General, Journal

Our First Mortgage Free Anniversary

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Success is a moving target. You’ve heard that line before, and I’m sure you’ve experienced the realization that it’s very true.

And if you follow Dave Ramsey’s Baby Steps, you know that the cap and gown moment of all of those years of work comes with your final mortgage payment. When you can finally say you’re debt free and not have to add “except for our home” at the end of the statement.

It’s the moment that every Baby Stepper dreams of.

For me, that dream always involved music (specifically Michael Bublé’s cover of Feeling Good), smiles, hugs, kisses and congratulations.

In reality, it was a long wait alone in the trendy lobby of our local credit union right after my yearly gynecologist checkup, and the teller who processed my final payment offered no congratulations or smiles. The music of this moment I had looked forward to every single day for 17 full months was made of ringing phones, fax machines and gossiping clerks.

People asked me that day how I felt and voiced assumptions of how excited I must be. But how do you begin to explain to someone the full range of emotions you feel right after accomplishing the goal you’ve been obsessing over for almost a year and a half?

Yes, it goes without saying that I was excited. That word is a huge understatement for how I felt that day. I felt the high of accomplishment – I mean, at 29 years old, I just made my final mortgage payment. I felt vindicated. That final payment proved that it was worth it to keep laughing off those “playful” comments from friends who said my husband received an allowance. I felt like I was beginning a second life, one where I didn’t owe anything to anyone for my past decisions. I felt motivated knowing we were closer to our next goal of saving cash to purchase our first rental property, yet anxious at the same time, knowing there was no set plan to follow from here, and believe it or not, I felt a little sad that this journey that I had felt such a fire for was now over

It didn’t sink in that day, and looking back, I’m still not sure of when exactly it did sink in. But out of all the ways we celebrated over the months to follow, what sticks out the most was a night in February when we took our brand new sheets out of the dryer, put them on our brand new mattress, and counted to three together before we climbed into bed. When I mentioned this moment while giving a podcast interview last year, the hosts asked incredulously if we had went without a bed to pay off our mortgage. No, we hadn’t, but we were sleeping on the mattress I had slept on since I moved out on my own – the mattress that had been in the guest bedroom of my granny’s old house. I had never bought my own bed before. And something about laying beside my husband in it that night under the roof we now completely owned was so peaceful that I don’t think I’ll ever forget it.

It’s been exactly a year today since waiting in the lobby to make that final payment, and I am still asked how it feels to have a paid-for home. It’s the same question Dave Ramsey asked Ron and me while he signed our beloved mortgage chart. My answer was the one word I felt that night in our new bed – peaceful. It’s the only word I can think of to begin to describe our new normal, a life of being completely debt free and now being able to save over 60% of our take-home pay each month.

It’s very peaceful.

If you’re new to my blog, you may be wondering how the heck someone can pay off their mortgage in 17 months. Explaining a lifetime of natural frugality would require at least an entire blog post in itself, but I’ll provide a basic rundown of the last five years, starting with November 2013, the month I bought what would later become our house.

25 years old and single, I searched for months for a house that I considered to be move-in ready. What this means to me is a lot different than what the young couples on HGTV are looking for when they tour houses. For me, this just meant something close to work with plenty of windows and no issues beyond cosmetic ones. I also refused to pay over $100,000, which meant I had to immediately cross off the neighboring cities of Oak Ridge or Lenoir City, and Knoxville was definitely not going to be in the cards for me.

Finally, I found a 2600 square foot home built in the early 60s that was right up the hill from the house I grew up in. It was listed at $120,000, I brought them down to $100,000, and I put 10% down.

Since I had paid off my car over a year before, my new $90,000 mortgage was my only debt. I felt so smart because even though I was paying PMI, I had taken out a 15 year fixed loan, just like Dave Ramsey says to do, and my interest rate was 3.325%.

A few months later, I posted a picture on my personal Instagram of myself re-reading The Total Money Makeover which led to conversations about money and goals with the single father who would later become my husband.

When we became engaged, we discussed the huge opportunity we were about to have once we became husband and wife – taking full advantage of having two incomes by pretending we only had one and ideally reaching the point where we could live on the lower of the two incomes while investing the rest – and knew that we had to do it from the start.

Separately, we started working toward this goal during our eight month engagement. I sold a second car that I had bought in an act of rebellion not even six months after buying my house, which immediately put me back in Baby Step 3. Ron paid off his car, closed his credit cards, and only had a little over $2,000 left to pay on my engagement ring by the time I walked down the aisle in April 2016. Ten days after the wedding, I finally convinced him to let us pay off the ring together.

From there, we progressed through the baby steps per the book until we found ourselves on Baby Step 6 at the end of August 2016, just four months after our wedding.

