Two years without a mortgage

It’s hard to say what has changed because so many other money things have changed as well.  DC2 is no longer in preschool so we’re not paying for that, and DH and I are both getting full-time salaries (and we’ve both gotten raises).

Our non-mortgage/non-daycare spending has definitely gone up.  We were in the city the other day without the kids and didn’t even blink at spending $30 at a cafe for two meals (duck confit and bean ragout for DH and blood orange beet salad for me).  We’ve been flying to DH’s family for Christmas instead of driving.  Whenever I’ve been feeling stressed, I hit up donorschoose and drop $25.  And there’s been all that political spending.  And summer camps aren’t cheap.  But, with the exception of DH’s new car (can we really make that an exception?), I don’t think this additional spending has completely caught up to the $750/month we were spending on daycare plus the $1,214.40/month that was going directly to payoff our mortgage.  (Not including property taxes and insurance, which we still have to pay and both of which have gone up quite a bit in the past two years.)

So I guess bottom line– Not having a mortgage has increased our spending, but it hasn’t been a 100% offset.  Not having a mortgage has also increased our monthly cashflow cushion.  There’s just more left over at the end of most months.  The first mortgage-free year (when DC2 was still in preschool much of the year) I was still having to dip into savings on occasion to pay the big bills like income tax or property taxes, but this year I was able to cash-flow property tax from DH’s salary (DH’s salary direct deposits into checking and mine into savings).  We’re not really living on just DH’s salary because almost all of our retirement savings and benefits spending comes out of my paycheck, but for the past year (minus the car purchase) it sure has been feeling like we don’t touch my income.

We’re also now almost getting to a point in which we have to decide what to do with the extra build-up of money since we’re maxing out our tax-advantaged retirement savings (including backdoor roths!) and have paid off all our debt.  We do have a list of important big expenses that we’ve been going through, which is why we’re now at the Kitchen Renovation bullet.  If we still had a mortgage, I don’t think we’d be there.

Has your life changed after finishing a big regular expense like daycare, a mortgage, or a car payment?


20 Responses to “Two years without a mortgage”

  1. Jenny F. Scientist Says:

    This summer our car payment will vanish! … we will probably just invest it all instead. (It’s a 0% interest loan which is why we didn’t pay it off early; that and the mortgage are our only debt.) Next summer (i.e. 2020) the daycare payment will also vanish! (Same.) The mortgage is owned by Spouse’s employer at such a low rate our investments always earn more, so we don’t really plan to pay it off early.

    Me having a higher % of a full time job impacted our spending the same way – we go out for dinner once or twice a month rather than once or twice a year. Once in a while I get takeout for lunch. I got a new runner rug solely because the laundry room flooded, and I didn’t bother to sterilize the old one (to be fair, a tatty old piece of carpet scrap).

  2. nicoleandmaggie Says:

    From indivisible:
    Call your senators with this brief message: “Keep the government open with no new wall money!”

    Monday, Feb. 11 is critical. The absolute latest the full text of any proposal can be released publicly is Monday (in order to comply with the House 72-hour rule). So make those calls on Monday!

    Info on how to contact your senators:

  3. chacha1 Says:

    I would like to say it has, but every time I get clear of some kind of obligation, an employer closes my department or eliminates my job and I’m back at square f***ing one.

  4. Leigh Says:

    My husband didn’t pay me rent (but he did pay for all of the groceries, utilities, and a bunch of other line items) before we got married. He’d previously been paying quite a bit in rent (more than I was paying in mortgage, property taxes, and HOA dues) so that allowed him to increase his auto-invest. I felt so much relief when he took over the mortgage payment the first year we were married. The second year, we actually combined cash flow and the ARM adjusted which reduced our payment by 40% but then we refinanced down to 10 years so it went up about 10% from the original payment, so that didn’t see much change. I was really looking forward to that going away (we’re at about $100,000 left now, which feels small for our income and area), but we are moving this year so that will get bigger again. I hear you on the property taxes – our condo fees, property taxes and insurance now add up to the mortgage payment…

  5. Revanche @ A Gai Shan Life Says:

    We’re months out from finishing daycare payments and decades out from finishing mortgage payments. The closest thing I can think of were my car payments, but that was finished off in 2007, so it’s way too long ago to remember what changed from that, other than just funneling more money into debt repayment and savings.

