The most expensive item most of us will ever pay for is our home. When tackling a debt so large it can be difficult to keep up motivation to stick with it. Even an aggressive plan can take a decade in practice and keeping up motivation over that period of time is a lofty prospect. I’m about 3 years into my plan to pay off my mortgage and I have a few tactics that are working well for me.
1. Automate: Every month an extra $200 comes out of my bank account to pay on my mortgage. I don’t have to take action, I don’t have to think about it, it just happens. This alone is doing the heavy lifting of taking 15 years off the timespan of my loan. I purposefully chose $200 because this was the difference between a 15 year and a 30 year amortization. In addition to the automation I make it a habit to put the extra money I accrue in my bank account over my emergency fund limit on the mortgage at the end of each year.
2. Track Your Progress: I built my house payment spreadsheet to project mortgages and asssist with tracking the early payoffs of a mortgage. There are a few online tools that let you enter in a fixed amount and they will show you how much time you will take off your mortgage, but they aren’t very flexible. With this spreadsheet I can enter a different value for extra payments made every month and at the top of the sheet my spreadsheet tracks how much interest I have saved and how many months I have taken off my mortgage. So far I have taken almost 4 years off my mortgage and saved over $15,000 in interest with my extra payments. Knowing how much interest I have saved and how many months I have taken off my mortgage to date helps keep me motivated because it gives me a win every month.
3. Associate With Others Who Are Paying Off Their Mortgage: Perhaps the best way to stay motivated while paying off a mortgage is to surround yourself with other people with the same goals. This works well for people who are trying to lose weight, quit drinking, or quit smoking, it can work well for those pursuing financial goals as well. If you don’t have any friends or family members who are pursuing a mortgage payoff, follow some bloggers who are. Seeing other people be successful through their struggles is a great way to stay motivated while paying off your mortgage.
4. Reward Yourself: When I hit major milestones I reward myself and my family with something special. I’ve broken my mortgage up into $25,000 chunks. Everytime we eliminate a chunk we go do a special activity. This winter when we break $75,000 we will be going to an indoor water park for the day to celebrate.
5. Start With A Small Mortgage: The smaller the mortgage is in relation to your income to begin with the easier and quicker it can be paid off. Under current lending regulations you can buy a house that costs over 4 times your yearly income. By buying well below your means and keeping this number to only 2 times your annual income you make paying off your mortgage much easier.
Are you working to pay off your mortgage? What have you done to stay motivated?
About the Author: John C is a nuclear power plant contractor and personal financial blogger at Action Economics with a goal of reaching financial independence by age 45.He lives with his wife and 4 rambunctious boys in beautiful southwest Michigan.