Mortgage and automobile debt
For many people that are trying to homestead the one problem that many people have is debt. Two of the largest debt’s that families have hanging over their heads are mortgage debt and automobile financing. Today let’s take a look at ways to help pay off your mortgage and get this number one debt off your back. In future post we will talk about ways to pay off your auto loans and work on ways to be debt free.
Tip number one
Automate an extra payment to your principle along with your regular monthly mortgage payment. What I mean by this is when making your regular monthly mortgage payment add an extra $25 a month towards your mortgage principle. The reason I pick $25 a month is this is a nice low dollar amount that I am sure most people can find just by cutting back a few bad habits. If you set this up to automatically come out of your account and go straight to your principle you more than likely will not even notice the money being gone. After you are comfortable with $25 dollars a month then step out and increase it to $50 dollars a month. You will not believe how many years you will cut off your mortgage by paying the principle down monthly with just a few added dollars.
Tip number two
Many Americans are paid on a bi-weekly paycheck principle. If you were to set-up your mortgage payment to be paid bi-weekly instead of monthly. By paying half of your monthly mortgage payment ever two weeks you will shave off many years off the term of your mortgage. The reason for this is when you pay bi-weekly you will be making an additional monthly mortgage payment which will go directly towards your principle thus reducing the loan amount of the mortgage and saving you years of mortgage payments.
Tip number three
The whole idea of paying off your mortgage early is by cutting years off of the term of your loan and the easiest way to do this is reduce the principle. What my family and I have done is to deposit large chunks of money periodically towards the principle. Some ways that we have come up with these deposits is by thinking outside the box. A couple ways that we came up with the extra money to put towards the principle was to have a garage sale twice a year. Instead of taking the profits from the sale we took the money and put it towards the principle on the mortgage. Another suggestion that we did was to take our tax return and put this towards the principle. Whatever way you can find to take extra money and apply it towards the principle, do it! You will save thousands of dollars in interest by lowering the principle of your mortgage.
Tip number four
Most people have no clue about tip number four. I love tip number four since we use credit cards that offers points for all our purchases. Disclaimer – we pay off the credit card at the end of the month so we do not add up debt.
Many people like us use our credit cards to pay for everything in order earn points for vacations or other frilly things. But there are some cards that you can have the points convert automatically to mortgage interest payments. So every time use this type of credit card you earn points which automatically get converted over to paying down your mortgage principle. This is a great tool that takes the guess work out of paying off your mortgage early.
Tip number five
Pretty much everybody can think of a way to adjust your lifestyle in order to save money to put towards your mortgage principle but tip number five is near and dear to my heart which is starting a side income. Making money on the side either by having a hobby or offering a service for people that you can do in your spare time is very rewarding and there is no limit how much money you can earn. There are many ways to earn extra income without taking on a second job that you may hate and regret. Just keep your eye on the goal and that is to pay off your mortgage and get out of debt in order to free up your income in order to be a happy homesteader.
Here are some resources for guidance on earning extra income
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