How to Stop Buying Things You Don't Need
A sixteen-year-old espresso machine, an Amazon shopping habit, and a dream of starting a business taught me that buying less can make room for a richer life.
How to Pay Off Your Mortgage Early Without Sacrifice
We bought a home we loved, lived within our means, and made smart financial decisions along the way. Here's how budgeting, extra mortgage payments, and resisting the temptation to upgrade helped us approach paying off our home in just 18 years—without sacrificing the life we wanted.
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How to Pay Off Your Mortgage Early Without Sacrificing Your Life
Every once in a while, my wife suggests that we should buy a bigger house.
Specifically, one with four bedrooms.
And honestly, we could probably afford it.
Her reasoning is perfectly reasonable. It would be nice to have an extra bedroom when family comes to visit, particularly her mother, who lives in Korea.
So I asked her a question.
"How many times has your mom visited us since we've lived here?"
Once.
In sixteen years.
Now, I love my mother-in-law. She's always welcome in our home. But do we really need to buy an entirely different house for someone who visits once every sixteen years?
My solution is considerably cheaper.
She can sleep in our bedroom. I'll sleep downstairs on the couch.
Problem solved.
Well, perhaps not for my back.
But certainly for our bank account.
And that little conversation explains a lot about how my wife and I are approaching something I consider a significant financial milestone.
We're about two years away from paying off our mortgage.
By 2028, we'll have owned our home for eighteen years. And if everything goes according to plan, we'll own it outright.
We didn't get here by depriving ourselves.
We got here by making some fairly ordinary financial decisions and sticking with them.
Buy a House You Can Afford, Not the Biggest House You Can Buy
When we purchased our home in 2010, we put 20% down and chose a fixed-rate mortgage.
We bought a house we liked, in a neighborhood we liked, with enough room for our family.
It wasn't the biggest or fanciest house available.
But I loved it then, and I still love it now.
Our initial housing expenses were actually quite substantial, approximately 40% of our take-home pay.
And when I say housing expenses, I mean everything: mortgage principal and interest, property taxes, homeowners insurance, and HOA fees.
That's a significant percentage, and I wouldn't casually recommend it to someone buying a home today.
But we understood our finances and made the decision carefully.
My advice is to aim for housing expenses around 25% of take-home pay. That's a conservative target that leaves more room for saving, investing, and enjoying life.
If you're approaching 50%, consider that a serious warning sign. It may be workable for some households, but it leaves little margin for error.
And never buy a house that requires future raises just to make the payments.
Let Your Income Grow Without Upgrading Your House
Something interesting happened after we bought our home.
Our incomes increased.
But our housing expenses didn't increase at the same rate.
We didn't immediately start looking for a more expensive house simply because we could afford one.
Instead, our mortgage gradually became a smaller percentage of our take-home pay.
Eventually, we got much closer to that 25% target.
And as we earned more money, we started making extra payments toward the mortgage principal.
At some point, we realized we were already paying close to what a 15-year mortgage would require.
So we refinanced.
We were fortunate to secure a 2.85% fixed interest rate and shortened our mortgage from 30 years to 15.
That decision helped us accelerate our payoff schedule and reduce our remaining interest costs.
It was a good decision for us, although refinancing isn't always the right choice. Closing costs, interest rates, and monthly payment requirements all matter.
But the larger lesson is simple.
We let our income grow into our mortgage instead of letting our mortgage grow with our income.
How Envelope Budgeting Helped Us Pay Off Our Mortgage Early
I've used budgeting software for years.
I started with Quicken before eventually switching to Goodbudget because I liked its envelope budgeting system.
The concept is simple.
Give your money a job before you spend it.
We have money set aside for vehicle maintenance, medical expenses, property taxes, home repairs, vacations, and Christmas presents.
Right now, our children are approaching the age when they'll need braces.
So we're putting money aside for that, too.
Every paycheck, a little more goes into the appropriate accounts.
When an expense arrives, we use the money we've already saved.
Think about Christmas.
It comes on December 25 every year. Yet somehow, people can find themselves surprised by the expense.
The same goes for property taxes and vehicle maintenance.
These aren't necessarily emergencies. They're predictable expenses that don't happen every month.
Our philosophy is straightforward:
If you didn't put money aside for it, you don't have the money to spend on it.
When we wanted to renovate our bathroom, we saved until we could pay for it.
We didn't take out a home equity loan.
And we never treated our home's growing equity as a source of spending money.
That allowed us to keep making progress toward paying off the house.
I've written before about living well within our means and how we've made our home comfortable without constantly upgrading. Looking back, I realize those same habits did something even more important: they helped put us on the path toward owning our home outright.
Five Practical Ways to Pay Off Your Mortgage Early
If you're wondering how to pay off your mortgage early, these are the habits that made the biggest difference for us.
- Choose an affordable home. Calculate the total housing expense against your take-home pay, not just the mortgage principal and interest.
- Avoid lifestyle inflation. When your income increases, resist automatically increasing your housing expenses.
- Make extra principal payments. Even modest additional payments can shorten your mortgage, provided they're applied correctly.
- Budget for future expenses. Build savings for predictable costs so you don't need to borrow when they arrive.
- Evaluate refinancing when it makes sense. Compare the full costs and benefits of a shorter mortgage term.
We were fortunate to buy when housing was more affordable and later refinance at an excellent rate. We also have good incomes.
Not everyone has those advantages, and paying off a mortgage early isn't always more important than building emergency savings or investing.
But the underlying habits are useful regardless of income.
The Real Reward of Paying Off Your Mortgage
I sometimes think about the day we make our final mortgage payment.
There won't be a new house.
No bigger kitchen. No fourth bedroom. No impressive new address.
It'll be the same house where we've raised our children, celebrated holidays, cooked countless meals, and built our lives.
And that's exactly what I want.
We could have spent the last eighteen years chasing a bigger house.
Instead, we spent them making this one ours.
And when my mother-in-law visits again, she'll have a perfectly comfortable bedroom.
I'll take the couch.
Sometimes the difference between having enough and needing more is simply being willing to sleep on the couch.
“Know what’s enough. Build what matters.”
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