    If we finish daycare payments in a year or so, and nothing else has changed substantially (ha ha ha ha), I plan for that money to all go into our taxable investments.

  6. Miser Mom Says:

    It’s funny, because I remember the day we paid off our mortgage; my husband and I did a 20-mile run together to “celebrate”. (We were actually scheduled to do that run anyway, because we were training for a marathon, but we decided to declare the run was the mortgage-payoff-celebration run).

    But I don’t remember much changing after that in terms of either spending or available money. And so much else was changing at the time . . . kids moving out, kids moving back in. I guess the big thing was that I really wanted my husband to be able to retire, and now he’s retired, so the no-mortgage-payment thing really helped with that.

    That, and now I don’t have some big financial thing to look forward to: no more mortgage-payoff-celebrations in our future!

  7. gasstationwithoutpumps Says:

    I can’t remember when we paid off the mortgage. I think it may have been about the time our son was born, so mortgage payments got replaced by day care payments (I was 41 when he was born, so we were not young parents).

    We started eating out on a weekly basis about the time our son went to college and we were no longer adding to the 529 plan. The 529 plan turned out to be overfunded, as he went to a public college. He’s finishing his MS this March, and we still have about 4-5 years of college expenses in the account. If he ever has kids, we’ll probably change the beneficiary.

  8. sarah Says:

    Almost four years ago two things happened to increase our cash flow: my child stopped attending an expensive private preschool and I received a rather substantial raise. However, we also started maxing out our retirement accounts, refinanced from a 30 to 15-year loan, our property taxes and insurance significantly increased (to almost double our mortgage), and my child started an expensive extracurricular. Overall, it all balances out and my life does not feel too different, though I suppose we are much more stable.

  9. Leah Says:

    We are half done with daycare. We are just putting more money into retirement right now (nowhere close to maxing out but doing quite well, I think!). When we are definitely done with daycare, I think we’ll just be putting more into savings to buy a house.

    I suppose we don’t have living expenses, so we do shovel a lot into savings for a someday house.

  10. Caroline at Costa Rica FIRE Says:

    We have our youngest going off to college this fall so we’ll have another big expense coming up. But your question about big expenses took me right back to when our kids were young and in daycare, which was an annual five-figure expense here in NYC. I certainly don’t miss those days. Not having that expense enabled me to take more chances with my career — I left corporate to start my own business now 11 years old — and once our oldest went to college and we had a smaller household, my husband also left his corporate job for our second small business. So these big expenses do add up and cause psychic constraints. I’m glad we’re almost through with the big child-related expenses — 4 more years!

  11. First Gen American Says:

    I still always feel like I have no money which is a lie. It just seems like there is a long list of goals that are right behind the last one we finished. Mortgages and daycare is behind us but now we are doubling down on college savings

    I guess the biggest thing I love is that debt freedom allowed us to make and implement an elder care plan before we needed one in a crisis mode situation. It also gave us freedom to walk away from our jobs if they got really bad and just the knowledge that we can makes work life so much more enjoyable. I focused more on making the job fun for me instead of doing things for the sake of job security (like saying yes to jobs I didn’t want). It made me more productive and I really like my work now.

    Theoretically, we could’ve skipped the whole “starter house” phase like many do but our jobs weren’t as secure back then. All I’m all, I’m happy with how everything turned out 20+ years later.

  12. Julia Says:

    Hi, your blog is a gold mine of fascinating material, thanks for your continued efforts and thoughts in this space.

    In hindsight would you have done anything differently re paying off mortgage early? I think if we pay off our mortgage early it might lead to less financial aid being available for college, but perhaps I’m mistaken.

    Right now we have a few thousand and we are deciding between investing it vs putting it towards mortgage (our only debt). We already max out retirement accts. Have you written out your thought process on this?

    • nicoleandmaggie Says:

      In retrospect we would have filled up all of our retirement options first even though they weren’t spectacular and I would have looked into backdoor IRA roths earlier. Because retirement funds are a way to hide savings from colleges and if you don’t use that space, you lose it each year. But if our retirement options had been truly maxed out, I don’t think I’d have regretted paying down the mortgage before putting money into taxable stocks.

      If you hit the mortgage tag or maybe the house tag you can see our mortgage thought-processes in real time. For a long time the first of every month was musings about house and mortgage stuff.

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