2696: [Part 2] We’re Mortgage Free! Our 10 Steps to Get a $500,000 Paid Off House in 5 Years by Andy Hill of Marriage Kids and Money

[00:00:00] This is Optimal Finance Daily, Episode 2696. We're mortgage free. Our 10 Steps to Get a $500,000 Paid-Off House in 5 Years, Part 2, by Andy Hill of MarriageKidsAndMoney.com.

[00:00:14] And I'm your host and personal finance enthusiast, Dianna Merriam.

[00:00:18] Welcome back to Optimal Finance Daily, where I read to you every single day of the year, sometimes longer posts, which is the case today.

[00:00:25] It's actually a continuation from yesterday, so if you haven't done so already, I'd recommend listening to yesterday's episode first.

[00:00:32] But if you're all caught up, then let's get right back into it and hear Part 2 as we continue optimizing your life.

[00:00:42] We're mortgage free. Our 10 Steps to Get a $500,000 Paid-Off House in 5 Years, Part 2, by Andy Hill of MarriageKidsAndMoney.com.

[00:00:53] 6. Increase Your Income

[00:00:56] Even with all of our cord cutting and grocery trimming, it was getting more difficult for us to live on one income and still pay this mortgage off in less than 5 years.

[00:01:05] And after all, you can only cut back so much. With income on the other hand, the sky's the limit.

[00:01:11] We did the following things to increase our income during the mortgage payoff process.

[00:01:16] Sell stuff around the house.

[00:01:18] Clothes, electronics, unused gift cards, purses, bikes, and even my prize moped was sold. It was time. I hadn't driven it in a year.

[00:01:27] It's truly amazing how much stuff we accumulated in our house that we didn't need or didn't bring us joy.

[00:01:33] Turn the trash into cash, right?

[00:01:37] Kick butt at work.

[00:01:39] I worked in sales at the time. If I crushed my goals and I was rewarded with a bonus, I went into overdrive for the last couple of years and it paid.

[00:01:47] Those bonuses went straight to the mortgage principal as soon as they came in.

[00:01:52] Start a blog to stay motivated.

[00:01:55] During our mortgage-crushing journey, I started a blog and podcast that chronicled our family's path to mortgage debt freedom.

[00:02:01] I've been able to help people on a similar journey and make some money while doing it.

[00:02:10] Lucky number seven here is probably the most important success in my eyes.

[00:02:14] The collaboration that my wife and I had during this process was incredible.

[00:02:18] I'm so proud to be married to Nicole. She's a true partner.

[00:02:22] Okay, enough lovey-dovey. Get to the details, Andy.

[00:02:25] On the first day of every month for the last decade, Nicole and I have used Mint to plan our household budget.

[00:02:31] We review our spending from the previous month, allocate our dollars for the current month, and review our goals for the future.

[00:02:37] We dub this meeting our budget party.

[00:02:40] Well, I called it that originally to get Nicole excited about joining me.

[00:02:44] I added pizza, beer, and wine to the party, but she saw right through me and my marketing tactics.

[00:02:49] She eventually joined the party after some gentle nudging.

[00:02:52] Today, she's the one keeping me on task.

[00:02:55] The budget we create together is a zero-based budget.

[00:02:58] This means that every dollar we have has a job.

[00:03:01] For example, if we have a $5,000 monthly income, all $5,000 of those dollars will be allocated to spending, saving, investing, etc.

[00:03:10] If we didn't tell those dollars where to go, they'd magically float away.

[00:03:14] You know what I'm talking about, right?

[00:03:17] Number 8. Remember to have fun.

[00:03:19] With our tighter mortgage-crushing budget, we didn't have a lot allocated for fun, especially vacations.

[00:03:26] We decided that we'd take advantage of travel rewards for some free or inexpensive travel.

[00:03:31] Between my work travels and our responsible credit card usage, we were banking some solid travel rewards.

[00:03:37] During the mortgage-free path, we traveled to New York for a romantic getaway weekend on travel rewards.

[00:03:43] Flights and hotel would have cost us $1,500. We paid zero dollars.

