Ever since I bought my house back in August, 2011, I have had the intention to pay it off early. Well, then life happened… (we’ll leave it at that). But, as of January, 2014, I have refocused my energies toward this house pay-off! In the beginning of January, I owed about $54,500 on my 3 bedroom, 1.5 bath home, and I planned to pay off the total amount by the end of December, 2014 (yes, this year!). Here is how the payoffs have gone thus far:
- January – $54,217
- February – $53,871
- March – $43,524
- April – $39,999
- May – $34,120
The balance has definitely been coming down! In five short months, I have paid off over $20,000 worth of debt. Hopefully I can keep this train rolling!
The Mortgage Payment in June
In my last post, I did not expect to pay all that much to my mortgage debt because I thought property taxes were on the way, which would have been an $1,800 bill or so. Thankfully, those taxes did not yet come so I did not need to take that hit in the month of June (but I’m sure I’ll see them this month so I won’t get too excited just yet). However, I did have to pay my quarterly business tax of $850, so that did hurt a little.
The budgeting in June (as you can see in my previous post) was amazing. I did not need to fuel my car at all (thanks to my bicycle) and my utilities bills are finally low again. Outside of my business tax, I spent less than $1,000 in the month. That’s pretty incredible! Think of how cheaply I could live if I didn’t have a mortgage!
I kept my expenses low in June, but I also worked my butt off to earn a decent side income. One of the major ways I planned to increase my income in the month of June was to write articles, and boy did I! In just that single month, I wrote 64 additional articles (on top of the articles that I write for this site). In total, I think I wrote about 75 articles, which probably equates to about 45,000 words typed in one month. Phwew!
My loan balance at the end of May was $34,120. With my minimal spending and my extra efforts writing, I was able to put another $2,868 toward the mortgage and bring the balance down to $31,252.
That Dreaded Orange Line
At this moment, I am still technically below the orange line, which is the payoff pace I need in order to achieve my house payoff by the end of December. With my property taxes still on the way, I am not feeling all that great about this position on the chart. In order to stay below the orange line in July, I need to pay my mortgage down to $26,936, which means I need to come up with $4,317…Yikes….
So if you factor in those $1,800 property taxes, I need to find $6,117 of additional money. I’m all about optimism, but this simply is not going to happen. I need to start calculating what is necessary for the long term to figure out if I’ll have enough to make the payoff by December.
By keeping my expenses low and by continuing to write articles (by the way, if you need more articles written, let me know!), here is what I can expect to accomplish in the upcoming months.
- July – $30,000
- August – $27,500
- September – $26,000
- October – $22,000
- November – $19,500
- December – $17,000
Based on my projections (by continuing to do what I’m doing), I can realistically pay my mortgage down to $17,000 by the end of December. If you recall, I do have a $15,000 cushion in my savings account that I could use toward the payoff, but I certainly don’t want to use it all since this is technically my emergency fund. At most, I would feel comfortable putting $10,000 toward my mortgage, which would put my mortgage number at $7,000. It’s respectable, but it does not allow me to hit my goal. I need to figure something else out.
Can you think of ways that I could increase my earnings each month? Any advice is welcomed!
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.