How to Pay Off Your Mortgage in Five Years

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Finances are a touchy subject that stresses the hell out of all of us. It can especially affect our relationships. Almost one out of every two marriages end in divorce, sixty percent of which are due to financial stress. For most dads, our main goal is to pay off our home mortgage. This seems impossible. How can we pay of a thirty-year mortgage in a matter of years? Today we have Andy Hill from MarriageKidsandMoney.com to tell us how he is paying off his mortgage in less than five years.

Pay Off Your Mortgage in Five Years?

Andy Hill and his wife have been married for seven years. They have two kids, a five-year-old girl and a three-year-old boy. Andy and his wife have been working hard since they’ve been married to create a life that is exciting and live their dreams. So when they bought their dream home, they knew they didn’t want to have the $200,000 debt hanging over them. They set an ambitious plan to work to pay the entire mortgage off in five years.

Today, they have only $29,000 left, which will be paid off at the end of the year. It sounds impossible, or painful, but Andy says it’s the little things that add up to big savings in their household budget that they funnel into paying off their house.

Budget Party

The first step is to get the spouse on board. This is not always easy, but Andy and his wife have a “budget party” once a month to discuss the budget strategy. Andy says not to start the conversation with what must be sacrificed. Make sure you highlight the benefits first. Imagine a life without a house payment? Where could you go? What could you do? Then do a detailed budget and see where all the money is going and start making cuts.

Where families can save money

Pack lunches. You can stay healthier and not spend money this way. Andy saves $100 a month by packing his lunch for work.
Analyzed grocery spending. Andy’s family spent an average of $900 a month on food. To cut back on this expense, they now shop once a week with a list and they stick to it. They switched from Kroger to Aldi and save about $300 a month now. Switch from more expensive stores to discount stores.
Become an aspiring minimalist. Don’t let clutter accumulate. Don’t let things pile up in garage. Look around the house? Does anything you’re not using have value? Sell it online or have a garage sale. Spring cleaning can become profitable.
Cut off the cable. There are so many alternatives to traditional cable. Look at your bill. Analyze the fees. Call and negotiate. Call all providers and find the best deal. Cut back to just internet service.
Go to different stores for bulk items. Things like diapers and baby wipes tend to be more expensive at the grocery store. Go to bulk supermarkets like Costco for these items.

When you feel good about your money, you can do great things that make you feel like a great dad.

Structuring a Household Budget

Andy Hill and his wife set aside money for everything. They include date nights, vacations, and entertainment. Here is how he structures his budget categories:

Transportation (car, public transport)
Utilities, bills, cell phones
Entertainment (game tickets, babysitters, dinners)
Saving up for kids’ college
IRA, retirement
Food
Giving (donations and charities, gifts)
Health, doctor
Home maintenance and improvement
Kids activities (parties, swim lessons)
Miscellaneous or forgotten stuff
Emergency (three months of expenses saved up in case of job loss, natural disaster, etc.)

Andy Hill’s Dad Wisdom

Andy says it’s important to create dreams for yourself and put them out there. Set specific dates to get them done. Ask yourself how your financial goals can support the family you want to have. Do you want the next great thing? Or do you want to give to the world and have new life experiences?