[00:03:48] The year after, we traveled to Fort Lauderdale for our anniversary.

[00:03:52] Yep, travel rewards paid for that one as well.

[00:03:55] We even traveled to Cabo San Lucas with our entire family for just $300.

[00:04:00] I'm not saying that using credit cards is for everyone.

[00:04:03] Credit cards can be dangerous and can ruin you financially.

[00:04:07] Nerd Wallet reports that the average US household that carries credit card debt has a balance of around $6,000.

[00:04:14] For those who can live on a consistent monthly budget and are extremely responsible with their money,

[00:04:18] they might as well enjoy the perks that come from credit cards.

[00:04:21] If you consistently carry a credit card balance and have trouble making your payments,

[00:04:25] I'd highly recommend paying with cash or a debit card.

[00:04:29] Number 9. Celebrate the wins.

[00:04:32] Four years is a long time to wait for a big goal. We decided to celebrate along the way.

[00:04:37] When we went below $100,000 on our mortgage balance, Nicole and I went out to a nice dinner to celebrate.

[00:04:43] We ate at our favorite restaurant and enjoyed some champagne to commemorate this milestone on our journey.

[00:04:49] And on the big mortgage payoff day, our family of four went to the bank together.

[00:04:53] We took a picture as a family and went to a local diner to celebrate.

[00:04:57] My three-year-old had an epic meltdown in the restaurant because his jacket wouldn't zip.

[00:05:01] But hey, not everything can have a storybook ending.

[00:05:05] And number 10. Dream about the future and make changes.

[00:05:09] Now that the mortgage is gone, a lot has changed for our family.

[00:05:12] With our additional money, we decided to make some changes.

[00:05:16] Give more.

[00:05:17] We increased our giving from 1% of our take-home pay to 10%,

[00:05:21] with 5% going to charities and causes we're passionate about,

[00:05:25] and another 5% to family, friends, and neighbors in need.

[00:05:28] It's our own form of 10% giving.

[00:05:31] Live more.

[00:05:33] Vacations are something that our family loves.

[00:05:35] Another 10% of our take-home pay goes to vacations each year.

[00:05:39] We love the fun and the sun and want to make it a permanent part of our family budget.

[00:05:44] Work less.

[00:05:46] Both my wife and I left our corporate careers and are now pursuing work we enjoy instead of work we have to do.

[00:05:52] My wife went back to school to become an esthetician.

[00:05:54] She loves helping people and having a flexible schedule as well.

[00:05:58] I said goodbye to my sales job, and now I'm a podcaster part-time.

[00:06:02] We don't need as much money to live now, so I'm working fewer hours each week.

[00:06:06] It's been great for my health and my overall well-being.

[00:06:13] You just listened to part 2 of the post titled,

[00:06:15] We're Mortgage Free! Our 10 Steps to Get a $500,000 Paid-off House in 5 Years

[00:06:20] by Andy Hill of MarriageKidsAndMoney.com

[00:06:24] and I'll be right back with my commentary.

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[00:08:16] I think paying off a mortgage early is a similar process to getting out of any kind of debt or pursuing any financial goal.

[00:08:23] You have to focus on increasing the gap between your income and expenses and then throw that gap at your goal.

[00:08:30] This requires patience and staying focused.

[00:08:34] Andy offered some great strategies in this article to help keep your eyes on the prize.

[00:08:37] And I like how he got the whole family involved.

[00:08:40] Another tool to help stay focused and keep your goal top of mind could be a financial goal coloring sheet.

[00:08:46] Every time you make progress towards your goal, you color in a portion of the picture.

[00:08:51] Coloring in sections of a goal sheet as milestones are reached provides a tangible and satisfying visual indication of progress, which can boost morale and motivation.

[00:09:01] Keep it in a very visible place in your home, and it's a great way to document your progress and have a tangible reminder of your goal.

[00:09:09] But that's going to do it for today.

[00:09:11] Thank you for being here and listening every day.

[00:09:13] And I'll see you tomorrow with more optimal finance daily where your optimal life awaits.