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Want to be completely debt free, including your house? Find out the key changes one couple made to pay off their mortgage in less than five years!
Pay Your Mortgage Off Faster
What would you do if you owed your home free and clear like Andy does now?
With no mortgage payment what options would open up?
There's a good chance you'd love to get rid of your mortgage, but the idea of getting rid of such a huge amount makes it seem impossible.
Forget paying it off in 5 years, you may struggle to even see a way to reduce it in half.
Right now median purchase price of a home here in the United States is $374,900. After going through the pandemic, home prices have increased by 16.2% since last year.
Now if you live in D.C., typical homes price to are around $690,000 with my buddies in California close behind at over $683,000 according to Zillow's Home Value Index.
In other words, buying a house is probably the biggest purchase you'll make.
It can also make the dream of paying it off early and becoming debt free seem pretty much impossible.
That's why I asked my buddy and Marriage, Kids, and Money creator, Andy Hill, to come on.
He's an awesome guy, really excited to get couples closer to their debt free goals.
Not everyone can exactly replicate what Andy and his wife Nicole did – we all have different circumstances – but there's a lot to their process that could make all the difference with you and your mortgage.
We want to break down how they did it so you can craft a debt free plan that fits you and your family.
In this episode, we discuss:
- why they were adamant about knocking out their mortgage so fast
- steps that were crucial to paying off their mortgage
- tools to help you be debt free faster
Hope you enjoy!
Speaking of Andy, we've teamed up with friends on a free Facebook community called Thriving Families.
It's a fun group where we share our wins and ideas with each other on how to thrive as a family. Come join us!
Resources to Dump Your Mortgage Faster
If you’re looking to dig in deeper for ways to pay your mortgage off faster, here are some resources to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Jumpstart Your Marriage and Your Money
- Grow Your Stash Faster: High Yield Savings with CiT Bank
- Marriage, Kids, and Money Podcast
- 5 Reasons to Choose a 15-Year Mortgage
- Mortgage Payoff Calculator
- Paying Your Mortgage Off Early
- Paying Off The Mortgage Wasn’t Our First Priority (but we did it anyway)
- How Steve Stewart Became 100% Debt Free (Including His Mortgage!)
Define Why You Want to Pay Off Your Mortgage Faster
Elle Martinez: If you are focused on paying off your mortgage and five years or less, you're not going to make the typical choices that most couples do.
It takes a real commitment to stay focused on this goal.
For Andy and Nicole, this was the first step in their journey.
Andy Hill: When we got together originally about paying off the debt, our big why for that was ‘Wouldn't it be great if you could stay at home and raise our children once we're debt free'?
That really got her excited about it and it got me excited about it too because for her to be able to spend that time with our kids and you know be there for them after school and things like that that was very important to her.
She did like her career but not enough to swap that for for staying at home and obviously it really depends on who you are as a mother.
I have some ladies that I work with at my career that see my wife's situation they're like That's nice that your wife does that. But man I don't want to stay at home with like so it's a personal preference right?
Your WHY is personal for you and then the mortgage. For me I think it would be really incredible when we were getting together for the why to say what if we never had to make payments again to anybody in such a large payment.
For us when we bought that house. It was a larger purchase for me, $350,000 houses, pretty, you know, pretty big.
So when we saw that price tag, ‘Sweetheart. I'll I'll do this, but man, I don't want to be paying a mortgage for 30 years and feel that, you know, weight on my back'.
Like, Hey, I have to keep earning like, you know, my income for a long period of time and I better keep performing, you know, I don't stop selling Andy, you know?
If I didn't have the mortgage, maybe the pressure in my shoulders would feel a lot less.
I mean my health is good and I have good ability at work to keep earning, but yeah, my major motivation was, you know, a stress thing. I think mostly stress and emotion to not have that monkey on my back for 30 years.
So you're able to do it before. And that was a big why for us. Then for her, I think, I think she wanted to feel that less stress with me when you bring your stress home from work.
