Mortgage Pay-Down Goal, Check…Well Almost

yellow house mortgage

It’s been six months since Mrs. Pennypacker and I set our last mortgage pay-down goal and I’m sad to say we didn’t quite make it.  The goal we set in July of last year was to have the mortgage paid down to 30% left by the end of 2015.  As of now, we’re at 30.5%.  Yeah, I know.  We’re pretty darn close.  Okay…really…now that I look at it some more, we’re sooo close, I’m just going to round down and call it accomplished.

Goal-Over-Reach

I can’t think of any particular reason why we fell slightly short this time.  No big, unexpected expenses came up.  Our income stayed pretty steady.  I think it’s just a small case of goal-over-reach.  It’s no big deal.  Setting goals isn’t a perfect science.  Sometimes you make it to the top of the mountain ahead of time and sometimes you come up a few feet short.  The key is to adjust your goals so that next time around you’re right on target.

A little easier this time around

Since we set our sights a little too high last time, this time around we’re going a little more realistic.  Our goal will be to get paid down to 23% at the beginning of July.  I’m likely to get a raise at my day job and Mrs. Pennypacker may get a bonus at her job, so we may end up surpassing this number.  But, we’re not counting these chickens just yet.  Our goal should still be reachable, even if our income stays flat.

So, when’s Mortgage D-Day?

The crazy unicorn dreamer in me says we’ll pay the entire mortgage off by the end of 2016.  If both Mrs. Pennypacker and I get raises this year, and we throw a little savings in towards the end, it just might happen.  On the other hand, the realistic dream-killer in me says we’ll pay it off by the middle of 2017.  I suppose we could live with another 6 months.  But, it just sounds so nice to say it will be done in a year.

Is this the right thing to do?

We still believe it is.  Most experts think the stock market will be fairly flat next year.  By paying off our mortgage early, we get a guaranteed 3% return on our money.  That certainly beats any savings account out there right now.  Plus, once it’s paid off, we’ll have more money to invest elsewhere.

The best thing about paying off the mortgage is the flexibility and security you gain, by not having that giant beach towel of a mortgage payment soaking up your paycheck every month.  Without that payment, if one of us gets laid off, we’d still have enough income to cover our day-to-day expenses.  And, if one of us wanted to switch gears and go after a dream job that maybe didn’t pay that well, we could still support ourselves.

But what about the tax deduction?

We’d rather have our house completely paid off and pay zero interest, than keep paying interest just so we can get a 25% discount on that interest.  Besides, if we really miss the tax deduction, we can always just give more to charity.

Rewards?  Sure, why not.

We like to reward ourselves when we accomplish a goal.  Last year we bought new flooring.  Six months ago we bought a new bbq.  This time around we’re buying a new laptop and a new couch.  The laptop is in the mail and should be here next week.  The couch is still being decided on by Mrs. Pennypacker, but I’m sure it will be forthcoming.

Did you accomplish your goals for last year?

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