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Mortgage Payoff Plan Update: Jan – Mar 2019

April 1, 2019 By Thinking of Someday

Back in January, our first post for the new year entailed our plan for paying off our mortgage early. If you missed it, you can check it out here. We wanted to wait for a little before sharing so that we could see how the plan was going to work and so that we would have enough “meat” to share.

Here’s how it’s all been going for the last three months…

The Problem With Our Plan

When Omar first came up with the idea of doing a 70/30 split with 30% of our leftover money going towards the mortgage, we thought it was great and would be straight forward. We would spend money on our needs and wants and then do the 70/30 split. However, it didn’t take us too long to see the flaw in this plan.

We actually started in November of 2018 to give the plan a trial run. Since our budget template is already pre-filled with our regular expenses, Omar usually asks me if there is anything else we need to add to the budget. The problem we ended up having with this method was that neither of us really liked how fast the leftover money dwindled down. Thus, leaving us with a lesser amount to take 30% from.

Finding A Solution

Since I’m typically the one to add any extra expenses to the budget, thus decreasing the 30% portion to go towards the mortgage… I wanted to do better and not disappoint Omar in spending the leftover money so fast. Lol. So I wanted to come up with a solution.

My first solution was that I would add any extra expenses to the budget the same day we got paid, which is when we usually execute the budget. Once those expenses were added, then we would do our 70/30 split with the money that was left over. This meant that anything else that needed to be added to the budget would have to be deducted from the 70% that was left. Omar was a little shocked and asked if I was sure because this was definitely not how we would normally do our budget. I told him no (lol) but I knew that if we didn’t do it then, there was going to be a chance of us having a lesser amount to take 30% from. And I was sure that I didn’t want that. I have to admit, once I clicked submit on that payment, I wasn’t unsure anymore.

Perfecting The Solution

December was a three-month check for us. So we did the above method again for our third checks. However, I still wasn’t quite satisfied. After much thought, I asked Omar how he would feel about taking the 30% from the money we initially have leftover before we add any extra expenses outside of our norm. Since Omar REALLY wants the mortgage gone… this was an easy sell and I earned major brownie points for coming up with this solution. We started this revised plan in January and have been rather satisfied with how it’s working out.

The Numbers

The story above that Kim shared may be a little long considering we’re supposed to be sharing our numbers on paying off the mortgage. However, we thought it would be helpful to show what healthy communication around finances can look like between married folks. This is how a lot of our conversations go and how we work together to figure out the best solution to make both of us happy.

Now to get to the exciting part, here are the mortgage pay off numbers for the first quarter of 2019 (Jan – March):

** note: Principal refers to the regular part of our payment that goes towards the mortgage principal. Additional refers to any extra money from our budget unless otherwise stated.

January

  • Principal = 801.96
  • Additional = 505.83
  • Total: 1307.79

February

  • Principal = 805.42
  • Additional = 1409.99
    • Budget = 494.99
    • Tax Refund = 915
  • Total: 2215.41

March

  • Principal = 810.61
  • Additional = 6475.72
    • Budget = 522.27
    • RSUs = 5953.45
  • Total: 7286.33

The principal balance was $135,240.09 at the beginning of 2019. At the end of the quarter, the principal balance is now $124,430.45. We paid off $10,809.64 this quarter. This puts us at a little less than 50% of our goal of $23,000 for the year.

Our Visual

When you have a major goal that you want to achieve and it’s going to take a while to do so, it can help to some type of visual to aid in keeping you motivated. I (Kim) came across some debt free charts on Pinterest a couple of years ago. When we refinanced and realized how quickly the principal was being paid down with our regular payment, Omar mentioned he wished we had a way to show how much we’ve paid down the mortgage. After some research, I came across debtfreecharts.com. She offers all kinds of free charts for paying off debt and saving, and will even do custom charts.

I showed Omar a picture of the mortgage payoff chart, and he liked it! Initially, he colored it in with different color ink pens, and I always hated it because it wasn’t “pretty” (lol). But also because I had seen some people color their charts with a black marker and it literally looked like the debt was disappearing.