It's not just you being stressed. It's your, it's your spouse as well? I like my job, but yeah, it's high pressure and you know, and I, I need to continue to perform or the income is not there.
So for me it was emotional and, and for her, she wanted to support me, which is great.
Deciding Between a 15 Year or 30 Year Mortgage
Elle Martinez: When they bought their home. Andy and Nicole were very intentional with how they were going to do that.
The down payment and the mortgage terms were built around this idea of paying off the house sooner, rather than later,
Andy Hill: Between a 30 year and a 15 year, there are obvious differences, right?
Your payment's going to be lower with a 30 year, but with a 15 year, you're throwing more at the principal each month. You're forcing yourself to pay this thing down as quick as possible.
I wanted that pressure. I'm crazy. I wanted that pressure because we wanted to pay this thing off fast. We didn't want to live with it forever and again, deal with that stress of having a mortgage payment for your whole lives.
So we chose the 15 year for the added acceleration of paying mortgage quicker, but also you get a break on the interest rate. If you want to be a little bit more aggressive between at the time, it was about a percentage difference between a 30 year and a 15 year. So we are able to, yeah, that adds up absolutely over.
I think I did a calculation out on one of my posts. If we were to go through the whole term. Alone. It would be about a hundred thousand dollars savings and interest between the 30 year and the 15 year. So that calculation alone, even though we didn't live the full term yeah. Was, was reason enough for me to not send more money to them.
Elle Martinez: You don't want to send them an extra like, well, I think you came up with like 92,000. You don't want it there.
Andy Hill: Yeah. Yeah.
Elle Martinez: Another key decision they made was keeping the mortgage payments at a certain level it's rule of thumb that we've used and found tremendously helpful. It means for us less stress when it comes to owning a home.
Keeping Their Mortgage Affordable
Andy Hill: Yeah. When I bought my first house I did the opposite. I was very house rich and super poor.
I was 22 and had no idea what I was getting into. I essentially bought a home with a mortgage that was 60% of my incomes. I don't know, you know, and, and, and shame on me for not understanding what I was getting into. But I guess, man, I really hope that there's more teachers in the mortgage industry than there are salespeople in the future.
And I know there has been a lot of changes from 2004 to 2018. We were at the house, but still, I mean, for me to get into that product at the time it was just not. Not something I should have been in at 22. So I wanted to flip that on the opposite side and I found through some research that that's a good barometer to still allow you to live your life and have fun and enjoy things that make you happy.
Be without just saying great, I got the house. Let's not do anything for the next 20 years because we can't afford it, you know? Yeah. Or you get the house and it's a big part of your income, but then you've got to furnish it to, you have to fix it. I remember getting the house when I was 22 being like, what is this gas bill I have to pay?
Or, oh, this thing, like air conditioning needs repair. What is all, you know? So home ownership is expensive and I don't think people understand it's not just the purchase price. It is all of the maintenance and repairs and the updates that you want to do, the things that you want to buy. And there's nothing wrong with that.
It costs money. So it's not just the mortgage payment, but you gotta think about the other costs. So 25% worked well for us. And I think it's a good barometer for folks.
Optimizing Their Budget
Elle Martinez: After taking these steps, it made it much easier to knock down the mortgage. And even though a 15 year mortgage is fantastic, Andy and Nicole saw it differently.
They were focused on getting rid of the house even faster. That meant they had to make drastic changes and look for big wins. First thing they did was examine all of their expenses.
Andy Hill: We set a date, we said, Hey, we're going to get this big house that you know, is essentially a type of house that our parents would have after we've grown up and been alive for a while.
So if we're going to do something like that so serious, then let's be as serious about paying off the mortgage. And we both agreed, and it was something that we were excited about. And yet we set a date for, for five years. With that, there was a little sacrifice. Because in order to pay off a mortgage in five years, you gotta pay it pretty aggressively.
So all of the extra, you know, that we had, essentially, we were living on 50% of our income at that time. So we made that decision consciously. After we decided to pay off our consumer debt in 2011. So pretty much from 2011, till today in 2018, we've been living on 50% of our income. It's just something we're used to.
