Last night, I was having one of those nights where I couldn’t sleep because of the mass wave of random thoughts entering my head.
It started earlier that day when I made a list of all of our financial accounts, our budget, income, and how much was going into each investing account and each saving account. I decided to do this after Jamie made an offhand comment about not knowing what we were saving. (Even though I tell him all the time and he just never pays attention. Men….*insert eye roll*)
Luckily, he and I have the same views on money for the most part and I take the lead when it comes to the handling of the finances. He’s happy as long as he has enough money for his various hunting stuff and gets to eat out at work once a week. This system suits me just fine.
Anyway, I listed out everything that we had and then on the next page I listed what goals we will be working on. The big goal right now is that as soon as we sell our old house we’ll be paying off the new mortgage.
My plan has us comfortably paying the mortgage off in eight years. And if we were to really try hard we could do it in five. (This is as long as my income stays at least $4,000 per month.)
As I laid in bed thinking about paying off the mortgage I also started thinking about how most people in the financial space think it’s stupid to pay off a mortgage with a low interest rate since you might be able to earn more by investing.
But here’s the thing: I don’t care.
Why I’m Paying Off My Mortgage Early
Paying off a mortgage is a for sure thing. I’m for sure getting a 4% return. If I invested my money I could get an 8% return, or I could get a negative 8% return. The stock market doesn’t come with a guarantee.
But this isn’t about returns anyway!!
The thing is, if our mortgage was paid off and for some odd reason I lost all of my income we could live off of Jamie’s income without a problem.
(If you’re new here I got remarried earlier this year. Jamie = new husband. You can read more about that part of my life here.)
Another thing – a lot of the people who argue for the invest it, rather than paying off the mortgage, are the people on the early retirement bandwagon. But believe it or not, not everyone in this world cares about early retirement.
Jamie for instance could care less about early retirement. He likes his job and I imagine he would be downright miserable if he quit working. As for me I already feel like I’m in early retirement. While I am technically still working, I immensely enjoy what I do and at this point feel like I could do this for the rest of my life.
Working for us does not equal a lower quality of life.
Also as far as retirement savings Jamie is way ahead of me. He has a pension plan, contributes to another State retirement account, plus we’ll have my investments and when I get old enough, my social security.
We live in rural Ohio. The cost of living is low. Once the mortgage is paid off (and the old house is sold) our expenses will be less than $2,000 per month and that’s living a pretty good life. (One of the blessings of living in a low cost area!)
So while I’ll still be contributing to my retirement and investing accounts plus the girls’ college funds, for the next eight years a big chunk of our disposable income will be going to killing the mortgage.
You Gotta Do YOU
These thoughts have just made me want to remind you all – there is no one right way to do things.
Some people will think I’m stupid for wanting to pay off my mortgage early, while other people will totally get it. At the end of the day it doesn’t matter. I’m the one living my life and the decisions I make are to benefit me and my family.
Everything that you read should be taken with a grain of salt. For instance, on this blog I’m writing from my own perspective. And I’m only writing about the things that worked, or didn’t work, for me. That’s why you don’t see any posts about debt on this blog. I’ve never been in major debt so I don’t feel comfortable writing on it.
What’s on this blog are my life experiences. What has worked for me might work for you and it might not. We are all in different stages, have different goals, and well, just have completely different lives!
When you read financial advice (even from gurus like Dave Ramsey) take it with a grain of salt. Pick the parts that will work for you and leave the rest.
If you follow somebody else’s plan word for word you might make a terrible mistake like costing yourself hundreds of thousands of dollars because you have a bad credit score or not paying off your mortgage because others say you should instead invest your money.
You need to do YOU.
I know this post was supposed to be about why I’m paying off my mortgage early but I just want to get the point across – we are all different. Make individual choices that benefit you. Create the life you want! Don’t create the life someone else says you should have.
So that is why I’m choosing to pay off my mortgage early. And I sincerely hope that you are putting some serious thought into your financial decisions and doing what works for you and not blindly following other people’s advice.
I would probably do the same. Any debt can become devastating, if something bad happens.I was in smaller debt (car payments) and had 3 more years of my car payment and no job (ok, I started my web design business, but it was horribly hard). Now, with no debt, even if I have a slow month (and I did have some, since my baby was born), it’s still OK, we do make ends meet with no problems.
Keeping fingers crossed for you 🙂
Thank you! And yes, you’re right. You never know what happens and I would much prefer the piece of mind of having absolutely no debt rather than shoving a ton of money into a retirement account that I won’t be able to touch without penalty for 30+ more years!
