I have vowed to pay off my mortgage by the end of this year, 2014. At the end of February, I still owed $53,800 to the bank, but then March happened (which was a good thing!) and I was able to take this balance down tremendously. I sold my extra car, received a hefty tax refund check, and got some money from my insurance company. After March, I was able to put over $10,000 toward the house debt and brought the balance down to $43,524.
Paying Off The Mortgage: A Decent April
There were no more money windfalls like there were in March, but it was a pretty good month considering. If you remember, I had a big tax refund from last year (which I don’t necessarily like because that means I’ve been letting the government use my money for free), so I thought I would alter my dependent number from 0 to 1, which ended up putting an extra $40 in my paycheck every two weeks. Beyond this, my website brought in a decent amount of money again. Nothing crazy, but more than usual. And finally, my expenses were down this month. My car insurance company charged me too much in March, so the April bill was hardly anything. I spent a minimal amount on food and gas again, and my car hasn’t had any unusual expenses either!
All in all, April was a pretty good month and I was able to accomplish what I wanted. With no extra huge amounts of cash flowing my way, I was still able to scrounge up $3,524.08, which puts my mortgage balance at $39,999.99. 🙂 I made it below $40,000! YES!
As you can see in the chart above, I am still below the orange line, which is awesome! However, in order to stay below that line, I need to come up with $5,400 a month to put toward the mortgage. That, my friend, is a pretty tall order, and I have no idea how I am going to keep my payments that large each month.
Projected May Payment
Instead of looking into the distant future (which seems a bit daunting at the moment), let’s only focus on the next month, May. This past month, I was able to come up with just over $3,000 somehow, because everything just seemed to go right with the budget. This next month, I am going to be a little more conservative with my estimate since I am buying a bicycle (my reward for getting my mortgage below $40k) and I have a few other random expenses coming in (replenishing my contact supply and a few doctor appointments). By working hard and earning money where I can (mainly, through article writing), I still expect to have $2,500 extra dollars this month. On top of this, I am getting reimbursed from my work for my college expenses, and May is a triple pay month! For these reasons, I expect to pay another $7,500 on this loan, which will bring the balance down to about $32,500.
Now, if you remember, I built up an emergency fund of $15,000 before I started this crazy house-payoff strategy. By the end of December, I expect that I will still have $10,000 or so to pay off and I might just use some of this reserve to cover it. So, the moral of the story is, I am going to try my hardest to keep myself below that orange line, but if I happen to float above it toward the end of the year, I do have a back-up plan to cover the last bit of expenses.
Whew! What do you think? Am I going to make it?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.