We Paid Off the Mortgage: Our Debt Free Journey

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We did it! We paid off the mortgage! As of Friday, August 3, 2018 we are completely debt free. For the past 7 years we’ve been focused on paying off debt. Nearly $200,000 of debt in total.

In 2011 we were sitting in a bank lobby applying for a home equity loan because both of our bathrooms were leaking in to the basement. We had nearly $50,000 in student loan debt, a $100,000 mortgage, two car loans, and had just agreed to pay a few hundred dollars a month for a lake house that my parents purchased.

We were definitely on the hamster wheel with no slowdown in sight.

Tipping Point

A moment of clarity came over us. We needed to make changes immediately. Thankfully, we came to this realization relatively early in our lives. I was 29 at the time and my wife a few years younger. She had gone back to school to get her teaching certificate and would be graduating soon. I was starting to work my way up the ladder at a quasi-governmental organization.

While our income has increased over the years, for most of our journey we made less than six figures combined. My wife as a public school teacher never made more than $40,000. Combined our salaries are about average for a dual income family of two college graduates. Our gross pay has been in the low six figures the last few years, but our take home pay has never exceeded six figures.

Paying Off Debt is Hard

It has been a long road to get here. Anyone who says that paying off debt is easy is lying. It’s really hard. Not because it’s complicated. Really it is the opposite. It’s so mind numbingly boring that it is difficult to remain focused. Paying off debt requires patience and discipline, both traits that humans aren’t especially good at nor find satisfying.

We lost our focus several times during our journey. In 2014 and 2015 we spent more than $30,000 on newer vehicles. First taking out new car loans, then immediately regretting the decision and paying them off with money from savings. Our journey constantly felt like two steps forward, one step back. At least we were usually moving in the right direction.

There was another time we had a rental property under contract that would have been funded by home equity. We backed out of the contract primarily because of the uncertainty of the inspection and worries around using home equity for our first rental purchase. Up until that point we weren’t planning to pay off our mortgage. That experience made us realize that buying a rental property with leverage didn’t feel like financial freedom. Especially since something going wrong could have meant losing our personal residence.

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The Decision to Pay Off the Mortgage

After the rental house experience we made the personal decision in 2016 to go all-in to pay off the mortgage. There was just over $60,000 remaining on the balance after we pulled money out of savings to further pay down the mortgage.

For the next two years we put all large expenses on hold. No home improvement projects, fancy vacations, or other large purchases. Month after month about 50 percent of our take home pay went directly to the mortgage. It wasn’t easy to make that payment every month thinking of all of the other things we could have done with the money.

The Feeling of Being Debt Free

We are obviously excited about being completely debt free. I’m not sure the feeling is fully appreciated yet though. In some weird way, paying off debt has become part of our identity. We’ve made significant commitments to pay off debt during the past seven years.

With that being said, the benefits of being debt free have already been realized. After the birth of our second child earlier this year, my wife decided to step away from teaching for a few years until our daughter is old enough to go to school. If my wife continued to work we’d certainly be able to accelerate our journey to financial independence. However, that is not what this journey is all about. It’s about living an intentional life focused on our values and priorities. And our two small children are our top priority right now.

What’s Next After Paying Off the Mortgage?

Short-term

So how do we plan to celebrate paying off the mortgage? First, we are planning a trip to Orlando to go to FinCon! My wife will likely join Friday or Saturday and we’ll stay in Florida for a few extra days, kid free. Our other big milestone for the year is to make some much needed home improvements. Our kitchen is especially in desperate need of updates.

Additional short-term goals include increasing our contributions to pre-tax retirement accounts and increasing our charitable contributions. I don’t think we’ll be able to max out all pre-tax retirement accounts this year, but hope to position ourselves to be able to do so next year.

Giving is something that we also value. We plan to increase giving to a few of the institutions we currently contribute to including our church, the United Way, the International Institute, the Epilepsy foundation, and the two children we sponsor in Uganda and Nicaragua. The goal is to increase our total contributions for the year to 10 percent of take home pay. Someday we hope to increase our contributions to 10 percent of gross income or even more.

Long-term

Longer term the goal is to get involved in buy-and-hold real estate. I’ve long wanted to try my hand at real estate investing, but never felt comfortable going further into debt to do so. Additionally, the home we’re in now probably isn’t our forever home. Within 3 to 5 years we will likely move to a new home. Where we end up will likely be dependent on the school district my wife ends up at when she returns to work.

