We did it…..WE’RE DEBT FREEEEEEE!!!!!!!!!!! One month shy of 6 years and we paid off our house. And let me tell you…it feels great!
I will forever remember walking into the bank with my family and as we walked in the direction of the back of the main floor the bank president stopped us.
“Can I help you folks find something?” he asked.
“Yes. We’re here to pay off the balance of our mortgage.”
At that point he literally choked on his spit! It was great!
Rewind to June of 2011. My wife and I had just returned from our honeymoon in Cancun. Barely a month before we had both graduated from Pharmacy School. We were in the process of relocating to a new city for careers that we had spent the past 6 years preparing for. After countless hours studying anatomy and physiology, organic chemistry, pharmacology, medicinal chemistry and then a year of intense clinical rotations, we were more than ready to be through this stage of life and on to the next. Shortly after moving into our apartment we passed our board exams to become licensed PharmD’s. So how did we celebrate? Yep, $15,000 on a pickup loan. Just making Dave Ramsey proud!
The ironic thing is that I’d been a DR listener for my entire college career. I was driving a paid for 18 year old pickup with under 120,000 miles. Why we made that decision I don’t know for sure. We are very blessed to have two pharmacist incomes in our home. That alone allowed us to pay the pickup loan off in 3 months. Just in time for the student loan payments to start. After $26,000 and a few more months of living like college students we finished off the student loans. At that point we began to save a down payment for our first home, which we purchased in April of 2012.
We lived here for just over 3 years. But now with a two year old and one on the way we decided to upgrade. It was a difficult choice because we were less than $50,000 from paying this home off. And upgrading in size meant adding another $90,000 to the new mortgage. But the new house offered a basement and another bedroom which we were desperately going to need. So in August of 2015 we closed on our current home. Based on the payment and our projected salaries, I estimated us paying the house off in the summer of 2019. But as we made progress and cut our lifestyle to the point where we threw nearly every. extra. dollar. at the mortgage, we could see that the payoff date would be much earlier…15 months to be exact!
Paying off your mortgage and being debt free is crucial to gaining Financial Independence status. Simple arithmetic shows that the less money you spend, the less money you need. Being financially independent means getting to the point where you no longer need your day to day salary or hourly wage to sustain you. Your assets (retirement accounts, dividends, rental income etc.) will generate enough income for you to live on. If you have monthly payments, your average yearly spending goes up and you need more money in your budget. Don’t be confused; you can still have a mortgage or loan payments and be FI, it’s just harder (stay tuned as we get into the math behind FIRE).
The 6 year journey of paying off our mortgage has been one of the most rewarding challenges we’ve ever done. Watching the balance decrease (it’s slow at first, just hang in there) was fun! When we got below $50,000 I feel like we really could see the light at the end of the tunnel. From then on we were extremely focused on making this happen. Overtime was worked, pleasure was delayed (mostly…we did go to Maui in January instead of spending money on Christmas presents) and we gained momentum.
If you are struggling with the thought of paying on your mortgage for the next 15-30 years my advice is this; hang in there. It’s not a fast process. It takes sacrifice and hard, intentional work. You’ll have to say “No” to your spouse, your kids, your friends and yourself. You might have to work more. You might not be able to golf as much or take extravagant vacations like you desire. You might have to eat at home and pack your lunch. Heck, you might even have to buy Busch Light instead of your favorite IPA. Ok wait. Wait. You don’t have to do that. You have my permission to NOT buy Busch Light. But all of those sacrifices are temporary. A paid for home is permanent. And it’s worth it. It’s sooooo worth it!