The focus for the past few weeks has been Dave Ramsey’s baby steps. Baby step 6 is to pay off the mortgage. This one is hugely debated. Many believe that the tax benefits to paying a mortgage are more beneficial than paying off the mortgage in full and no longer having that benefit.
Regardless, paying off a mortgage in full would put more dollars in your pocket which would allow you to build up savings, put money away for the future and afford the life you truly want.
According to Dave Ramsey most people who are following his baby steps do not actually even accomplish this until they are about 7-10 years (on average) into his baby step program. So how do you stay motivated? Because this is a hefty amount of debt and it can seem insurmountable.
First, create goals and then celebrate reaching those goals. Creating small goals and celebrating those wins makes it easier to stay on task and to complete the mission.
Second, focus on the bigger picture! Remember, once the mortgage is paid off there will be more money to put toward vacations, second homes, giving to charity, etc.
And third, try to remember that delayed gratification today, will reap the benefits tomorrow! It can be really hard to stick with something that may take 5-10 years but it will benefit the whole family in the end.
Mortgages are the most expensive debt we all carry. At an interest rate of even 3%, is low but still adding on a ton of interest every single month and year after year a mortgage of even $250K can add up to $500K over a 30 year period. For every month you make the payment as required according to your loan, you are handing over a lot of money to the bank in interest payments that you will never see again.
Taking time to focus on paying off your mortgage sooner rather than later, will allow you to afford the luxuries you are currently putting off. It makes buying a car in cash more attainable, going on vacations more affordable and creating wealth more likely. Take time to sit down and do the math to figure out how you can reach this goal.