7 Things to Do When Your Mortgage is Paid Off

7 Things to Do When Your Mortgage is Paid Off April 24, 2013

One of the best ways to motivate yourself to achieve a difficult goal – like paying off your mortgage – is by visualizing what you will do once you accomplish it. Here are some possibilities that can make paying off your mortgage early even more desirable than simply eliminating a very large debt.

1. Celebrate!

Yes, celebrate. In this day and time of revolving debt – including revolving mortgages – relatively few people ever actually pay off their mortgages. Most either refinance every few years, either to get a lower rate or to take cash out, or they never stay in their house long enough to ever pay it off.

If you manage to pay yours off, you’ll have done something that is increasingly extraordinary and worthy of celebration. Take a second honeymoon or a trip someplace truly exotic, or some other activity that you’ve been putting off, to reward yourself for a job well done.

2. Begin paying off non-mortgage debt.

Once you are done celebrating, it’s time to use the extra cash flow from the now nonexistent mortgage payment to start making some real differences in your life.

With your house payment now consigned to the history books, this will be an excellent time to work on achieving complete debt freedom! You can redirect the extinct house payments into paying off any non-housing debts that you have.

With the mortgage gone – and all your other debts too – you will have a stronger cash flow than you have ever had in your life. And there’s a whole lot you can do with that.

3. Increase your giving.

When you are in debt it’s often difficult to give to either church or charities. But with your debts safely behind you, you will be in a better position to give more generously. At least some of the savings that will result from not having any debt, could be directed into increased giving.

If there has never been much room in your budget to do this in the past, this will be your second chance. Anytime we become more prosperous, we should see that as an opportunity to help those around us.

4. Load up your emergency fund.

While there may be a real desire to increase your investments out of your improved cash flow, building up your emergency fund is one of the best ways to give yourself a sense of financial peace. If you have been keeping your emergency fund at a level sufficient to support three months of living expenses, increasing it to a 12-month reserve will go far in eliminating any short-term financial concerns, such as the loss of a job.

The larger savings balance will be important in freeing your mind to make sound financial decisions in all areas of your life.

5. Increase contributions to your retirement plan.

One of the biggest advantages in paying off a mortgage early – especially if you do it early in life – is that it frees up money for greater contributions to your retirement plan. That will open up the possibility of either early retirement, or a more comfortable retirement at the normal age.

Let’s say that your mortgage payment is $1,000 per month (just principal and interest of course) and you pay it off at age 45. If you direct half the money into retirement savings and the other half is used for other purposes, that will enable you to increase your retirement contributions by $6,000 per year. If you do that for the next 20 years, that will represent an additional $120,000 in retirement savings – plus investment earnings on the extra savings.

6. Help a few people around you.

We’ve already discussed increasing charitable contributions as a use for the money saved from your missing mortgage payments. But think back on your life – in your younger days when you were just starting out, were there people of greater financial means who helped you in your times of need?

For most of us the answer to that question is an emphatic yes! Think of this time as your chance to give back. You may not be able to give to those people who helped you, but you can help those around you who are in a position similar to the one you were in early in life. If God provided “angels” to help you in your time of need, then maybe now is your time to be an angel to someone else.

7. Live a little.

If you’ve paid off your mortgage, you’ve overcome a major hurdle in life. Now is the time to live a little in your life, in a way you couldn’t earlier on when your finances were tighter. Take advantage of that opportunity!

Work a little less, spend more time with the people close to you, go on mission trips, do more of the things that you always wanted to, help where you can, and be purposeful about living a happier and more productive life. You’ve made the effort that got you to where you are, and now it’s time to kick back and enjoy it.

If you can concentrate on the benefits of paying off your mortgage – rather than treating it simply is an obligation that needs to be satisfied – it might actually get you to the goal faster.

What goals would motivate you to pay off your mortgage early? Leave a comment!

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What Are Your Thoughts?leave a comment
  • LOVE this! I can’t wait until the day we have no mortgage.

  • I would celebrate too alright. if I’m done with my mortgage, would increase my retirement plan and then will give help to charity more.

  • Michelle

    When we paid the house off a year and a half ago, we kept putting the same amount in an account for remodeling. After 22 years and 2 kids and their friends, it needs new carpet/flooring, new sinks, new appliances, countertops, new tub, etc. We’ve made a dent but there is still a lot to do but it’s great not to take out loans for these redos. The goal is to downsize by selling a good looking house.

  • Benefits of paying mortgage early

    Without a mortgage you have more cash flow to invest at the end of every month. And this can help your retirement savings .