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- My husband and I paid off our mortgage more than 15 years early by following a simple money rule we learned from our parents (newsbreak.com)
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– Embracing a more flexible lifestyle was important to my husband and me, and clearing our mortgage early was key to this.
– Our strategy involved living modestly and opting for used cars instead of new ones.
– Whenever we had extra funds, we directed those towards our mortgage.
This July marked the moment my husband and I made our final mortgage payment.
Achieving mortgage freedom in just shy of 13 years felt nearly impossible once, especially when we considered how much we would end up paying over 30 years for our $170,000 home in a Cleveland suburb. Yet, at 39 and 37 years old, we’ve done it.
### The Decision to Pay Off Our Mortgage Early
Since 2016, an early mortgage payoff was a key financial goal for us, spurred by a desire to alleviate the combined stress of raising two young daughters and juggling our careers. The prospect of working full-time for another three decades, with limited leisure time in retirement, was unappealing.
I worked as an editor and my husband as a produce company supervisor, also serving in the Ohio National Guard part-time. Through research and calculations, we realized that early mortgage payoff and investing could offer us the flexible lifestyle we dreamt of. Eliminating our biggest monthly expense would free me to pursue freelance writing and enable my husband to reduce his working hours, bringing forward our financial freedom well before the typical retirement age.
While there’s debate among experts about the merits of early mortgage payoff, including the benefits of maintaining a mortgage to free up investment capital in youth, it was the right path for us. We refinanced our mortgage to a 15-year term with a slightly over 3% interest rate in 2016, focusing on early payoff.
### Living Within Our Means
Reflecting on how we managed this feat, it’s clear that living modestly played a significant role. Our parents taught us the value of this approach, demonstrating that it’s achievable but requires self-restraint and smart choices, such as home-cooked meals, satisfaction with a modest home, and eschewing the latest gadgets or designer wear.
### The Choice to Buy Used Cars
Following our parents’ footsteps, we’ve always chosen used cars over new, avoiding the immediate depreciation hit new car buyers face. Though we could afford new car payments averaging $554 each, as per Experian, we instead opt for low-mileage, slightly older models—paying in cash or securing low-interest loans without early payoff penalties. This decision alone has allowed us to divert significant funds toward our mortgage.
### Handling Financial Windfalls
A valuable lesson from my mother-in-law was to have a plan for unexpected financial gains, such as tax returns or bonuses. Early in our homeownership, she encouraged us to make extra mortgage payments, advice we eventually followed, applying any “extra” paychecks and bonuses toward our mortgage. This strategy, combined with the cessation of childcare expenses—once as high as our mortgage payment—has significantly accelerated our path to mortgage freedom.
Now, with our mortgage behind us and new financial goals ahead, we are thankful for the lessons from our parents that led us here, enabling us to pursue more satisfying careers and cherish more time with our daughters.
This article was first published in January 2021.
Read the original article on Business Insider