Monday, January 7, 2013

Operation Mortgage Payoff

Dave Ramsey often says, “Live like no one else so that later, you can live like no one else.”  This quote runs through my mind often when I want something.  This is also the quote that helps me to pass up those impulse purchases.

While I was driving home from work in the middle of December, I was thinking about our one last debt – the mortgage.  At the end of 2012, the balance of our mortgage was $50,408.57.  Todd and I talked about our goal to have the mortgage paid off in full by the end of 2016 and we were excited about being able to accomplish this.  When I reflected on the remaining balance of the mortgage, I thought about how feasible it would be for us to pay the mortgage off in two years.  I ran the numbers in my head and it was completely attainable to pay off the mortgage.  But there was a catch: Todd had to be 100% on board with the plan.

Surprisingly, Todd was game when I communicated my master plan.  This is how we are going to attempt to pay our mortgage off in the next 24 months.

Save 50% of our income
Back in October, I wrote about how we pay ourselves first before any of our monthly expenditures.  In 2012, we were paying ourselves 40% of our income to meet our financial goals.  In 2013, we will be increasing that amount to 50% in order to help achieve the goal of paying off half of our mortgage in 2013.

Put Off the Unnecessary
The only way we will be able to pay off our mortgage in two years is to put off major home repairs as well as put off purchasing a new vehicle.  We decided that we have enough odds ‘n ends work to do around the house to last us the next several decades years without taking on any additional projects, so that wasn’t an issue.  We also agreed that we would put off purchasing the new vehicle Todd has been dreaming of and we have been saving up for over the past 9 months.  By eliminating these two unnecessary expenditures from our budget will help us pay off 20% of our mortgage each year.

Cut Back
Not only are we cutting back on what we are saving for in 2013 and 2014, we will also be cutting back on our spending.  We are pretty frugal around here, so this is going to entail some creativity.

Our grocery budget is currently $250/month.  My goal is to lower this category of our spending by 25% in 2013 to $187.50/month.  With the help of our garden, I think this goal is achievable without a lot of struggle. 

We are definitely cutting back this year on our travel budget.  We enjoy taking a few trips each year to experience new places.  This year we will be cutting back to one or two trips and they will be close to home and very inexpensive. 

Sell Unwanted Items
I have wanted to go through everything in the house and purge the items we don’t use for years.  This is the year it will get done.  We have already listed and sold some of our possessions on Craigslist over the past few months, but we look forward to getting rid of a lot more. 

Start a Home-Based Business Part-Time
Todd and I have dreams of starting our own business and had plans to move the process along in 2013.  We are putting off the repairs to our home for the business this year but that doesn’t mean we can’t get our feet wet in the business.  We will attempt to grow our customer base (which wont be difficult to do seeing as we have yet to advertise our services and have zero customers) in 2013 so that hopefully we can pull the trigger and make our business a full-time position for one or both of us in upcoming years.  This will not only bring in some extra income but will give us some much-needed experience. 

I realize that we are in a great position to even have the option to do this.  If anything were to change in our lives such as starting a family, losing a job, becoming sick, or taking care of a sick parent, we wouldn’t be able to pay off our mortgage in the next two years.  But for now, while we are able, we are going for it.  We are reaching for the stars.  We are looking forward to living like no one else.

 Side Note: Steve Stewart from MoneyPlanSOS is also in the last few years of his mortgage.  You can listen to his numbers and how he got there on his Podcast Episode 88.

Are you/did you payoff your mortgage early?
I want to hear about what you are doing to make this dream a reality.


  1. Wow...two years! That's amazing! Best wishes as y'all buckle down to achieve this awesome goal!

    1. Thank you for the encouragement, Rachel! :-)