No, I haven’t crossed over to the dark side. Yes, I still think there’s incredible value in being mortgage free. But for the past few months and into the foreseeable future, we pushed pause on our debt payoff plans.
While I initially expected to feel a lot anxiety about this decision, I’m surprisingly resolute.
Because this is so unlike me, I thought it might be worth sharing in case anyone else finds themselves in a situation where they put debt payoff plans on hold.
Money Is More Than Math
Many people argue that paying down low-interest debt is a fool’s errand. There’s more money to be made in the stock market. Let your money work harder. Rinse and repeat.
That’s true from a mathematical perspective.
But money is never just about math. Not on this blog, and not in real life. There’s no question in my mind that a paid-off home would be more comforting to me than my IRA balance if I lost my job.
How do I know? Well, I lost my job twice, and let’s just say that looming payments did not help me sleep at night.
There are emotional and psychological sides to money, and there’s real value in heeding advice to Know Thyself. I know me. I am a ball of anxiety on a good day, so the more in control of my finances I feel, the better my quality of life.
Plus, it’s not like I’m not also investing.
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It Came Down to The Numbers
But in this case, math trumped psychology. Why? The short answer is that in a few months, there simply aren’t going to be enough dollar signs to go around.
I know that I’m coming up on an unpaid leave. I know that I’m the breadwinner (though not by much anymore).
As a result, we are dialing back the debt pay down. Instead of trying to double or triple our mortgage payments–or even just ditching the mortgage altogether with some (a lot?) of our savings–we are stockpiling cash and contributing a bit to retirement, too.
Maintaining Momentum
I still have grand plans of living in a paid off house by the time I’m 35. Maybe they are grand delusions.
But because I’m unwilling to let go of this goal, we decided to pay just a bit extra each month.
In a way, it hearkens back to the start of our debt payoff journey. At a time when it felt like we were trying to move six figures of debt with a toothpick, we started by paying just a few extra dollars per month. Gradually, we ramped up from there.
So now, we round our mortgage up to $1000 each month. That means we’re throwing in an extra $40 or so.
While this progress feels negligible, knowing that we are doing just a bit more than we have to feels like exactly what we need to keep the momentum going. And why shouldn’t it? That little bit extra is what sparked our mortgage payoff journey to begin with.
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Not Worrying About What Ifs
We are trying to lean into financial uncertainty, teasing out excitement rather than fear.
But the truth is that my brain does a magnificent job what if-ing its way through every situation, every decision. It is especially talented at this in the moments before I fall asleep.
While I haven’t found a cure to stop my brain from overthinking, I am simply giving myself less opportunity to worry about the what ifs. Instead, I’m focusing on the current path we’ve chosen. We have a rationale behind our decision, and we also know that no money choice has to be forever.
While our debt payoff plans are paused now, they won’t always be.
That might mean finding mortgage freedom at 35. Or it might be months or years after that. Rather than look at our current situation as being at odds from where we are aiming to go, we are acknowledging the need to pause on our journey right now. This break might be just the thing we need to accelerate across the finish line.
So Tell Me…Have you had to push pause on any financial goals lately?
Hi Penny! Yes!! Money is so much more than numbers. I love how you’re paying just a little bit more each month. Even if it won’t dramatically change the timeline it helps change the way you feel about it. We have also been talking a lot about our mortgage in this house and are going to actually clear the last 35k from the bank. There are numerous reasons for this. The biggest is actually job loss. If I were to lose my job, we’d be able to survive 100% on Mrs. Gov’s salary if our house was paid off. Knowing that I wouldn’t need to find another job again soon (or maybe at all!) if I were to lose my job is a huge piece of mind. (But also- it’s still the same 35k sitting in investments or paid to the bank, but somehow one feels so much better than the other).
I think you’re wise, there are more uncertainties coming right now. The economy could go through a lot of changes this year. We decided to not pay extra on our (low-interest) mortgage but add extra to pay off some needed home remodeling that we had to finance. New roof! We are paying lots extra on that, have paid off all credit cards but have stopped adding to savings until the roof is paid off. We will focus on adding to the mortgage payments after that. Thats the plan that helps me sleep at night!
This is a very inspirational, yet highly sensible, decision. Cash for coping with an unpaid leave is an excellent reason to pause the extra payments! You’re still going to achieve a major financial milestone at a VERY young age.
I’m looking at the end of paying off my debt and it’s so hard to stick to the plan and not pull the trigger with savings & face the uncertainty. But I also know that I sleep better with a slightly larger cushion than certain gurus from Tennessee suggest during the paydown phase.
I have to renew my commitment to focus more on investing than on mortgage payoff every single year. Maybe even every quarter because I loathe debt so much but even with two good salaries, our mortgage is just too big. We can’t both aggressively pay down the mortgage AND invest enough to meet our goals. We have to pick one and only do a little of the other.
So as much as it chafes, we have similar plans!
I did the exact same thing when we were about to have our second (congratulations by the way!). I remember feeling really guilty about lowering our extra payments toward student loans and our mortgage. It’s so ridiculous to think back on it now, because we really did need that extra money since Ashley was going to be working part-time for a while after her maternity leave.
Now that our kids are older and done with daycare, we’re back to paying off the mortgage at an even more significant rate than we were before.
You are in a good place financially, and it makes more sense to have cash on hand. Having a paid off house at age 35 is super ambitious and adds unnecessary pressure. I think you will be well ahead of the pack if you pay off your mortgage by the ripe old age of 40! 🙂
There’s nothing wrong with holding back from a mortgage payment. The qualitative effects of the psychological aspects of paying down a mortgage is sometimes greater than the quantitative effects of paying off the mortgage itself.
Plus, mortgages have one of the lowest interest rates anyway.