How We Paid Off Our $20,000 2nd Mortgage In 6 Months
- by DoggedFI
- posted June 19, 2017
Anyone following my site may be familiar with my posts about rapidly trying to pay off one of our few remaining debts (our 2nd mortgage).
Well fellow FI’ers, the day finally came. I went to the bank on Thursday and made the last payment on our 2nd mortgage. We wrote an even larger check than normal, but it felt so good to finally put the last nail in that coffin!
It wasn’t until late the next day, but they finally updated our online account balance to reflect the goose egg goodness. 🙂
If you’re anything like me, debt is like a black cloud constantly in the back of your mind. Its an ever so faint pressure, but its always there. Taking this second-to-last liability off of our net worth “balance sheet” was extremely rewarding for us.
Anyone with a little discipline can crush their debt(s) just like us. We aren’t super heroes, we just made a plan and consistently stuck with it. I’ll tell you exactly how we did it.
Our Debt Paydown Methodology
1. Analyzed the current situation
In the past, we had already set a pre-determined amount to be direct deposited into our joint checking account biweekly. This pile of money then auto-pays all bills with next to no input from us (automation, baby!). We then determined how little we could each live on in discretionary spending until the loan was paid off. As it stood, the note was ~$203 per month and we were already paying $300 per month.
2. Formulated the plan of action
After running some numbers, we determined that between the two of us, we could manage to pay an extra $1,500 biweekly toward the 2nd mortgage debt, in addition to the regular $300 monthly payment. At that rate, without stopping, it would take us right at 6 months to pay it off completely.
3. Began executing on the plan
We increased our auto-deposits to the joint account and began writing the extra $1,500 check every other week, beginning in January of this year (2017). We both already budget our money pretty well so it was just cutting back slightly and moving money toward the debt instead of into our savings accounts.
4. Consistently stuck to the plan each month
We were able to stay on track even after we had a few unexpected pet and vehicle expenses pop up. It wasn’t fun during those months, but we still didn’t quit.
We made the last payment of $1772.63 this past Thursday for a total of $20,061.63 in roughly 6 months time.
At the core of all this, my wife and I just used a common framework that we were taught in nursing school: Assess, Diagnose, Plan, Implement, and Evaluate (ADPIE). Apply it to your situation and you’ll be surprised with the progress you can make!
Are there any debts you’re currently snowballing? Comment below with your plan and progress!