting a whiteboard in your kitchen where you can track every dollar you spend. She says doing this for at least 30 days will help you see where you are overspending.

“Trimming [expenses] comes after you realize where you’re spending,” she says. “Inventory, tracking and then revisiting all of that to go back and say, ‘Where can I trim the fat? Did I spend $200 this month at Starbucks? Is that something that, if I wasn’t spending, I could put towards debt, or I could put in the bank?’”

Know your core values and make sure your money decisions align with them

Becoming mortgage-free is ultimately about understanding your values, according to Lee. She says her spending decisions all revolve around her core value, which is family. Knowing this keeps her spending habits in check, she says.

“What are your values?” she asks, “and are your money decisions aligned to those values? Are your daily decisions and intentions aligned to those values?”

If your money decisions are not aligned with your values, then no amount of budgeting is going to help you, she warns.

“You can sit there all you want, add up your income and minus your expenses, but when the rubber meets the road, you get up and you’re not happy and you just want to buy something that’s going to fulfill you, you need to check that,” she says.

After selling their first home in 2013, Lee says she and her husband purchased their second home below market value with an affordable interest rate. She says they are using some of the money from the sale of their first home to pay for renovations. They are still focused on living intentionally, she says.

“If we can live according to our values, we can do these things,” Lee says. “We can actually accomplish the goals that we’re looking at.”

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