Paying off a mortgage in just five years sounds like heaven to many people, although it also sounds unachievable to most. But by making a few changes to your financial setup, you could be able to pay off your mortgage sooner than you might think. Here are three tips for going mortgage-free within five years.
Set Up A Dedicated Savings Account
Having a dedicated savings account just for money that you save towards paying off your mortgage will make it easier for you to save and will also enable you to easily keep track of exactly how much you are saving. By siphoning some of your spare money every month from your main account into a dedicated savings account, you can build up an appreciable fund towards your mortgage repayment in less time than you might think.
Try to work out exactly how much money you need in order to cover your essential payments such as rent and food every month. You can then easily establish exactly how much money you have leftover, and how much of that you can afford to set aside as savings. You don’t want to put literally every spare penny into your savings account; save some money for yourself. However, the more you are able to add to the pot, the quicker you will be able to pay off your mortgage.
Start Cutting Costs At Home
The more you can do to reduce your day-to-day expenditures, the quicker you will be able to save up the money to pay off your mortgage. However you go about it, it is going to take some time to gather enough funds to clear the debt entirely, but every little will help in this regard.
There are plenty of apps out there today that will make it easy for you to track exactly what you are spending your money on. Keeping a close eye on your spending makes it much easier to save money and ensure that you are always aware of how you are spending your money and how much you have left. Consider switching from branded products to generics, reducing your energy bills, and switching energy suppliers if necessary. Every penny reducing your energy bills and switching energy suppliers is necessary. Every cent you are able to save is more money that you are able to put towards your mortgage.
Consider Downsizing
In some cases, the best way of transitioning to a mortgage-free existence is to sell your existing home and swap it for something smaller. If you don’t need a big house anymore, perhaps your kids have all left home by now and grown-up, leaving you with unused rooms, trading in for a smaller property might make it easier to pay off the associated mortgage.
With the profits from selling your home, you might be able to pay for your next home outright, or you might be able to take out a much smaller mortgage than you would otherwise be forced to. If downsizing is something that you are in a position to consider, then you should seriously consider it.
More Tips
If you would like to find out more, IRA Investing has a fantastic in-depth article about paying off your mortgage in just five years. Check out their website for more information.
If you are determined and willing to make a few sacrifices, paying off your mortgage within the next five years might be a more realistic proposition than you initially think. It won’t be easy, but if you are prepared to make the necessary changes then it is possible.