Archives For early mortgage payoff

Big Goals

When it comes to setting goals, it’s easy to simply dream about things you would like to do or achieve.

If you don’t make the goals realistic or manageable, they just stay dreams.

I’ve always set SMART goals to turn dreams into reality.

SMART goals are:

Specific

Measurable

Attainable

Relevant

Time Bound

In May of this year, we set a big goal to pay off our mortgage in 5 years (by May 2020).

This goal fit with the SMART goals formula:

Specific – We want to pay off our mortgage in 5 years.

Measurable – Pay off the balance of the mortgage.

Attainable – We knew discipline, frugality and a bit of creativity, this was a realistic goal for our family.

Relevant – We feel like this is a very relevant goal since our mortgage is our only debt and we want to be completely debt free.

Time Bound – We want to do this by May 2020.

We started out very excited and felt like we were working towards an achievable goal. However, since it was such a big goal (knocking out thousands and thousands of dollars in debt), it felt like we weren’t making any progress.

So, we broke the goal down further. In July (2 months into the process),  I divided the amount we owed on our home by 58 months (the time remaining until May 2020). This gave us a monthly goal to work towards.

Having the monthly goal makes our big goal very doable. Each month, we have a specific amount we’re working towards paying off. Reaching this amount each month is still a bit of a stretch but we hit the monthly goal in July, August, September and October!

Working towards the monthly goal keeps the momentum going. Each month that we reach (and sometimes exceed) our goal, we are excited which encourages us to keep going. While it’s fun to see the big number go down, it still seems to move slowly so it’s more fun focusing on the monthly goal than on the total principal that we still owe.  

Do you have financial goals you want to achieve?

Maybe you want to pay off debt, save an emergency fund or start a college fund for your kids. Or maybe you need to finally sit down, create your budget and set financial goals.

 

 

Mortgage Payoff Goal

Writing down goals is powerful and sharing those goals creates accountability.

We’ve been pretty open about our finances because we want to encourage others that it is possible to live well on one income.

We recently set some new financial goals with our big one being to pay our mortgage off early.

In March of 2011, we purchased our home. We put 20% down and financed the rest with a 30 year mortgage. We started making extra principal payments soon after we moved in, with the hope of paying off the mortgage earlier than 30 years.

We refinanced in early 2013 to a 15 year loan with a 3.25% interest rate. The monthly mortgage payment only went up $80 by doing this.

We strategically started paying $300 extra towards our principal each month because we didn’t want to be saddled with a mortgage for 15 years.

In late 2013, we stopped making extra principal payments and started saving the money because we wanted to make some improvements in our kitchen and laundry area. Thankfully we had that money saved because in early 2014, we had to replace our septic field lines (the joys of home ownership, our kitchen and laundry still haven’t been updated!)

Then in April 2014, we put our home on the market and continued saving the money that was budgeted as extra principal money.

Once we decided selling our home wasn’t the best move for our family, we stopped making the extra principal payments – we saved most of it but we also started dipping into that money for other things.

We started to have the attitude that since we’re living in a very affordable home, we can live a little and spend our money a little more freely. We lost sight of the goal of paying off our mortgage early.

In May 2015, we attended a Financial Learning Experience at our church led by Joe Sangl of I Was Broke, Now I’m Not.  We left the event ‘fired up’ again about our personal finances!

We took some time and wrote down some personal and financial goals for our family at the end of that weekend.

The big goal that we set was to pay our mortgage off in 5 years.

This is a bit of a stretch goal but we’re excited about the challenge and focused on achieving our goal.

To be honest, our 5 year goal looks impossible on paper but we know with a little creativity, frugality and focus we can reach our goal.

In the coming months, I’ll be updating you on our progress for accountability, sharing details on how we’re planning on paying off our mortgage in 5 years and posting about different ways we’re saving money to help us reach this goal.

*We’re sharing our story and this goal in a hope to encourage you in your quest for debt free living! We all have different circumstances due to consumer debts, student loans, mortgage amounts and income levels but we all can take steps to improve our finances. Setting financial goals is a great way to motivate you to work towards paying off debts, living within your means and inspiring you to set big goals, like paying your mortgage off early. No matter the state of your personal finances, you can take steps to turn things around!