Paying off our mortgage early was easily our best personal finance decision. On our daily walks or weekend road trips, we get the chance to reflect and express gratitude for the freedom and flexibility we have as a result of downsizing.
In the midst of one such walk, I penned this list, which I hope motivates others. Know that there is life after paying off a mortgage. It might seem like a long road, but there IS hope. 🙂
1. Location Independence
Now that our house is paid off, we have a lot of choices. Maybe too many. HA!
We can choose to stay here in Lancaster County and enjoy all the amenities that this area offers us in the time leading to financial independence. Seriously, Lancaster is awesome. Friendly people. Great ethnic restaurants. Mild weather for most of the year. Makerspace. Year-round action verbs. Lots to offer a couple of outdoor enthusiasts like us!
We could sell or rent the house and relocate. Taxes are…problematic. Not as bad as some states, but still. As we work to grow our income in an effort to achieve FIRE, taxes will be on the list of “cons” for staying in PA.
We could rent the small house and then embark on an epic road trip across the US. Who says that we have to achieve FIRE before we start traveling? Why not try a mini-retirement on for size? The small house (should) be here when we get back, if we wanted to come back to PA.
We could rent the small house and then travel the world from one house sitting gig to another. Sas and Ang from Mostly Mindful are farm/house sitters right now and their adventure made us pause and consider the assumptions we had regarding pre- and post-FIRE life. (More to come on this front in the coming months.)
Because our house is portable, we could also move it to a new location (within reason). Since the house is manufactured, it isn’t permanently affixed to its foundation. If we chose to stay and move our small house to a bit of land in a rural area, we could take it a reasonable distance, but certainly not across the country should we choose to relocate. We have too much wanderlust to really think about settling down again, but it’s too early to rule anything out.
Bottom line is…without a house payment, we are more location independent than we were before.
2. Retirement Investing
We reallocated the money we spent on our mortgage payment, so we’re contributing the max to our tax-deferred retirement contributions.
Related: How We Manage Our Money
3. Side Hustle Spending
Since we put together our 2017 budget, things have changed; we’re spending more, but with intention.
We increased our discretionary spending so that we had a little more cash to do things we enjoy. Garrett pays for a membership to the local makerspace, which is where he has been making progress on his super secret side hustle. I’ve got a few new side hustle projects myself.
Without a mortgage payment, we can invest a little in our side projects and hobbies.
4. Long-Term Care Planning
Worst case scenario, something happens to either of us, we have a house to call home. Of all the benefits of paying off a mortgage early, this might be my favorite.
Losing Dad unexpectedly left a lot of questions for us about long-term care planning. Paying off our mortgage early was a relief because we know we’ll always have a roof over our heads, no matter what happens. Our small house is located near Penn Medicine and Johns Hopkins, which are renowned for excellent care. And NYC is just 3.5 hours by train.
5. Travel Spending
Since we downsized, we have far more free time, so more time to travel. Even if it’s a day trip to a new state park or flights to see friends in Texas, we have more flexibility to make it happen.
On of our goals in paying off all of our debt was to have more cash to travel. Not knowing what the future holds, we want to use the best years of our life wisely…traveling to other places, experiencing other cultures, making new friends, and lots of action verbs.
6. Emergency Fund Saving
Paying off debt helped us ramp up our emergency fund efforts. While we were in debt, we didn’t keep much of an emergency fund or emergency currency on hand. Without a mortgage payment, we’ve been able to save nearly a year’s worth of cash to cover basic living expenses.
7. Time
We feel like we have more time to figure out the other half of our two-part personal finance journey: FIRE.
We’re not changing our goal; we still want to claim financial independence by May 18, 2019.
No longer do we feel rushed to figure it out right now. Folks who are financially independent today did so in a variety of ways from index funds to dividend investing to real estate to building and then selling businesses.
Being debt free simply made it seem like there is plenty of time to figure out our path to FIRE. I don’t always feel like we have lots of time because that scarcity mindset creeps in, but I do my best to reframe my thoughts to have an abundance mindset.
8. Perspective
The last two and half years showed us that massive change is possible and even more change is also possible. We’re met amazing people who are working their way to debt freedom, FIRE, and even a few folks who are financially independent. No matter what the goal, a change in perspective is possible (and necessary).
9. Clutter
Clutter covered up the frustration and dissatisfaction we felt in our daily lives. Downsizing forced us to confront our stuff and our feelings about what we were doing with our lives. Having a smaller house meant having a smaller mortgage payment, but more important, it forced us to get rid of the mental and physical junk holding us back from what we really wanted.
