Tag Archives: goals

We Crushed Our Goals: Mortgage and Carpet, Check

Fiesta Grill

Six months ago, Mrs. Pennypacker and I set two goals for ourselves:

  1. Pay the balance on the mortgage down to 39%.
  2. Buy and install new carpets.

Six months later, I’m happy to say we crushed our goals! The mortgage is now down to 38%. We actually were on pace to get it down to 37%, but I’ve been so busy with my day job lately that I forgot to add an extra payment to the last one we sent in. Still, we’ll take it.

The carpets are all in. That one was fun. I’ll never forget the look on Mrs. Pennypacker’s face when she unwittingly wandered into our house full of fancy new flooring.

So, what are we going to do to reward ourselves?

We’re buying a new BBQ grill. We haven’t decided what kind yet, but anything would be better than the one we have now. It’s about nine years old (which isn’t necessarily a bad thing). The handle for the lid broke off a few years ago, so we’ve since had to use our finger-tips to finagle the remaining plastic nub. The ignition switch is borked, but we’ve gotten used to lighting matches. The built-in thermometer is dead, but we’ve improved our other senses so we can more or less detect when the meat is cooked. The drip-pain broke, so every time we cook, the dogs are gifted with a scrumptious pile of grill drippings. Again, the new one doesn’t have to be anything fancy. It just has to work.

So, what about the next six months?

I think we can be a little more aggressive this time. I say we can knockout 8 percentage points and get that mortgage down to an even 30%.

Six months ago I was not real hopeful about getting the mortgage completely paid off by the end of next year. But, as we get closer to the end, I can feel the optimism oozing back in. I think we can continue to ratchet up the extra payments next year and get that remaining balance pretty darn close to zero.

Basketball Coaches Preach Divide and Conquer

Divide and conquer your way to financial independence


Most people can accomplish the tiny financial goals in life like going to the grocery store or paying the monthly bills.  Even the slightly larger goals are generally doable like buying a new TV or finding a new job.  But, what about the bigger goals like buying a house or saving for a car?

It’s difficult to sustain the drive needed to accomplish big goals.  Things like paying off a mortgage or saving for retirement can seem daunting, even dismissed by some as impossible.  But, if the big goals in your life are divided into smaller micro-goals, the odds of conquering them go up.

Basketball coaches as a group have mastered the art of divide and conquer.  I was watching the Duke vs San Diego State basketball game yesterday and something one of the color commentators said stuck with me.  Grant Hill mentioned that Mike Krzyzewski, the coach for Duke, takes the big goal of winning the entire NCAA Tournament and breaks it into smaller chunks.  Instead of looking ahead at who they might play if they make it to the final four, he keeps his players focused on no more than two games at a time.

If you’re not familiar with how the March Madness basketball tournament works, here’s the simple explanation:  In order to win the tournament, a team must win six games in a row over a span of three weeks.  Lose once and you’re out.  In order to be the team left standing at the end, Coach Krzyzewski has to trick the minds of his players into thinking they only have to win the next two games.  If they start thinking five or six games ahead, the goal becomes bigger, less tangible, and possibly unattainable.

Besides dividing the tournament up into bite-sized chewable nuggets, each basketball game can also be sliced into smaller slivers.  You might hear a coach emphasize to his players the importance of winning each half or even each ten minute segment of the game.  Don’t worry about the end of the game.  Just try to make the next basket, grab the next rebound, or block your opponent’s next shot.  The concept is simple.  If you win each chunk, you’ll win the game.

For most of my life I was terrible at long-term thinking.  I just floated along, limiting my attention to the next day, week, month, or maybe year.  However, as I’ve grown, I’ve started paying more attention to the big goals that lay further out on the horizon – saving for big purchases, paying off the mortgage, investing for the long-term.  But, instead of letting myself get intimidated by the size and scope of these goals, I’ve adopted the divide and conquer strategy used by basketball coaches like Mike Krzyzewski.  I fool my brain into thinking I’m only accomplishing micro-goals:

  • Put away 15% of my income in retirement accounts this year – win
  • Pay off five percent of my mortgage over the next six months – win
  • Save $300 for a new car this month – win

With each of these small victories, I secretly get closer to winning the big prize – financial independence.

Have you tried the divide and conquer strategy with your big goals?


Our Mortgage is Officially Half Empty

With this month’s mortgage payment Mrs. Pennypacker and I have officially met our goal of paying down half of the mortgage by June.  It’s been 8 years since we originally bought the house.  Back then, we weren’t even thinking about paying off the mortgage early.  We were just excited to have a house.

Our initial mortgage was a scary one.  We only had 5% for a down-payment, so we took out a first mortgage for the first 80% and a second mortgage for the remaining 15%.  The second mortgage had a high interest rate (9% I believe), but it was a fixed rate.  The first mortgage had a lower interest rate (6.5%), but it was an interest-only 5 year ARM.  This meant our payments would be low for the first five years because we were only paying interest.  Then after five years, our payment was would balloon to include principal.  Plus, the interest rate would adjust to the market rate.  It really wasn’t the smartest financial move on our part, but at the time, all we were worried about was getting into our first house.  Since then we’ve refinanced three times and we’re now sitting pretty comfortably in a 15 year fixed mortgage with an interest rate of 2.875%…ah, much better!

It was just a couple years ago that we started getting serious about paying down the mortgage early.  In the past two years we’ve gone from only having 25% of it paid off to 50% today.  And the rate keeps accelerating!  If we just kept going at the same pace, it will only take 3 and a half more years to be done.  But, there’s a bit of a snowball-affect.  As you get closer to that final payoff date, the amount of interest you’re paying decreases and a growing percentage of your payment goes to principal.  Also, your motivation tends to grow.  As you close in on that finish line, you’re excitement builds, and you start looking for spare change to throw at the house to get you there just a little bit faster.  We may end up getting it done in less than 3 years!

Paying off your mortgage early can seem like a daunting task at first, but if you break it up into shorter milestones, you start feeling little sparks of accomplishment along the way.  We also give ourselves little rewards at the end of each milestone.  For reaching the 50% mark, we bought ourselves a set of Adirondack chairs and a fire pit for our patio.

I think out next milestone will be 43% by the end of the year.  Not exactly a round number like 50% was, but it’s a makeable goal.