I remember the night we decided to do it our way. We were sitting at the bar between the kitchen and dining room, and I had the door open because I love when it is steamy hot outside at night (I know I’m weird), and we were looking at our mortgage balance of $77,135.72. We had just raised our 401K contributions to 15% a couple weeks prior, but that night we changed our minds about following Dave’s plan down to the letter.

We decided instead to laser focus on our mortgage by lowering our retirement contributions to just enough to receive our employer matches, to begin living on the higher of the two incomes, and to begin using every cent of the lower income as extra mortgage principal payments. We would start with the upcoming September budget by completely removing the second income, therefore pretending it didn’t even exist. From then on, I would log into our mortgage account every two weeks and make a principal payment that matched the exact amount of my husband’s biweekly paycheck. We knew we could knock it out in two years.

With a little help from the emergency fund that we impatiently cleaned out at the end of January 2018 to make the final payment, we knocked it out in 17 months.

Below is a breakdown of how much we paid in principal over those 17 months. (You can also check out our monthly payoff updates here.)

Month & YearPrincipal in Standard Monthly PaymentExtra Principal PaymentsTotal Principal Paid
September 2016$420.94$4,146.67$4,567.61
October 2016
$433.78$1,582.55$2,016.33
November 2016$439.45$4,075.01$4,514.46
December 2016$452.15$2,962.06$3,414.21
January 2017$461.75$4,825.66$5,287.41
February 2017$476.62$6,276.36$6,752.98
March 2017$495.62$4,548.73$5,044.35
April 2017$509.80$3,606.51$4,116.31
May 2017$521.38$2,791.21$3,312.59
June 2017$530.70$2,992.36$3,523.06
July 2017$540.61$2,714.24$3,254.85
August 2017$549.76$4,753.53$5,303.29
September 2017$564.68$2,584.91$3,149.59
October 2017$573.53$2,565.71$3,139.24
November 2017$582.36$2,563.15$3,145.51
December 2017$591.21$5,130.36$5,721.57
January 2018$607.30$10,265.06$10,872.36

To sum up these numbers over 17 months:

  • Total principal from our standard monthly mortgage payments: $8,751.64
  • Total extra principal payments made: $68,384.08
  • Total combined principal paid: $77,135.72
  • Average principal per month: $4,141.46 (I excluded January 2018 when calculating this number since we used over $6,000 from our emergency fund to finish paying it off.)

I am often asked how much we saved in interest by paying it off early, and I have no idea. All I know is that we shaved off 11 years of debt by spending 17 months sticking to a decision we made on a whim that steamy August night.

But one of my favorite questions about our journey is how we celebrated paying it off. After deleting the mortgage from our budget, switching to living on less than the lower of the two incomes and replenishing our emergency fund, we went all out. We bought that wonderful new bed, hired a contractor to update a few rooms of our house, bought new furniture and decor, spent two weeks in Russia while attending three games of the FIFA World Cup, bought a new lawn mower, and we ended our celebratory spending spree with buying a new-to-us truck. All the while, our net worth continued to rise. (Check out my net worth reports here.)

And seven months later on September 1, 2018, exactly two years from the start of our mortgage-free journey, we began a new goal of saving $100,000 to purchase our very first rental property with cash. We have now saved over $20,000 toward this goal and are averaging about $1,000 in savings. (Read more about this new goal here.)

I can’t believe how fast life has moved since making the decision to pay off our house. That 17-month journey was life-changing. The reward of becoming debt free is minuscule in comparison to the like-minded friends I made along the way, some of whom I’ve even now met in real life. It’s nothing compared to the number of people who have thanked me over the past two and a half years for inspiring them to pay off their debt or to raise their savings rate. It doesn’t come close to the sense of purpose sharing our journey has given me. The knowledge I’ve gained and the mindset shifts I continue to go through. The drive to improve myself in some way just a little each day. The opportunities I’ve been presented that challenge me to break through my comfort zone. The thicker skin I’ve gained.

If you’re on a financial journey of your own, I urge you to share it. Even if you think you have nothing new or different to share with the world and even if you don’t think you know anything. Your unique voice, perspective, situation and journey will speak to someone out there and could be the nudge someone needs to finally start.

You can always use a fake name like me. 😉

Thanks so much for reflecting on our mortgage-free journey with me and especially for following along with us the past two and a half years! Let’s see what we can make of the next year of being completely debt free!

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4 Comments

  1. […] of being completely debt free was on the 29th, and you can check out my celebratory blog post here to read a recap of this […]

  2. Savvy History says:

    Congrats to you! We will experience our first mortgage-free anniversary this summer. This was great for me to read and very relatable. Life has moved very fast for us too!

    1. Ellie Mondelli says:

      Life does move SO fast! Thank you and congratulations to you guys for being mortgage free too!

  3. Nicole Pritchett says:

    This is incredible! I love your story. Congrats! Freedom!

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