Drumroll, please! Alright, alright. I don’t really need a drumroll since the title is one giant spoiler alert. Since you already know that we put over $30,000 towards our debt in 2017, let’s take a look at how two millennial teachers raising a newborn did it.
The Final Numbers
Just like in years past, this total includes payments toward the principal and toward interest. If you want a clearer picture of how things shook out, we paid just under $25,000 toward the principal and just under $6,000 in interest. What these numbers don’t show is probably even more significant than what they do show.
In 2017, we were still both teachers. Neither of us made anywhere close to six-figure salaries on our own. It was also the year that we became parents, and I took an unpaid maternity leave. That means that even though we had less money coming in we still managed to put more money toward our debt than we did in 2015 and 2016. Excuse me while I go find a really big horn to toot.
How We Paid So Much
Usually, somewhere in these huge debt payoff posts is the call to earn more money. I’ll be honest. It wouldn’t hurt. In fact, it’s probably the best way to slay debt. But that isn’t what we did. In fact, the tiny pay bump that I earned thanks to my annual raise (don’t get too excited; about 1%) and continuing my Master’s degree didn’t compare to what I paid in tuition. Never mind the almost $20,000 I lost out on by staying home.
So if we didn’t earn more money, what did we do differently this year? Truthfully, we operated out of a scarcity mindset and reaped the benefits of being overprepared. For the better part of 2017, we spent time creating a baby fund. Once the medical bills came and went, we were able to shift back into a perspective of abundance. After reexamining how much money we wanted to add to our emergency fund now that our household has another +1, we funneled the rest into the biggest mortgage payment we’ve ever made. It also didn’t hurt our bottom line that I side hustled up until an hour before my water broke. OK, fine. Technically, I was submitting drafts and sending in lesson plans from my phone in the intake room at the hospital. What can I say? Mama gots to get paid.
Why We Paid So Much
I hate debt. Specifically, I hate my mortgage, especially because for so long, it was debt in disguise. I’m also not a fan of paying interest. At all. I know some people like to argue that paying only the minimum frees up money for other investments, but we still managed to max out our Roth IRAs. And we aren’t wading into the rental property waters anytime soon because keeping a small human alive is maxing out my time and patience as it is. In short, this is what works for us in terms of the funds we have available and our money personalities. Don’t like it? Don’t worry about it. Unless you want to pay off my mortgage. Then, I’ll spend the dollars however you’d like.
Why We Aren’t Refinancing
Every month, I question if moving our 30-year mortgage to a 15-year mortgage would be the smarter choice. In fact, question isn’t the right word. I obsess over mortgage interest calculators, even though I already know the math would shake out since we pay double payments each month. In comparing the calculator results, there’s no denying the interest we would save switching to a 15-year mortgage. And you know how much I hate interest (because I just said it one paragraph ago and you are paying attention, aren’t you?).
But here’s the thing. I have come to really appreciate the flexibility that a 30-year mortgage affords us. We can increase our payments dramatically (Here comes the horn again…toot! toot!). We can also scale back and divert the money toward other goals like a baby fund. In a lot of ways, I have come to regard this 30-year mortgage as a second safety net. But don’t worry, I’m still doing everything I can to shake it off by my 40th birthday.
So Tell Me…What debt did you destroy last year? Would you refinance my mortgage if you were me? Do you love calculators as much as I do?