1. Chart at $135,000 2. Omar coloring a line 3. Kim coloring a line 4. Chart now below $125,00

As you can see from our pictures, I showed Omar what it looked like with the black marker by coloring over his original work. He had to admit… He loved it! (more brownie points for me!)

It was exciting to put that big extra payment from the RSUs onto the mortgage, and crazy enough it was equally as exciting to finally color in some lines on our chart again! The last time we colored in a line was in January when we got the mortgage below $135,000. Since our lines our in increments of $5k until we get the mortgage down to $15k… it’s always a while before we get to color in any lines. The wait is definitely worth the excitement it brings us though.

Final Thoughts

This has definitely been an interesting yet exciting journey that we have decided to embark upon. It almost makes us want to pay the house off even quicker than we initially planned, which was in 6 years. Although we were expecting the RSUs and knew we wanted to cash them out and put it towards the mortgage (although we contemplated not doing so or putting it towards our emergency fund), we never expected to have reached almost 50% of our goal so soon. Hopefully, we can keep some of this enthusiasm and momentum going… Because we still have a long way to go!

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Related

Filed Under: Personal + Finance Tagged With: debt freedom, mortgage, mortgage free journey

See what’s happening on Instagram…

thinkingofsomeday

As of 1/8/2022, it’s been one year since we beca As of 1/8/2022, it’s been one year since we became mortgage free. What better way to celebrate than a date night in our paid off home?! 😏
⠀⠀⠀⠀⠀⠀⠀⠀⠀
So how does it feel?
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Financially, we invested the most money we've ever invested. We also increased our lifestyle a bit as well to keep a healthy balance.
 ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Kim’s Perspective: 
⠀⠀⠀⠀⠀⠀⠀⠀⠀
It’s been great. For the longest it felt surreal and unbelievable that we actually did it. I never really worried about paying off the mortgage because I knew that worst case scenario, it would be paid off in 15 years, which would’ve been when we were 45 (and that’s not a bad age at all). However, it’s been nice to know that it’s not something that Omar is stressing over anymore. And since it was one of his biggest dreams/goals, it’s nice knowing that I was able to support him 100% of the way in making this happen for us and our family. I’m glad this is something he wanted to pursue and that I was actually on board with it. What I’ve enjoyed most about it is being able to spend more money (of course 😆) because a lot of things were put on hold while we focused on the payoff. So now I feel like I’m at that point where I can make our house more of a home for us. It literally feels like we’re in a new space (mentally and physically) and we’re loving it.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Omar’s Perspective:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This past year has probably been the best year I've had in life. I've been the least stressed I've ever been, but took on the most responsibility at work I've ever taken on which lead to a promotion and an increase in income. This boggles my mind as more responsibility at work usually means more stress. I feel like I’ve been able to focus on other areas of my life more (my health/weight as well as making more of an effort to maintain my relationships with friends/family). Most importantly, I realize the strength of my marriage.  With the state of dating/relationships these days, I realize I won the lottery with Kim.  She's an amazing wife and mother. We've always had a good relationship but we're stronger than ever.  We started from the bottom now we're here (in my Drake voice). 🎶 #thislifeafterdebt
After taking some time to think about what we want After taking some time to think about what we wanted to focus on for this year, we decided that our word for the year is health.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Overall we both want to continue making healthier choices when it comes to eating. And we both want to focus on exercising more than we have in the past and be way more consistent with it.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
At the end of the day, what’s money, financial freedom/independence and wealth if you’re not healthy? And we definitely have high blood pressure, diabetes, etc that run in our families. We have kids to live for and that’s what we plan to do to the best of our ability!
This is what our financial goals ended up looking This is what our financial goals ended up looking like for this year. We’re pretty pleased with the outcome and the fact that we still enjoyed ourselves throughout the year and even made some pretty big purchases (like that whole couch saga I shared in my stories 😆). We’re looking forward to seeing what the next year holds! #thislifeafterdebt
We didn’t officially choose a word for 2021, but We didn’t officially choose a word for 2021, but if we had to say a word that was our word for this year it would be “intentional” by far.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
At the end of 2020 and beginning of 2021 we were very intentional about pulling money from an inherited IRA so that our tax bill wouldn’t be ridiculous like it would have been if we pulled a lump sum at one time. We then used the money to help pay off our mortgage 8 days into 2021.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