10. Health
We made a lot of excuses that kept us from taking care of ourselves. Lately, we’re taken to walking daily and kettlebell training. (Sometimes I remember to post pictures to Instagram while we’re walking.) Consequently, we’ve lost the weight we gained after high school graduation and we did that Tough Mudder. Health is a higher priority now, for sure.
11. Inspiration
We have folks write to us to say we’ve been inspirational. Wow! Inspired by us?! You are too kind. Thank you! 🙂
We will continue sharing our story, our journey to FIRE in the hopes that more will be inspired to start their own journeys. In December, we’ll also be sharing the personal finance journeys of others, so if you’re looking for even more inspiration, stay tuned!
12. Unplugging
We’re (slowly) undoing all of the damage from childhood and adulthood that programmed us into thinking about and living life a certain way.
Go to college, get debt, get a job to pay on debt, get more debt, start a family in debt…the advice/prodding was all crap.
It’s taken us a combined 25 years of adulthood to be able to unplug from the Matrix, to get out of the rat race, to stop the obsession with occupations, to return to our childhood aspirations. Mortgage freedom just put us one step closer to jumping off the corporate ladder.
13. Charting a New Course
What’s interesting about the days of future past is that we can move forward with all of the knowledge and experience we have now, but without the debt, stress, worry, or need for identities defined by occupations.
Today, we can be who we were before, taking with us only the wonder and amazement and desire to learn that we had as children and chart a course for the future.
P.S. Close to paying off a mortgage? Wondering what to next after you paid off your mortgage?
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| P.S. If you want to downsize to a smaller house or a "tiny" house without taking out a loan or a mortgage, consider Unison. With Unison, you can take equity out of your current home and use that money to downsize to another house so that you don't have to take on a loan or another mortgage. No monthly payments. When you sell your current home, you pay Unison back. See if you qualify for Unison or read my Unison review. Thanks for using our affiliate links to support our blog! |
Awesome – the only one in the list that kind of surprised me was the emergency fund. I’m of the mindset that if I don’t have to cover a mortgage payment, I can DECREASE what my emergency fund is and allocate some of that cash back to something else; side hustles, just invest, whatever…interesting you guys took the opposite route. I will admit, having nearly a year’s worth of cash AND no mortgage, I imagine, would be an amazing feeling; you’ve got a ton of flexibility now.
And for me that’s what it’s all about – flexibility. We just closed on our home this month so have quite a ways to go on our mortgage, but once that’s gone we’ll be much more flexible to take jobs that we otherwise may not want to due to low pay; or volunteer, or basically do whatever we want.
We want to pay off our mortgage early even though all the math nerds say don’t do it…but I can’t deny that retiring without a mortgage payment is what we would feel most comfortable with. And we can time up both – so long as the market doesn’t suck – to be right around the same time. 🙂
Right now, I see mortgage freedom as increased cash flow 🙂 We are only a year in with our mortgage, but I am certainly motivated to add a bit extra so we can hit mortgage freedom early (currently during our son’s Senior Year of high school).
Right on! Increased cash flow is a great summary of this long post. HAHA! 🙂
Having no mortgage has definitely given us a sense of flexibility. We are considering traveling for 8 weeks this summer and then maybe doing a much longer trip. Not having a mortgage means we can rent out our home and that rent would cover 100% of our travel cost. =) It opens up a lot of options!
Love the plan! We realized that we didn’t include rental income in our travel plans, so now it’s like a teeny bonus. LOL! I’m excited to hear/read about your plan.
Thanks for the shout out Claudia! The freedom that comes with having no debt and being uncubicled is incredible. We’re loving the adventure of it all and we’re already noticing how many more life lessons are coming our way as a result. 🙂
Love it!! You’ve inspired us, for sure. We’re starting to get comfortable and if we’re comfortable, there’s little room for growth. Can’t wait to hear more about life on the farm!
PS Love the new logo! 🙂
Thank you! All credit goes to BroGoLogo. They’re fun to work with.
Yes. Definitely one of our goals is to pay off of our small mortgage. The recession set us years back and now my poor husband is 55. I’m 40. So I want to pay off the mortgage as a gift to him, both of us of course, but to have that so he can feel he owns something and maybe, just maybe he’ll be able to get a crack at semi-retirement.
What an awesome goal, Marleigh! I love it. I feel the same way about our FIRE journey. We have a number in mind that brings us close to FIRE and I feel like it’ll be the opportunity for Garrett to take a mini-retirement and figure out how he wants to spend the next 20 working years. Or maybe just enjoy semi-retirement. 🙂