BABY STEP 6 * PAY-OFF THE HOUSE

 BABY STEP 6 * PAY-OFF THE HOUSE

Home Sweet Home is even sweeter when the mortgage gets paid off early! I know, because I did it!

This is the next step in the Dave Ramsey Baby Step Program.

So, you have gotten rid of your debt in the first few baby steps, you have a fully funded emergency fund, you are working on your retirement fund, or have funded it fully...

This step could take quite awhile, but will be worth it! I took on an extra job to put all of the income from it towards paying off our mortgage.

Consider some popular strategies for attacking a home mortgage:

• Make half payments every 2 weeks rather than a full payment monthly.  The trick here is that a 52 week year has 26 two week intervals which equates to 13 payments.  One payment more per year than the 12 month calendar.  On average, this approach will shave 6-7 years from a traditional 30 year mortgage.

• Many folks are electing for a 15 year mortgage rather than the traditional 30 year term.  Given how mortgages are amortized, cutting your term in half does not equate to a doubling of your monthly payment.  Often it is only a couple hundred dollars.  An easy increase to handle if you’ve eliminated your consumer debt.

• Extra payments are valid if you have an irregular income stream or are unable to refinance into a shorter term.  Pay raises, gifts, bonus payouts, etc are easy ways to ply additional dollars against your mortgage.

• Tag Team… imagine paying half payments every 2 weeks against a 15 year term loan and tossing a healthy chunk of your annual bonus into the mix as well.  Suddenly 30 years looks like 15 which looks a lot like 9, which can begin to look even smaller

Dave Ramsey Baby Step 4 Explained

 

Baby Step 4: Invest 15% of Your Household Income in Retirement

Now you can shift your focus off debts and what-ifs and start looking up the road. This is where you begin regularly investing 15% of your gross income for retirement. Because if you're still working at 67, it should be because you want to, not because you have to. An investing pro can help you build a solid strategy.

How: Here’s the simple breakdown. When you start this step, first look into your employer’s 401(k), if you have one, and invest up to the match. Then open a Roth IRA and max out how much you can contribute to this fund. If you hit the max and still haven’t reached 15% of your income, go back to your 401(k) and contribute the rest there!

Note: If your employer offers a Roth 401(k) and you like the investment options, you can invest your whole 15% there.

Because it’s so confusing, we suggest you don’t make money moves like that without finding a reputable investment pro. These people enjoy investment lingo but know how to talk to you in a way you can understand. They’ll listen to your preferences and help guide you on your investment journey as you set yourself up to save for the retirement of your dreams.

Dave Ramsey Solutions

Please note that I am not affiliated with Dave Ramsey or any links. I have done the baby steps

and just wish to share them with others.

Free At Last! :0)

Before May is over, I wanted to hit a couple of highlights...

Our yard looks so lovely in this shot--I just love it!

The BIG news from the month of May???

We paid of our MORTGAGE!
Yippeeee!!!!!

We had a fun family bonfire to celebrate :)

We burned the rest of our payment slips :)

My husband worked a lot of hours to get that paid off!

No wonder he's smiling--all paid!!!

Brad has been learning some golfing tips from his grandfather,

and he gave us some pointers...

Bri turned out to be a natural!

Fun stuff!

(although Brad hit one clear back into our neighbors yard--yikes!)

We thank God for providing for us and allowing us to have a home...that's paid for!

And, we're one step closer to being debt-free!

It seems like we should have extra money right now, but we don't yet.

We have to save for the real estate/school tax bill due Sept 1st,

and for our Homeowners Insurance.

But, we're getting there!!!!

Money Challenge...

I saw this today on facebook--and, I'm thinking of trying it....

thought I'd pass it along in case you want to try  it too?

Oh, only I'm planning on doing it backwards! :)