Elle Martinez: It does take a lot of effort because you're going to be thorough and you're going to review all your expenses. And again, we're looking for big wins. So there are two starting places I would recommend. The first are your subscriptions. Jess, I'm looking at you cable, but really we tend to spend a lot more when it's a small, monthly.
For us, we looked at our expenses and saw that we could save a lot with our smartphone plans. By switching. For example, I have two lines with Republic wireless, and last month I paid about $45 for both. And I've been really happy with our service. We have friends who switched to ting and Google fi and they found no sacrifice in their coverage while still getting a better.
In those box subscriptions they're really popular right now. They can be another way to save. I'm not saying cut out all of these, but ask yourselves, are we still enjoying this? Are we still getting a value? If so, keep it. If not though, shop around, see if he can get a better deal or eliminate it. The other expense, this one's usually one of the bigger ones is your food.
Andy personally saw how much they could save by being savvier shoppers.
Andy Hill: We went from $900 a month and that might seem a lot for people for, with a family of four. We just weren't, we weren't being intentional about it when at $900 a month for groceries to $600 or even a little less than 600 a salary.
Yeah, they're alone $3,600 in savings just from groceries. And it's not that different. I mean, it's, the layout is different and that's about it, but we, yeah, we love all of them.
Growing The Gap Between Income and Expenses
Elle Martinez: but Andy and Nicole, didn't get to where they are by simply slashing their expenses.
Andy Hill: You can only save so much right at the bottom of the barrel at zero.
And the income limit is, you know, sky's the limit, right?
We started to think what are, what are some easy ways that we can continue to increase our income and live the life we want? So for us we had accumulated a lot of stuff over the past couple of years in our marriage that we really didn't need anymore.
So we said, Hey, look, Let's kind of walk around our house and we're kind of getting into this sort of minimalist kick too. I know it's been popular over the past couple of years and we like that. My wife likes to design with a minimalist fashion around the house. Less clutter makes her feel less stressed personally, too.
So for us, we started walking around the house being like. You know, could we sell that? Could we sell that Facebook marketplace is just like, awesome, because you can put things up there and your neighbors can get stuff that they want, and you can get things that you wanted a inexpensive price. So we started selling things like clothes, unused gift cards.
Nicole had a nice purse that she had in her closet that she hadn't used in five years.
We sold that I had a bike that I never used anymore. Cause if we had kids and I couldn't get out of the house, even had a moped that I had. You know, three or four years ago, and it was just sitting in the garage. So just things like that, we would sell that on Facebook marketplace or eBay and get some cash and we'd just throw it right at the mortgage.
And we kept piling things down that would allow us to pay down the mortgage, but also, still have fun in our. I decided to start a small business just for fun. That was a you know, sort of on a whim. Hey, I like personal finance and I like helping people with money. Why don't I write about it and start a podcast?
I started listening to shows like L's and inspired me to do something exciting with with my time. I've been able to make some money off of that. Mostly a lot of fun, but some money too. And with that, that's helped us to enjoy our lives a little bit better and, and you know, increase, increased my passion for something I'd like I like to do.
Lastly, the major one is just getting excited and motivated to hit a goal. I did this through just increasing my income at work. Over the time we side decided to pay off the mortgage [even faster].
I had an opportunity to switch to a new job that allowed me essentially to make an income that was a good year for me in sales at my previous job.
So it was great. It was stability. And and then the income as well. So also when I. Kick kick some butt in my job cause I'm in sales. If I exceed my goals, which I love hitting goals, I get rewarded for lot in here.
Again, when, when there's bonuses or promotions or things like that, that money would go towards the mortgage too.
That really helped us to, you know, increase our income, to continue to hit our goals.
Deciding on How to Boost your Income
Elle Martinez: Yes. Having a great paying job is a huge plus I'm not discounting that, but did you also notice that Andy took on extra work, both through his job and with a side gig?
