The Mistake I Made After Paying Off My Mortgage

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In June 2017 we paid off our mortgage.

Ahhhh the wonderful feeling we had once we were 100% debt free with no mortgage and years of hard work finally had come to fruition. Our son was only 1 month old, the timing couldn’t have been better. We were so proud and the feeling was fairly surreal.

This post is not about how we successfully paid off our mortgage, but what we did after, which is also VERY important and not often talked about! To see how we paid off our mortgage, Click Here

If you’re working towards a goal of getting completely out of debt and wondering what it’ll ever feel like, I will let tell you some of the feelings you will have the day you make that final payment:

Powerful

Proud

Relieved

So Much Potential

and…Like you are a Baller!!

But our biggest mistake that we made was that we didn’t have a plan for what would come next…

We knew that the house we paid off was not our forever home, but a home that would be a stepping stone into moving up into our dream home and keeping our first home as an investment. We didn’t have a plan for timing, budget, or anything for what would come next. So we kind of decided that we would start saving our money for the next house, which should happen fairly quickly since we no longer had a house payment.

Well…we also weren’t prepared for the powerful feeling that having no debt and more income than you’ve been used to would come with. Come July 2017 (only one month after we paid our house off), I went and bought a brand new car, with a loan and everything. My reasoning was that I had an infant and the car that I had been driving was pretty old with a lot of mileage and no longer felt as safe and reliable with my baby in it. I hadn’t planned for this as I didn’t know how much motherhood was going to change the way I viewed my car and my surroundings in general, so this was definitely an impulsive purchase. I also felt that the debt was so much smaller compared to the debt of paying off the house that it would be paid off in no time and we would just take the same steps we took toward paying down our home debt. I have to say I have mixed feelings on this decision…there was really no way around that I would need a new car with the baby. A lot of people change their vehicles when they have a baby. However, if I could go back I would not go brand new. Let’s admit that the easiest route is brand new, even though it is ultimately costing us thousands! Going to the dealership and essentially driving off the lot that day with a shiny new car is so much nicer than doing your homework, searching through craigslist, meeting with private owners and eventually finding the right car and deal. As a tired new mom on top of that? No thanks.

As a side note, I did get the best loan out there through LightStream, they beat the dealership’s interest rate and no one believed me when I told them my rate was 2.19% (rates vary and I have excellent credit so I am in no way guaranteeing anyone the same rate).

So what’s the point of all of this?

The point is that if we don’t keep planning and making goals, we will jump back into what is familiar. My poor decision came from the feeling that I suddenly had a lack of a large bill (mortgage payment), plus all of our extra income we were putting toward principal, that I could not only afford, but DESERVED, a brand new car after all of my hard work. I went back into debt which is what I was used to. 

If you’re getting close to getting out of debt, make a plan for what you will do next with your money! If it does mean a new car for you, like it did for me, that’s okay too. As long as it’s part of your plan and not on impulse.

Fortunately the last few years in my career have been very good in real estate and my husband’s job has been going well so we have been able to maintain or even improve our income level to continue to save a lot toward our next home so that we will eventually be in our dream home and renting out our first time home and on to our goal of passive income and eventual financial freedom!

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