What we were even more  intentional about was our plan for what we were going to do with our mortgage payment once we didn’t have a mortgage anymore. We didn’t want to frivolously spend that money. So we actually came up with our plan a couple months before making our final payment. But literally after that payment on January 8, 2020, our new mortgage-free budget was in full effect! So yea, “intentional” is definitely a good word to sum up 2021 for us. #thislifeafterdebt
Some of the things we automate are:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Our Budget:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
For the longest we use to type everything we were going to spend or save into our budget template. It wasn’t super time consuming but it wasn’t efficient when it came to our regular bills/expenses. Then one day we decided to prefill the template and copy and paste it month to month for our regular bills/expenses. All we have to do is add anything else we spend.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Savings / Investing:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Most of our savings/investing and even our gas and spending money our automated transfers. It beats having to go in and make multiple transfers to our personal accounts and our sinking funds. The 529 accounts for the kids and the Roth IRAs are automatically transferred. But for the brokerage account we have to manually transfer the money because it’s never the same amount each paycheck.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Bill Pay:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
I’ve never been a fan of bill pay because I don’t like companies having that type of access to my money. 🥴 And whenever they mess up and charge you too much, they’ll try to just credit your account instead of putting the money back in your bank account. 🙄 However, I’m a tad bit more trusting these days. Lol. Our home alarm had no option but to be auto drafted. Since the amount wasn’t much and is always the same price, I agreed. And the only other bill auto drafted is our cell phone bill after many many years (gasp! haha). Some of the other bills are paid via online bill pay via our banking account. #thisfinancialconfession
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Doing all of this has been a game changer and time saver. Are you team automate or team manual?
It’s been a minute since I’ve made a charcuter It’s been a minute since I’ve made a charcuterie board. So I figured Christmas brunch was the perfect time. And plus, that meant less time in the kitchen for me with cooking because I knew I was going to be cooking dinner today. #piecesofsomeday
Merry Christmas! And 2 pictures because it’s gua Merry Christmas! And 2 pictures because it’s guaranteed that someone isn’t going to be looking. 😆 #christmas2021 #piecesofsomeday
We purchased our house for $168.5k (after the down We purchased our house for $168.5k (after the down payment). We refinanced at $165k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we took 30 years to pay it off, our total would’ve been $293k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we paid the 30-year mortgage like a 15, then it would’ve been $225k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
After we refinanced to a 15-year, if we took 15 years to pay it off, then our total would’ve been $205k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Instead, we paid off our mortgage in a little over 7.5 years.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We ended up paying a total of $200k with interest.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Paying $200k for this home with how it looked when we purchased it sounded a lot better than having to pay a total of $293k if we end up being here for 30 years! This was yet another factor that helped us decide to pay it off early. #thislifeafterdebt
Part of the reason we decided to refinance and eve Part of the reason we decided to refinance and even pay our house off early is because of the amount of money we were paying in interest on our mortgage. So of course, several months after we paid off the mortgage I began to wonder just how much did we really pay in interest. So I asked Omar if there was a way to figure it out. At first he was like, “Really Kim?” 😳 And of course I was like, “Ummm yea.” 😬 Lol.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Jun 2013 is when we bought the house. So there wasn’t much interest paid then.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2014 and 2015 is still when we had the 30-year mortgage. It’s also the years that we paid the most interest. We refinanced at the end of 2015.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2016 is when we made our first payment with the 15-year mortgage. It’s crazy how the amount of interest decreased based off that alone.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2019 is when we decided to pay off our mortgage early. It was supposed to take 6 years. But instead we used RSUs and sped it up tremendously.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Jan 2021 is when we paid it off before our first payment would’ve been due. $27 was the last bit of interest we paid on our mortgage.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Grand total: $35,102.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we had continue to just make regular payments on the 15-year mortgage, we would’ve paid a total of $56,279. A difference of $21,177. 🙌🏽 🙌🏽 #thislifeafterdebt
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Comments

  1. GYM says

    April 16, 2019 at 12:00 am

    Wow that is huge!! Congrats on plunking down so much to your mortgage debt. Hitting the principal is the fastest way to pay off your mortgage.