Retiring early has never been the goal for us. Eventually getting to financial independence is all about having options. I currently work at a job with great people, a great boss, and has interesting and challenging work. However, I’m also not naive enough to think it will always be this good. Bosses change, layoffs happen, and other factors outside of my control occur in organizations. When I entered the workforce 11 years ago I made a commitment to myself that I would never work a job I hated. Pursing financial independence is a way to ensure that never happens.

We Paid Off the Mortgage: Our Debt Free Journey

Anyway, that’s our story. I’m sure there will be future related posts with more details around “the how” of paying off debt. I’ll do my best to jazz up the immensely boring process of paying off debt for seven years. Here’s a sneak preview: avoid lifestyle inflation, automate your finances, increase income, and stay disciplined. The concepts are simple, but the doing is hard.

I’m sure a few weeks or months from now being mortgage free will hit us, and I’ll probably tweet about it or something. With all that being said, I’d like to close by saying…

FREEEEEEEEEEEEDOM!!!!!

26 Comments

  1. Love it!!! Well done. This is amazing. Being debt-free is a huge goal for my wife and I. We only have our mortgage left as well, and I can’t wait to have it gone. Thanks for sharing.

    1. Thank you, Chris! I look forward to seeing a similar post from you in the future. How much do you have remaining??

      1. We have about six years left on our accelerated payoff plan. If I’m still blogging then, you’d better believe it’ll be a grand post. 😀

  2. Congratulations! I can feel the freedom oozing from this post! We are in the midst of doing this right now. Our mortgage is the only debt we have, 3 years 10 months left, but we will hopefully be making some lump sum payments and getting it done sooner. We are also putting renos on hold, our home is quite dated, but we don’t want to take on more debt when our house is perfectly functional for the time being. Plus, a major reno with young kids seems daunting, so the timing should work well for us. Congratulations again, this is motivating!

    1. Thank you! Three years is nothing. With focus you’ll have it paid in no time. Good luck to you!

  3. Congratulations! I am so looking forward to the day when we have our cabin mortgage paid off. You are absolutely right about the payoff process being boring. We’re about 18 months into the process and I find it’s very easy to lose focus. I know we’re making progress, but it just seems to drag on and on.

    1. It is so boring but in hindsight the time goes by so fast. Your day will come as well. Best of luck on your journey!

  4. Congratulations! There is so much debate out there of whether to direct extra money to paying off the mortgage versus investing in it. I took the paying off mortgage route and it was the best decision, even though I know I left money on the table had I invested it in what turned out to be an amazing bull run in the market. However there are so many non monetary rewards for being debt free that outweigh the money I left.

    I actually wrote a post on my blog called, “Every Blade of Grass” that tells of my journey. It is an amazing feeling when you own every blade of grass on your property and not the bank.

    Now all the capital coming into my household is mine and not earmarked for some lender. I’ve been using it to build capital so my money can earn money for me.

    1. Thanks! I’ve yet to ever hear anyone who says they regret paying off their mortgage. The behavioral benefits far outweigh having a few extra dollars in investment. Feel free to link to your related blog post so I and others can check it out.

  5. Congrats! If I were envious, I’d have to decide if it’s for the paid off mortgage, a few years break from teaching, and/or the trip to FinCon- lol, but I have similar goals in sight so it’s just an encouragement to keep at it and make it happen! Freedom and choices… worth all the sacrifice!

    1. Thanks! All the hard work is paying off. A few years ago we probably wouldn’t be doing any of three but it’s amazing the doors that open as we get closer to being financially free.

  6. This is encouraging. We are currently paying off student loans but our house will be next! Trying to keep our eyes on the prize.

    nerdymommyof4.com

    1. The most important thing is keeping focus. Paying off debt is boring and requires a lot of discipline. It sounds like you are very much on the right track so keep it up!

      1. Thank you for the encouragement. I am weird, I think the challenge is actually pretty fun! I have always been naturally frugal.

  7. We paid off out mortgage last year. It was an amazing feeling and we have no regrets about it. Even though it is just simple math, I think we are even more surprised at how much higher our monthly savings has been without the mortgage. It was definitely an unappreciated outcome.

    Congrats on your accomplishment!

    1. That is awesome. Congratulations! My wife stepped away from her teaching job right around when we made our last mortgage payment, so we’re getting used to a lot of changes. We also had our second child in March so we are definitely adjusting. Hopefully we can continue to push up our savings rate without the mortgage even on only one income.

      Did you all do anything exciting to celebrate paying off your mortgage?

      1. Honestly, we never even thought about doing something special to celebrate paying off the mortgage. I think for us the “celebration” was knowing we had one less large payment to make each month and that our savings could increase even more.

        We were in a similar situation as you. Paid our mortgage off in March and DGal quit her teaching job at the end of June.

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