Somewhere in the swirl of a pandemic, long overdue protests, and a slew of personal ups and downs, we paid our taxes. We also made a really exciting discovery during the deepest financial dive we do all year. A money milestone that I’ve been pursuing relentlessly unfolded: we could pay off our mortgage.
But we haven’t.
This isn’t precisely a new milestone. We’ve had an extra beefy emergency fund for years. And for years, people have tried to convince me to put it to work somewhere. Invest, consider real estate, pay down debt. Truthfully, our emergency fund worked harder than anyone ever gave it credit for. When the economy hit the skids a few months ago, we knew we could push through largely unfazed when it comes to our finances thanks to that fund.
What made our tax-time discovery really exciting, though, is that we realized our mortgage balance was dropping low enough that we could actually pay it off and still have a year’s worth of expenses covered.
It was truly thrilling. We could be debt free and still come away with an emergency fund that many other people would consider sufficiently funded.
But now, after working toward this mortgage freedom goal since the moment I realized mortgages were debt, I’ve stopped.
Here’s why we pushed pause and when we think we will actually submit that final payment.
Why We Aren’t Paying Off Our Mortgage Quite Yet
There’s no one single reason that made us hesitate on our quest to be mortgage free. In fact, there are dozens of ideas we’ve mulled over. These are the big three reasons that we decided to wait a little longer for the virtual confetti storm.
Pandemics Mean to Expect the Unexpected
We are still in the midst of a pandemic. I’m stating it because there seems to be some confusion judging by the volume of the house party two doors down. While no one could have anticipated the start of this pandemic, I think it’s foolhardy to pretend it’s over. Of course, I certainly hope it’s under control and we’ve weathered the worst of it, but I’m choosing to keep my eyes wide open. That means I know these uncertainties aren’t going anyway.
Unlike millions of other Americans, my husband and I are both in the incredibly fortunate position to know–barring catastrophe–we will both collect our income for another school year. However, education is not nearly as stable as many people believe. Of course, teachers early in their careers are much more vulnerable. But in cases of deep economic turmoil, there are cuts that will impact virtually everyone. Based on when budgets are approved and when funding does (or doesn’t) show up, the impacts don’t ripple through education right away. But make no mistake about it, they’re coming.
Earlier, I said that my husband and I both have jobs for this year barring catastrophe. While it wasn’t declared a catastrophe, this past school year ended with an Act of God and a State of Emergency. Our governor pushed to ensure that school staff received their salaries throughout remote learning. However, our district pushed back hard on extra duty pay. It wasn’t a deal breaker for us, but my paychecks came up over $100 less (after taxes!) than originally expected each payday. If, for whatever reason, we find ourselves in the position of remote learning again, I am not certain what our income would look like.
The Cost of Owning a Home and Being a Parent
Houses and kids are expensive. Thankfully, we only have one of each. If we paid off our mortgage tomorrow, we could cover a year’s worth of typical expenses. But that doesn’t account for things like losing both jobs and having to pick up insurance on the exchange or take COBRA. It also doesn’t account for a year’s worth of regular expenses coupled with new windows or newly discovered health conditions.
Given the din of uncertainty that is hovering in the background, I don’t want to put ourselves in a position where we no longer feel like we could do what was best for our child. We also don’t want to unearth a big issue with our house and have to make do with temporary fixes until we can afford a real solution.
Looking Out for Others
We are not the most generous people I know online or in real life. Still, giving always has been important to me, and it’s something I’m proud to have been able to maintain these past few months. In fact, one of the only things that has given me a small sense of control and voice when looking at the challenges facing our country is giving.
I feel a bit better is to know that I can participating in giving challenges and donate to GoFundMe links and support other charities without having to worry about where the money is coming from. In addition to not wanting to skimp on peace of mind for our family and our home, we also want to be able to continue to freely support our community.
When We Will Pay Off Our Mortgage
When we first started this quest to be mortgage free, we were not even close to pulling in a combined six figures. In my wildest dreams, I thought it would be fantastic to be debt free by 40. That would have meant shaving off 17 years on a 30-year mortgage.
Our expenses have gone up now that we are a family of three. But our income has as well. Now, we’ve crested that combined six figure mark, thanks to me doubling my teacher salary and my husband growing his as well. That means my most recent wildest dream is to pay off our house when I’m 35.
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Based on what is sitting in the bank right now, it seems shockingly possible. We will continue to make our regular monthly payments, adding extra payments whenever we can. Once the balance is small enough, we’ll wipe out the rest. Depending on how generously I interpret my goal, we have 10-20 months or so to figure it out.
While I expected to feel frustrated and defeated even when we made the decision to wait, it feels anything but. We could erase our mortgage if we wanted to or needed to. Knowing that we can wade through the unexpected mostly financially in tact seems more important, at least in this moment.
So Tell Me…Do you think we should be itching to pay it off? Are we better off waiting? What are you doing with your debt or your money goals at this moment in time?