Here's where you have to adjust things to your situation. For some couples putting in that overtime on a temporary basis is a good fit.
They love what they do and the pay can be fantastic, but that route may not work for you. It might be easier or better for your situation to look at a side hustle or freelance gig.
This is becoming a more and more popular option as people are looking for flexible ways to earn money on the side.
However you decide to do it is completely up to you.
f you're looking to knock out, your mortgage is going to take big wins. That means growing that gap between what you earn and what you spend.
Finally, however fast you decide to pay your mortgage, it's going to be a journey it's not overnight. So the two of you have to help each other out.
Money Dates, Budget Parties – How You Two Can Sync Up
Andy Hill: Early in our relationship, we started a tradition, which we called the budget party.
And when I say we, it was really me, I, I came up with the idea of the named budget party, mostly to lure my wife into doing something doesn't sound fun, but it can be freeing once you plan it.
What's your what, you know, what your spending is as well as, you know, talking about what your dreams are to say, Hey, where do we want to go? What exciting things do we want to do? And we dumped at the budget party. So we'd get some pizza, we'd have some beer and wine. And then as the kids started to come along, the, the, the, the beer, the beer and the wine probably actually increased a little bit just for sanity level.
No, I'm joking, but no, you do have to be inventive with that. So when the kids come along, you know, you're not going to be able to. Sit at the kitchen table and just have, you know, calm, quiet evening with your spouse. You've got to get inventive. So for us, we started going to like the local play place that had wifi.
So the kids would run around crazy while we're sitting there and working on our budget together. We've gone to coffee shops. We've even had date night where we bring the top of the receipt, a restaurant and just kind of spread them all out on the deck, you know, while we're there where people look at us funny, but we're like, Hey, we're good.
We're good. We're getting things done. And we're making. Our marriage. So for us, yeah, no, getting together on the first of the month, every month now for the past six or seven years has really made a major difference for us because it helps us get on the same page, not only financially, but also just like scheduling our marriage.
What are the things that we're going to do this month? Whose birthdays are, is it this month? Is there a wedding coming up that we need to save some money up for to give a nice gift? You know, these are the times that we get together, especially when your parents. Do you need to sit down and just carve out a couple hours to plan out your plan out your day, plan out your marriage, plan out the next 10 years, making sure you're heading in the right direction.
Sometimes, you know, if you're not doing that, you might, you could easily just kind of drift off into a direction that you both don't want to be in. So that focused time to do that has been really helpful for us.
Elle Martinez: There's no denying it. Paying off your mortgage is a huge win, but it's not an easy one.
However, Andy has a great take on how the two of you can succeed.
Andy Hill: Take it one step at a time. I mean, really it's, it's gonna feel daunting in the beginning. It's gonna feel not that easy. But when you break it down and I think the main main thing at the beginning is create a partnership with your spouse.
We're able to openly talk about the numbers and utilize a budgeting system that's exciting and easy to use. And it really lays out the numbers for you. Once you see the numbers and the path, it becomes a lot easier and you just set a date, a realistic date that works for you and your spouse. And if it seems too aggressive, then lighten it up because you don't want, you don't want to ruin the marriage aggressive goals.
I can tell you it's not worth it from the aggressive. No find a balance that works for both of you because your spouse might not be as excited about something like this as you are. If you've watched this whole video, I'm sure you're probably on the one side of the fence, but some, sometimes people have spouses that are, or are a spouse that is equally excited.
So just finding that balance that works both for you and your spouse and finding a goal that you could both get excited about is the key. And I think a great place to start. If we're talking about marriage and money, this is the best place to start for me.
Join the 5 Days to $5K Challenge
Looking for more ideas on how to find, save, and make extra cash to pay down debt (or another big money goal)?
Sign up for my free 5 Days to $5K course.
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Thank You to Our Partners
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Like the music in this episode? Our theme song is by Gentle Regime. I also want to thank Lee Rosevere for music in this episode.
This episode was originally released in April 2018. Show notes have been updated August 2021.