chuckle for me!

[debtfreeme]

I had to share (chuckle!) I have been talking to a friend of mine and his wife about the importance of being out of debt and having things paid off for a long time. They have slowly worked on their credit cards and finally have no debt except for their mortgage (took several years but they did it!)

I showed them amortization tables about their mortgage last time we spent time together (over a year ago!) and showed them how much interest they are paying versus house and we talked about how they could limit that by paying more on their principal, paying twice a month etc. Their bank won’t work with them for the bi weekly payments but he did something that made me smile.

He drafted up an excel spread sheet that listed all the months they have left to pay off their mortgage. They figured out how much they would have to pay each month if they wanted to make four extra payments each year. Basically make one extra payment each quarter toward principal. Then he actually just listed months down the side of the sheet to represent how many months they have to pay left on their mortgage with this plan. (you know January 2020, February 2020 etc.) As they make an extra payment he can cross off a month at the bottom of their sheet there by seeing in writing when they would make their final payment. They are so excited to see it dwindling down. They have been doing this almost a year. It hangs in one of their cabinets in the kitchen and as they discuss what to do, or what to buy, or what to do for the house etc. they can open this cabinet and see right there how there plans could affect them.

I am so proud of them! So proud!

[creditcardfree]

Oh, let them know I'm proud of them too. That's awesome. It sure helps to have a plan!

[LuxLiving]

You have a convert!!! How very persuasive you must be!! Would you care to take a turn on The Hubster? We've got the money and could pay off our house TODAY - but he'd rather have the dollars in the MM where it earns less interest than we are paying on the mortgage.....AUCCGKHKHJAIOPIOPI&*&*(^^$)!(!!!!!!!!

[greedy4chips]

Charles Givens a financial guru from the 80's promoted using an ammortization schedule and making the additional principal payment equal to the next month principal. This cuts your mortgage in half. Most couples can do this early on in their mortgage, since the principal is so low. It becomes much more difficult after half to two-thirds of the mortgage is paid off.

Luxliving... You have to have your hubby at least put a large portion of that money towards the house. Keeping $20k or whatever in the MM wouldn't be a bad idea if that is your only EF. I would love to have the mortgage paid off and would care less if I had a dime in savings to write that last check.

Also you are probably not able to itemize much of the interest on the mortgage if any at all, so you have very little tax benefit. You also have to pay taxes on the interest earned in the MM, so I bet you are actually losing money overall. This info is intended to convince him, since I know you know how it works.

Good luck convincing him!