Paying off the Mortgage early, that’s what we’re doing and here’s why. I vividly remember the day when I came home from work and my husband was sitting behind the computer with a perplexed look on his face. He looked up at me and asked “I don’t know, do you think we should pay off the house loan too?”
A few weeks earlier we had just started listening to Dave Ramsey, a radio host and author that believes that becoming debt free
is the key to financial freedom
and building wealth
. We had just emptied out our savings accounts to pay off the two brand new cars we had just financed. My heart sank in my chest, was my husband taking crazy pills before I came home? Did he realize that paying off the mortgage would mean that we would have to work lots of overtime
for years and years to ultimately pay off the $233,346.60 owed on our mortgage?!?! He proceeded to do a mortgage
calculation that revealed that if we didn’t pay off the house early we would pay $118,123.78 in interest throughout the life of our mortgage, which is essentially throwing that money away.
$118,123.78!!!!!!! That can buy me another house somewhere, or 6 cars, or millions of chocolate bars, or lots of mission trips….the list can go on and on. It took me a few days to totally get on board with my husband. We suddenly became team-mates and partners on our journey to attack this massive burden of a debt. We began by agreeing to hold each other accountable for our finances: we got on a budget
(something I have dreaded my entire life) it has such a terrible connotation. We decided to live from last months income and jointly decide how our money would be spent the following month by doing a “zero-based budget
.” This means that we decide on paper how every single dollar will be spent the following month.
It took a while to get used to this new frugal way of life; the first two months I wanted to throw my husband out the window when I couldn’t “buy” the things I “needed” (vacations, new clothes, dining out….all things that one can live without.) I would throw these little whiney pants tantrums because I felt “entitled” to have certain things. But then I started to see progress. We felt traction as our mortgage debt diminished. The funny thing is that when we first started in February of 2011, we anticipated having the house paid off in April of 2016 because of my “whiney pants” needs and wants. It’s now a year and a half after we first started, and we are half way done!!
Once you see that traction, you get more motivation and it’s like a freight train you can’t stop. My husband and I started working more and living off of 40% of our income, putting everything else towards the mortgage, and we have never been happier. I respect my husband more than ever with the direction he is taking our family. I feel like a partner in our finances because I am treated as an equal member of our “budget committee.” I like to refer to myself as Vice President.
This experience has been the most enriching in my life: we have freed our souls away from meaningless “stuff” that we can easily live without, and our marriage, teamwork and communication has gotten stronger. It has taught us the value of hard work. I imagine all the opportunities this will open up for us: the possibility of us retiring early, the possibility of only having to work a day or two when we have children, the possibility of doing more charitable work…this is the “stuff” that truly matters in life. We are hoping to pay off our house in August or September of 2013, and when that day comes we hope to serve as inspiration to other working people that anyone can become financially free.
Would you pay down your mortgage faster or invest the money? Share your comments!
Thanks to Nurse Frugal (Vice President) for sharing their journey to debt freedom with us at Canadian Budget Binder. If you want to guest post for Canadian Budget Binder click HERE
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