    Nice that you found some free printables on Pinterest. Your kids must like seeing their parents colouring too 😉

    • Kim says

      April 16, 2019 at 9:15 pm

      Thanks GYM. It felt good to pay the extra each time!

      Our oldest son asked us what we were coloring. We’ll probably let him color in a line one day as well!

  2. Yvonne says

    April 24, 2019 at 2:24 pm

    Wow…this is awesome…..yes..long road but it gets easier as you get closer and the interest gets lesser and lesser….love it!!

    • Kim says

      April 29, 2019 at 9:45 am

      We’re ready for the day that it’ll be easier and easier!

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Hey! We’re Omar + Kim.

A married couple making someday a reality all while balancing family + finances + avoiding debt. Find out more about us, here.

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See what’s happening on Instagram

thinkingofsomeday

As of 1/8/2022, it’s been one year since we beca As of 1/8/2022, it’s been one year since we became mortgage free. What better way to celebrate than a date night in our paid off home?! 😏
⠀⠀⠀⠀⠀⠀⠀⠀⠀
So how does it feel?
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Financially, we invested the most money we've ever invested. We also increased our lifestyle a bit as well to keep a healthy balance.
 ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Kim’s Perspective: 
⠀⠀⠀⠀⠀⠀⠀⠀⠀
It’s been great. For the longest it felt surreal and unbelievable that we actually did it. I never really worried about paying off the mortgage because I knew that worst case scenario, it would be paid off in 15 years, which would’ve been when we were 45 (and that’s not a bad age at all). However, it’s been nice to know that it’s not something that Omar is stressing over anymore. And since it was one of his biggest dreams/goals, it’s nice knowing that I was able to support him 100% of the way in making this happen for us and our family. I’m glad this is something he wanted to pursue and that I was actually on board with it. What I’ve enjoyed most about it is being able to spend more money (of course 😆) because a lot of things were put on hold while we focused on the payoff. So now I feel like I’m at that point where I can make our house more of a home for us. It literally feels like we’re in a new space (mentally and physically) and we’re loving it.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Omar’s Perspective:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This past year has probably been the best year I've had in life. I've been the least stressed I've ever been, but took on the most responsibility at work I've ever taken on which lead to a promotion and an increase in income. This boggles my mind as more responsibility at work usually means more stress. I feel like I’ve been able to focus on other areas of my life more (my health/weight as well as making more of an effort to maintain my relationships with friends/family). Most importantly, I realize the strength of my marriage.  With the state of dating/relationships these days, I realize I won the lottery with Kim.  She's an amazing wife and mother. We've always had a good relationship but we're stronger than ever.  We started from the bottom now we're here (in my Drake voice). 🎶 #thislifeafterdebt
After taking some time to think about what we want After taking some time to think about what we wanted to focus on for this year, we decided that our word for the year is health.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Overall we both want to continue making healthier choices when it comes to eating. And we both want to focus on exercising more than we have in the past and be way more consistent with it.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
At the end of the day, what’s money, financial freedom/independence and wealth if you’re not healthy? And we definitely have high blood pressure, diabetes, etc that run in our families. We have kids to live for and that’s what we plan to do to the best of our ability!
This is what our financial goals ended up looking This is what our financial goals ended up looking like for this year. We’re pretty pleased with the outcome and the fact that we still enjoyed ourselves throughout the year and even made some pretty big purchases (like that whole couch saga I shared in my stories 😆). We’re looking forward to seeing what the next year holds! #thislifeafterdebt
We didn’t officially choose a word for 2021, but We didn’t officially choose a word for 2021, but if we had to say a word that was our word for this year it would be “intentional” by far.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
At the end of 2020 and beginning of 2021 we were very intentional about pulling money from an inherited IRA so that our tax bill wouldn’t be ridiculous like it would have been if we pulled a lump sum at one time. We then used the money to help pay off our mortgage 8 days into 2021.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
What we were even more  intentional about was our plan for what we were going to do with our mortgage payment once we didn’t have a mortgage anymore. We didn’t want to frivolously spend that money. So we actually came up with our plan a couple months before making our final payment. But literally after that payment on January 8, 2020, our new mortgage-free budget was in full effect! So yea, “intentional” is definitely a good word to sum up 2021 for us. #thislifeafterdebt
