There's not much in life that is more freeing than finally paying off a large bill. Suddenly, our checking accounts are flush; the future feels more open, and even our favorite jeans seem to fit better. When it comes to a mortgage, of course, that seems so far down the road it's difficult to imagine, particularly for those just starting out. If you've always paid rent or a mortgage, it just kind of feels like that bill is always there, the background noise of your life.
So, when 30-year-old Canadian resident Sean Cooper paid off his mortgage in three years last year, he celebrated by burning his mortgage papers and found a news crew to film it. But, here's the twist: He isn't happy about it, and judging from social media posts and comments on the news coverage, no one else is, either. In fact, Cooper seems full of regret and everyone else is full of scorn or pity. What's going on?
Cooper sacrificed a lot to pay off his mortgage, and even he admits he focused too much on his financial goals. He worked three jobs, including as a full-time CAD technician $75,000 (about USD $56,000) white-collar job, a customer service job at a local grocer, and writing freelance articles. In addition, he supplemented his income by living in the basement of his home while he rented the house to others. As many commenters note, that's not a healthy way to live and it's unsustainable.
Often, we lose sight of what's around us when we focus on our financial goals. That moment when the bill is paid seems so sweet that we don't really think about everything it'll take to get us there. If you'd like to make financial headway on your mortgage without making yourself crazy, we've collected some tips below. The key idea among them is finding a balance, so you'll need to adjust them for your own personal situation. If you'd like a more personal meeting to discuss your financial goals and finding balance, let us know. What do you think about paying off a mortgage in less time than it takes to earn a college degree? What would you do differently from Sean Cooper?
Take gigs, not jobs. It's easy to see why renting out one's home and securing extra employment are so appealing. Regular income feels safe and makes it easy to plan ahead. But extra employment can also be confining; it’s difficult to work full-time and still find time for your hobbies, your family, or the occasional afternoon spent binge-watching Netflix (something everyone needs occasionally). If you don't find time for your hobbies, you'll find that your job has become your hobby. If you don't spend time with your family, you just won't have the bonds that families need.
Instead, look at gig-based jobs like Uber and Air-BNB. While they might not offer the steady income of a regular-hours job, you can scale your work up or down depending on need and availability. Plus, if you don't feel like working on a given day, you don't have to. With Air-BNB, the owners of a rental property can cancel for any reason with as little as 24 hours’ notice. That's the kind of fantastic option that's not available if you have renters who are playing their music a little too loud above you.
Turn your hobby into a gig. If you want another way to generate income, one that doesn't require you to do mindless tasks, and you want to keep enjoying your hobby, then it might be time to turn that hobby into a gig. Do you scrapbook or make crafts? Open a store on Etsy. Are you an avid collector? Start investing and re-selling collectibles on eBay. Do you build or tinker? Time for a workshop. Have a design? Put together a working prototype and take to Kickstarter. Want to write a novel? The Martian started as a fan-made, self-published ebook. It's never been easier to find an audience or customer base.
If you're looking to make the move from weekend warrior to someone who can make money with your passion, get some start-up capital. You'll need workshop space, supplies or a new laptop. We've got a lot of ways for you to invest in yourself. Who knows, that investment could be the start of a new path to leaving the rat race behind.
The goal is financial security, not paying off a single bill. There's no prize in paying off your mortgage. It's just one less bill to pay. Your goal is overall financial security. That could mean refinancing your mortgage to have cash in hand when interest rates are low or investing significantly when interest rates are high. So, don't pay off your mortgage while racking up credit card debt or neglecting your student loans. Instead, take a look at all of your debt. Work from the highest interest rate to the lowest, paying off each in turn, so you can pay as little interest as possible every month.
One of the easiest ways to do this is with a home equity loan or a balance transfer option. Sometimes, simply calling the credit card companies with a check from your home equity loan in hand will get them to drop the rate you're being charged. Fantastic! Now you can use your loan on a different card.
Whatever you do, you've got to be happy. It's difficult to find balance, particularly with debt and obligations hanging over our heads. The solution isn't to take on more obligations and retreat from humanity. The solution needs to be understanding that money exists as a means to an end, not an end itself.