Today I applied a pretty big lump sum to my mortgage in my pursuit of freedom from debt. Yep. I got paid out for my vacation from leaving my previous job, and from the money we have made from doing AirBnB. It is really amazing how the Lord has blessed us as we've progressed in our debt payoff.
However, I have to be honest. Hitting the submit payment button on a large sum of money scares me. It scares me, because I worry that I've screwed up. I might have added one extra zero. I worry that I might suddenly lose my job. That one of my family members might become suddenly ill. Tons of semi unrealistic worries. I don't know what it is, but paying off does scare me.
I guess paying off my house scares me, because I'm use to having debt. Do you know what I mean? It is kind of like a routine. Do you auto pay your mortgage or credit card every month? You expect that a specific amount is paid towards Chase CC or towards Acme Mortgage Corporations. It has been as routine as picking up Starbucks every morning before work.
As I go through this debt freedom journey I find that certain characteristics are needed to make it to the finish line. Here are a few of my tips to get you over the fear of debt freedom.
- Get on the same page as your spouse – the only thing better than one oxen pulling a wagon is two oxen pulling a wagon in the same direction. In the same way, if you and your spouse aren't going the same direction to pay off your debt, then becoming free from debt is going to be hard. Getting on the same page is the hard part. For my wife and I it took a long kid free weekend to have a lot of discussions on this topic after our farmhouse buying experience fell through. Make some quiet time to talk things out and work on not trying to be the one who get's their way in the situation.
- Get started on the two checking account system – at the beginning of this year I put together a short instructional video on how to separate your fixed expenses from your variable expenses. This method has significantly lowered the amount of time I spend paying my fixed expenses.
- Reduce fixed expenses – early on in our mortgage payoff venture we made a commitment to reduce our fixed expenses. These expenses were built into our budget and contradicted our movement to pay off our house. Whatever used to pay in fixed expenses reduced our ability to become debt free. Work early on to keep these expenses low. Here is a post a I wrote a few years ago that provided tips to reduce them.
- Properly fund your emergency fund – it might be tempted to use your emergency fund to payoff your house the close you get to payoff. Resist the urge. This cushion is there to give you security you need and protect you from a layoff, broken furnace, or any extreme circumstances.
- Track your progress – as I approach my estimate of paying off my house in Aug 2018, I've laid out in excel how much I have left in principal at the end of every month. It is motivating to see my progress and also helps me simulate how applying extra principal to the mortgage will accelerate my payoff. Give it a try.
Overall, as I am within two years of having my house paid off I can attest that each of these tips has and is helping me progress with freedom from debt. What tips do you have to stop being scared of becoming debt free and make that jump? Leave a comment below.
1 Comment
Interesting thoughts. I think one of the biggest “fears” or concerns is that folks could be using the money elsewhere. In the case of a house, where you are building equity – some suggest just putting this money into investments instead of putting money into an appreciating asset which you can (most of the time) easily sell.
But I know the thinking behind why you choose to pay down all debt as it is best to owe no man anything.
Your journey is inspiring to watch!