As you may have already read, the only debt that Mr. BFS and I have left is our house. We paid off my car in 2007 and paid off the last car, my husband’s Prius, in 2010. And after refinancing our mortgage this year (February 2011), we had about $69,000 left. Our payments went down from $740 to $515 a month for 15 years, but we continued paying $900 a month as we have since we bought it in 2007. As of today, we owe about $63,000 more, which means that we are currently on track to pay off our house in 2017, so about 10 years total.
Our New Goal
Well, we are taking another look at that goal. Now that I am making significantly more than I was, but we are trying to continue living on the same budget, we’ve been having a bunch of left over cash at the end of every month for our emergency fund and investments. Since we are already happy with the emergency fund staying at $10,000, my husband and I just decided to divert the extra towards principal repayment on our mortgage instead. We’ll continue investing in stocks and mutual funds as well with the monthly extra that is ear-marked for that, but repaying our mortgage is a guaranteed 4.5% return that would make us happy too.
If I do dig in and continue to make at least $8000 a month or more every month, then we should have our house paid off in a little less than 2 years. That would mean we bought our home in 2007 and are planning to pay it off towards the end of 2013 – 6 years total!
In short, our new goal is to be 100% debt free by the end of 2013!!!
The Plan
In order to hit this new 2013 goal, I’ll start posting the mortgage payoff updates on Sundays to keep me honest. I will probably only have updates once or twice a month though since that’ll be the only times that I’ll be writing extra checks. As of right now, we’ll continue having the $900 automatically withdrawn every month for our basic overpayment of $385. Then, after I see how much our monthly extra actually is, I will make an extra principal payment at the bank. Between these two payments every month, we should be seeing a huge drop in what we owe right off the bat.
Our Reward – Party and Recliners
If we do hit this goal, we have decided that our reward will be to spend one house payment, so $900 or less, on a party for all of our closest friends and two new recliners.
For the party, we’ll throw our highest-class potluck yet. We’ll splurge on steaks and chicken breasts to grill for everyone and they can bring their favorite sides. I’ll make the sweet potatoes that they all like and we can board game and talk into the night!
The recliners have been a purchase we have been putting off since we have two pretty good hand-me-downs from my husband’s grandparents that are nice enough that we just couldn’t justify buying the nice, plush leather ones that we both want. I figure the recliners will cost about $600-$700 since I’ll find a BOGO Free sale or general sale before we splurge. Then we’ll up our Contents Insurance, lol. The party will run about $200 since the steaks will be about $5 a person for 20 people and we’ll supply the plasticware and drinks and stuff like that as usual.
Thank you all for the support you give me just by reading. I hope you don’t mind being used continuously to keep me on track, lol. It really does help to have all of you to be held accountable to.
Do you have a goal you’d like to publicly announce? Feel free to use us all to hold yourself to it too!!!
Congrats Crystal. One line in your post struck me – “but repaying our mortgage is a guaranteed 4.5% return “. If only more realized this simple, yet powerful truth!
What a great goal! It’s pretty exciting to be able to pay off a mortgage or any debt earlier than you thought you would be able to previously. I am working on paying off my car note in about 8 months which will be 2 years sooner than expected.
That sounds like an awesome party – you can count me in! That would be so awesome to be debt free in 6 years even after a house purchase. It’s nice that homes are fairly cheap in Houston, but that still represents a lot of hard work on both of your parts – congrats and good luck!
Can I come? I’ll fly out from NY!
Sounds like a really cool goal. Currently my goal (which I don’t share on my blog that often) is to save up enough cash to put 20% down on a 500K home, which by the way isn’t that spectacular here on Long Island.
I am not there yet, but making moves!
@Moneycone, yeah, especially since we don’t even get to itemize the interest…it really is a 4.5% return.
@LaTisha, woot for car payoff!!! Good luck!
@Jeff, come on down, you are more than welcome.
Thank you!
@Evan, you are more than welcome too! Good luck on your $100k goal!!!
Congratulations Crystal! Question – did Mr. BFF and yourself consider investing the extra capital instead of paying off the mortgage early considering money is cheap today?
@Sunil, we invest money as well. The way it works out is that we pay about $400 extra in principal to our mortgage every month. We also invest at least $200 every month. With our extra money, we were investing 35% of the leftover and putting 25% to cash. Now we will invest 25% of the leftover instead and throw 35% towards the mortgage. So we will still be investing about $1250 a month and paying about $1500-$2000 a month towards the house during my high earning months.
What a great goal! I will be quite curious to see how you guys are doing with it. Knowing you though, I am pretty sure you might be able to pay it off faster than your planned deadline.
Your ability to avoid lifestyle inflation is motivating. But I challenge you to pay off the house in 12 months! Hey.. I was right about your advertisement income, let’s put some pressure on the goal of paying off the house. I would also like to make a request that you have a post where you are burning your mortgage (mortgage burning party). Good luck!
Good for you!!! I’m looking forward to your updates.
I have a goal to get the rental property paid off. Having it paid off in 10 years is reasonable but I’m really aiming for 5. 
We’ll see how it goes.
Great new goal. The mortgage will go quickly if you put all your windfalls into it Don’t listen to the haters who think your dumb for not using cheap money. You’ll be laughing all the way to the bank.
Truly inspiring. Need an intern, lol?
I am so happy for you! I am excited to follow your journey of no more mortgage! My goal is to pay off my Credit Card Debt…. in 18 mos. Yeah!!!
Great job! It’s so exciting to pay off a mortgage, and it’s even more exciting to pay it off in 6 years — fantastic!
It sounds like you have been reading Derek’s blog. He also has a similar goal. I absolutely LOVE IT! I don’t know what it is, but something about reading about other people’s plans to get out of debt as fast as possible makes me want to go buy a house and pay it off as fast as possible.
I guess that means your writing is inspirational! I can’t wait to congratulate you on your goal.
Great goal! We don’t even have a mortgage yet but I don’t think we will be able to pay off in 6 years.
Looking forward to your updates.
What an amazing goal and I know you can do it! I plan on buying a new home next year and my goal is to have it paid off before my daughter starts college. That’s a lot longer than 6 years but I’m hoping to absorb some of your motivation!
Wow! With an increasing income comes increasing goals huh?! Good for you guys. Think of the savings and investment rates you’ll have after that mortgage is paid off? You will be able to watch the news and see those (inevitably) climbing interest rates and just laugh at the rest of us!
Sounds like a great goal and will be a great feeling. I’ve refinanced our house so many times seems we’ll be paying for it forever.
First goal is cc pasod of by may next year then working on 2nd mortgage
Love this goal because it’s MINE! We have ABOUT the same balance too. My stretch goal is to pay it off by the end of 2012! I think you could do that. Between you and your hubby, you’re making a lot more than me. Can’t wait to see your updates.
that is beyond inspirational. I wish you all the best in your adventure! I’m rooting for you!
Way To Go! that’s awesome, we refinanced but our payments went up since we went from a 30 yr to a 15 yr. Still worth it, couldn’t afford not to do it.
Go Crystal go! You’re on a roll. You guys will definitely get it done.
Nothing like having an extra pile of cash sitting around at the end of the month!
Congrat’s Crystal. We’re very happy for you both! WTGo! 
wow…living the dream hehe
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