Most people pay off the mortgage when they reach age 65 and the only reason is that the money they were paying the mortgage with now has to be used to pay the $1000 a month Medicare insurance payments with and that’s without dental coverage.
We also want to pay our mortgage off early (that is, once we close on our house haha).
I’m glad you mentioned early retirement on here. I do feel like that’s the DREAM of many in the PF world…but you’re right, some people are more than happy going to their 9-5 (or freelancing) and living the simple life (ie not traveling all over the place all the time). I feel like as I get older, I’m falling more and more into that camp. Plus. I LOVE where we live, so I don’t constantly feel the need to “escape” it, if that makes sense.
Best of luck to you on your early mortgage payoff!!!! 🙂
Thank you! Everybody is just so different. I think rather trying to force my way of thinking on other people that’s it better to recognize that each and every one of us wants something different out of life. And it’s easier to make decisions when you’re confident in what you want versus conforming to other people’s goals 🙂
Absolutely! I love that you address something that seems to get lost in the blogosphere sometimes: all of this advice comes from personal experience – which comes from personal preference. I want a mortgage so I can pay it off early, too. I think it will create a sense of freedom in my life. I call it a home base. I seem to have a lot of emotional attachment to it, as well. Like, I haven’t renewed my passport for some of the travel on my list of dreams because I want a permanent address on that sucker! Anyway, more power to you! I look forward to reading the “owning a house outright” journey.
Thanks MJ! And best of luck to you getting the permanent address on the passport!
We want to pay off our next home early as well. We just sold our last one and are attempting to find our next. Once we do, we will definitely be paying it off quickly!
I’m hoping our last one sells as quickly as yours did. I’m beginning to get a little nervous about that! Good luck finding your next home 🙂
Great post!
For folks who want to earn the extra money from an investment vs paying off mortgage …. they always talk about Numbers. But, there is an underlying assumption that they will have a stable income for the next 30 years. I don’t think that is a good assumption to make. I like to be a little defensive and have a plan for when the shit hits the fan!
~ C
Yes this is not about the numbers. But even if it was you are not guaranteed to get a return in the stock market. The truth is you could lose every single dollar you invested. A mortgage is a for sure thing and I know I’ll feel really good to not have one 🙂 Plus Jame is 13 years older than me and doesn’t want a mortgage when he retires.
My mom has no plan of retiring because she loves her job and she will work until she is ready herself. My husband and I feel the same way. I always say to my readers that my financial journey is completely different to others because it is my own. This is why I get kind irritated when someone goes and quotes Dave R to me like I’m breaking some law or something when I talk about credit cards. LOL This is why I enjoy reading your blog for so many years, you do you!
Thank you Joyce. I enjoy reading your blog as well 🙂 I am not a Dave Ramsey fan at all. I always refrain from speaking my true feelings about him because I know I’ll get hate mail! But I think he’s super, super arrogant. Some of his advice is good but him, as a person, leaves a bad taste in my mouth. And there are other parts of his advice that are just downright moronic.
I think his snowball method is great for anyone just starting to pay off their debt but after that people really need to broaden their horizons.
I love this post!! I also have a desire to pay my house off early. I will be cheering you on (hopefully you will share the journey with us) as you strive to achieve this goal!!
That’s awesome! Let’s share the journey together. Every time I do something stupid instead of paying extra on my mortgage I’ll email you and you can straighten me out lol
It’s a deal!! LOL!
A huge, gigantic portion goes to our mortgage. So much so that if it were paid off, I could possibly live off my husband’s income alone. Although for different reasons, I’d much rather pay off my mortgage than start investing (but really wish I could do both). However, paying off the mortgage will be the next priority, after getting out of credit card debt. Many blessings to you on meeting your goal!
Good for you! We paid our mortgage off early and the freedom it brings is far better than anything we could have invested. I’m with you on the not-retiring-early view, even though I am a lot closer to the retirement age than you are. I’d much rather continue working at something I enjoy and earning and being productive. It would be fun to travel, and I’m sure my husband and I will do some of that, but I can only relax and enjoy so long before I’m ready to get back to work.
Mortgage payments mostly dominate your monthly budget. If you pay off your mortgage, you’ll free up a lot of extra money each month. For this you can take cash advances online, which has put peace of mind in several people.
If we pay off our mortgage early, the total cost of our home drops dramatically. By eliminating our mortgage payments, we can easily expand our properties and use our income for our children’s college fund, retirement fund, or to have fun with. But before that, evaluate your personal financial situation to see if you will benefit from prepaying your mortgage. If your business is suffering from cash flow crunches, take help from factoring services.
Thank you for sharing. It’s interesting. Hope to hear more from you.