In order to produce the podcast and keep content up free for you, I work with partners so this post may contain affiliate links. Please read my full disclosure for more info.

This is the first of a series of posts Steve Stewart is sharing on various sites as he counts the days left until he and his wife pay off their house!

My wife and I started our financial journey in 2005. We followed Dave Ramsey’s Baby Steps – sort of.

This week, we are cheating the Baby Steps to pay off the house early!

Working Through Dave Ramsey's Baby Steps

Dave Ramsey, national radio host and best selling author, is known for teaching people how to get out of debt and build wealth using his Baby Step process:

Step 1: Save $1,000 for emergencies
Step 2: Pay off all consumer debt
Step 3: Save 3-6 months of expenses in a bigger emergency fund
Step 4: Invest 15% of household income for retirement
Step 5: Save for your kid’s college expenses
Step 6: Pay off your house early
Step 7: Build wealth and give

Paying Off Your House Early (1)

My wife and I were married in February 2000 and were somewhat responsible with money. However, we didn’t have a plan.

We used credit cards, had some car loans, and saved a little in our 401(k)s. However, our net worth was a negative ($70,000) because of our house.

In 2003(ish) I bumped into Dave Ramsey on the radio. I quickly realized he had an easy-to-follow plan that even I could understand.

We organized our finances, started tackling our debt, and arrived at Baby Step 6 (saving for our daughter’s college) by the end of 2008. Oh, and our net worth was finally positive too!

It is extremely important to remember that an emergency fund is only to be used for emergencies. If we dipped into our emergency savings for a trip to Disney and had an accident driving home, we might not have enough to cover repairs and medical bills.

For this reason it is important to follow the rules faithfully, except for this one time.

Paying Off Your House Early

This week, I am going to cheat Baby Step #3 and take money out for a non-emergency: Paying off our house early.

In Dave Ramsey’s world, this sounds like blasphemy – but it isn’t.

Here’s why:

If your monthly household expenses, including a mortgage, came to $5,000 then you would want at least $15,000 in savings (5,000 x 3 = 15,000).

However, if you house payment was $1,000 a month (principle and interest) but you pay it off; your monthly expenses would drop to $4,000 a month (5,000 – 1,000 = 4,000).

In other words, your emergency savings would only need to be $12,000 to be a 3-month emergency fund (4,000 x 3 = 12,000).

So we are going to the bank on December 14th, dropping our emergency fund down by a few thousand dollars, and getting rid of that pesky monthly mortgage payment.

It sounds like a trick – but it’s legit! We would have to re-evaluate our emergency fund after paying off the house on-schedule anyway – this just moves our monopoly piece ahead a few spaces without sacrificing a turn.

There are always changes in household expenses and family needs. This little trick will PAY OFF OUR HOUSE SOONER and won’t put any additional risk on our family.

What would your emergency fund need to be without a house payment? Take a look at your situation, follow the process, and I hope you get to pay off your house early too!

Steve at Timm's

Steve Stewart has been teaching and encouraging others how to eliminate debt and build wealth for almost a decade.

This year he left his day job, used cash to buy a car and new windows for his house, and is paying off the house as a Christmas gift to his wife.

You can find out more about Steve, his blog, and his new podcast “No Debt, No Credit, No Problems”, at

About guest poster

I always enjoy sharing new voices on Couple Money. I think it makes it a stronger site and a better one for readers. If you'd like to contribute, please review my guest post guidelines.

STANDARD DISCLOSURE: In order for me to support my blogging activities, I may receive monetary compensation or other types of remuneration for my endorsement, recommendation, testimonial and/or link to any products or services from this blog.

8 comments add your comment

    • Awesome Brett! Keep hustling your mortgage. It will be here sooner than you think!

      I’m watching your debt free scream now. Do you think you’ll go back after the 100k mortgage is paid off?

      • We’ve debated that. Depends on how quick we pay it off. If we can knock it out in 3-4 years, we probably will. If it takes longer, we’ll see. It was such an awesome experience the first time!! Made it all worth it. Thanks for checking it out!

  1. I like this idea to “cheat” on the baby steps. It makes perfect sense, plus I’m sure you’re saving more on the mortgage interest than you would be making on that extra $3000 sitting in your savings account. Plus, the emotional aspect is huge! Win-Win-Win

    • Ha! Yes, the savings rate is very very little – but so is the interest we were paying on the little bit that remained on our mortgage.

      We were only charged $19.09 in mortgage interest last month because we’ve paid the balance down so low.

      The big payoff will be on January 4th – the first business day of the month when our bank account isn’t hit with a $1,400 mortgage payment.

      Oh, and I’ll begin to earn interest on the money pulled aside for taxes and insurance instead of it sitting in escrow. I might make $1 or so 🙂

  2. In all my years of doing Dave Ramsey’s Babysteps I never thought of this idea. Brilliant! With this added calculation our debt free date is down to 9 years at the end of 2024.