Top o’ the Mornin’ to Ya!
Baby Step 6 — paying off your home mortgage early. But before you get here, you need to make sure you’re taking care of Baby Steps 4 and 5 – investing 15% of your income into retirement and saving for your kids’ college (a good rule of thumb is $100/month per child).
Once you’ve got those bases covered, it’s time to attack that mortgage with gazelle intensity! Take any extra money you have and throw it at the principal. Get a side hustle, sell stuff you don’t need, and trim the budget wherever you can.
I know it’s tempting to lifestyle inflate when your income goes up, but resist that urge! Instead, use those raises to build wealth and knock out your mortgage faster. Imagine what you could do with an extra $1,000 or more in your budget each month!
The key is behavior change. Whether you make a little or a lot, you can choose to live below your means and prioritize your financial goals. And the peace of mind that comes with being completely debt free is priceless!
Now I know Dave Ramsey says to focus on Baby Steps 4-6 before moving on to 7, but I’m always dreaming about that last step – building wealth and giving generously. It’s the most fun part!
But for now, keep your eyes on the prize. Funnel every spare dollar towards that mortgage and watch the balance shrink. Your future self will thank you!
Here’s a quick overview of the seven baby steps:
1. Save $1,000 for a starter emergency fund
2. Pay off all debt (except the house) using the debt snowball method
3. Save 3-6 months of expenses in a full emergency fund
4. Invest 15% of household income into retirement
5. Fund kids’ college education
6. Pay off the home mortgage
7. Build wealth and give generously
You be blessed!
Financial Peace – Baby Step 6: Pay Off the Home Mortgage
