If you can pay down your mortgage early, you will feel a lot better on a day to day basis. Finances are one of the biggest battles in a marriage, so if you can payoff the mortgage early, you will lower your fixed costs and put yourself and your family in a great position even if you lose your job in the future. There is a lot of satisfaction in being debt free. The key is to stay disciplined and find ways to cut your costs and re-direct most if not all of your excess money to paying down the mortgage. Don't underestimate the power of being mortgage free to eliminating a lot of your stress.
So, how can you get there?
1. Do you really need to take expensive trips when you are raising a young family? Sure, Disney World sounds great, but in reality it is sort of a nightmare being at Disney with really young kids. The same applies to the latest and greatest toys; young kids really don't appreciate them. So, take the money you would have spent on these lavish things and use the funds to build towards paying off your mortgage.
2. It is imperative that your first track all of your monthly expenses and then lay down a budget and follow it. The budget needs to include how much money you plan to pay towards your mortgage principal each month.
3. Refinance when you see the rates drop; this can potentially reduce your interest payments and allow you to take that extra money and make extra principal payments against your mortgage. Today, 30 year interest rates are around 4%, so if you are in the 5-6% range or higher, it is imperative that you refinance.
4. When you receive a windfall, you need to immediately use those funds to contribute to paying off your mortgage. Make an extra principal payment. Don't go out on a shopping spree; make a decision to see teh future without a mortgage. Any extra cash, including a second job's income, a bonus, a raise, money you inherit, etc. needs to help towards paying off your mortgage.
5. Although it is good to contribute to your retirement fund when you are young, if your goal is to payoff the mortgage early, then you might reduce your IRA or 401(k) contribution to increase monthly mortgage payments. It is a choice, but the short-term benefits of paying off the mortgage early will help you enjoy your life for a long period of time. You can always increase your contributions at any time, especially after you payoff the mortgage.
6. Although it is nice to have a new car, aren't you just trying to keep up with the Joneses? The bottom line is that your car becomes relatively uninteresting after a few months, so the best path is to find a reliable used car that won't require monthly payments and divert the difference to your mortgage.
7. Renegotiate with your utility companies. Check out sites like lowermybills.com and others that allow you to find lower cost alternatives to your current providers, and then call them to negotiate (or switch to another provider). This works for electricity, cable, phone, cellphone, car insurance and other companies.
8. Ideally, work deductions from your paycheck so you don't owe any taxes at the end of the year nor are you due a refund. Both situations take money away from being able to pay down the mortgage early.
9. Make every effort to reduce other living expenses. You can lower the temperature in the winter, raise it in the summer, use switches that shut things off automatically, shut vents that are not needed, use energy efficient bulbs and appliances, etc. Pay attention to the details and watch your monthly costs drop substantially.
Ultimately, you need to stay disciplined to achieve this goal, but think about how good it will feel when you get there. Not many people get this major goal checked off, so why not be the one that can say, "I don't have a mortgage". Those words will reduce your stress dramatically.
So, how can you get there?
1. Do you really need to take expensive trips when you are raising a young family? Sure, Disney World sounds great, but in reality it is sort of a nightmare being at Disney with really young kids. The same applies to the latest and greatest toys; young kids really don't appreciate them. So, take the money you would have spent on these lavish things and use the funds to build towards paying off your mortgage.
2. It is imperative that your first track all of your monthly expenses and then lay down a budget and follow it. The budget needs to include how much money you plan to pay towards your mortgage principal each month.
3. Refinance when you see the rates drop; this can potentially reduce your interest payments and allow you to take that extra money and make extra principal payments against your mortgage. Today, 30 year interest rates are around 4%, so if you are in the 5-6% range or higher, it is imperative that you refinance.
4. When you receive a windfall, you need to immediately use those funds to contribute to paying off your mortgage. Make an extra principal payment. Don't go out on a shopping spree; make a decision to see teh future without a mortgage. Any extra cash, including a second job's income, a bonus, a raise, money you inherit, etc. needs to help towards paying off your mortgage.
5. Although it is good to contribute to your retirement fund when you are young, if your goal is to payoff the mortgage early, then you might reduce your IRA or 401(k) contribution to increase monthly mortgage payments. It is a choice, but the short-term benefits of paying off the mortgage early will help you enjoy your life for a long period of time. You can always increase your contributions at any time, especially after you payoff the mortgage.
6. Although it is nice to have a new car, aren't you just trying to keep up with the Joneses? The bottom line is that your car becomes relatively uninteresting after a few months, so the best path is to find a reliable used car that won't require monthly payments and divert the difference to your mortgage.
7. Renegotiate with your utility companies. Check out sites like lowermybills.com and others that allow you to find lower cost alternatives to your current providers, and then call them to negotiate (or switch to another provider). This works for electricity, cable, phone, cellphone, car insurance and other companies.
8. Ideally, work deductions from your paycheck so you don't owe any taxes at the end of the year nor are you due a refund. Both situations take money away from being able to pay down the mortgage early.
9. Make every effort to reduce other living expenses. You can lower the temperature in the winter, raise it in the summer, use switches that shut things off automatically, shut vents that are not needed, use energy efficient bulbs and appliances, etc. Pay attention to the details and watch your monthly costs drop substantially.
Ultimately, you need to stay disciplined to achieve this goal, but think about how good it will feel when you get there. Not many people get this major goal checked off, so why not be the one that can say, "I don't have a mortgage". Those words will reduce your stress dramatically.
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Looking to payoff your mortgage early? Mortgage Payoff, then you need to take charge of your financial future.
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