Some of the things we automate are:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Our Budget:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
For the longest we use to type everything we were going to spend or save into our budget template. It wasn’t super time consuming but it wasn’t efficient when it came to our regular bills/expenses. Then one day we decided to prefill the template and copy and paste it month to month for our regular bills/expenses. All we have to do is add anything else we spend.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Savings / Investing:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Most of our savings/investing and even our gas and spending money our automated transfers. It beats having to go in and make multiple transfers to our personal accounts and our sinking funds. The 529 accounts for the kids and the Roth IRAs are automatically transferred. But for the brokerage account we have to manually transfer the money because it’s never the same amount each paycheck.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Bill Pay:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
I’ve never been a fan of bill pay because I don’t like companies having that type of access to my money. 🥴 And whenever they mess up and charge you too much, they’ll try to just credit your account instead of putting the money back in your bank account. 🙄 However, I’m a tad bit more trusting these days. Lol. Our home alarm had no option but to be auto drafted. Since the amount wasn’t much and is always the same price, I agreed. And the only other bill auto drafted is our cell phone bill after many many years (gasp! haha). Some of the other bills are paid via online bill pay via our banking account. #thisfinancialconfession
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Doing all of this has been a game changer and time saver. Are you team automate or team manual?
It’s been a minute since I’ve made a charcuter It’s been a minute since I’ve made a charcuterie board. So I figured Christmas brunch was the perfect time. And plus, that meant less time in the kitchen for me with cooking because I knew I was going to be cooking dinner today. #piecesofsomeday
Merry Christmas! And 2 pictures because it’s gua Merry Christmas! And 2 pictures because it’s guaranteed that someone isn’t going to be looking. 😆 #christmas2021 #piecesofsomeday
We purchased our house for $168.5k (after the down We purchased our house for $168.5k (after the down payment). We refinanced at $165k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we took 30 years to pay it off, our total would’ve been $293k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we paid the 30-year mortgage like a 15, then it would’ve been $225k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
After we refinanced to a 15-year, if we took 15 years to pay it off, then our total would’ve been $205k.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Instead, we paid off our mortgage in a little over 7.5 years.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We ended up paying a total of $200k with interest.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Paying $200k for this home with how it looked when we purchased it sounded a lot better than having to pay a total of $293k if we end up being here for 30 years! This was yet another factor that helped us decide to pay it off early. #thislifeafterdebt
Part of the reason we decided to refinance and eve Part of the reason we decided to refinance and even pay our house off early is because of the amount of money we were paying in interest on our mortgage. So of course, several months after we paid off the mortgage I began to wonder just how much did we really pay in interest. So I asked Omar if there was a way to figure it out. At first he was like, “Really Kim?” 😳 And of course I was like, “Ummm yea.” 😬 Lol.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Jun 2013 is when we bought the house. So there wasn’t much interest paid then.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2014 and 2015 is still when we had the 30-year mortgage. It’s also the years that we paid the most interest. We refinanced at the end of 2015.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2016 is when we made our first payment with the 15-year mortgage. It’s crazy how the amount of interest decreased based off that alone.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
2019 is when we decided to pay off our mortgage early. It was supposed to take 6 years. But instead we used RSUs and sped it up tremendously.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Jan 2021 is when we paid it off before our first payment would’ve been due. $27 was the last bit of interest we paid on our mortgage.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Grand total: $35,102.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
If we had continue to just make regular payments on the 15-year mortgage, we would’ve paid a total of $56,279. A difference of $21,177. 🙌🏽 🙌🏽 #thislifeafterdebt
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