The Personal Finance Podcast - The AMAZING POWER of Paying Off Your Mortgage with Andy Hill

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Starting point is 00:00:56 Find your advisor at IG Private Wealth.com. On this episode of the Personal Finance Podcast, we're going to talk to Andy Hill about how to pay off your mortgage. What's up, everybody, and welcome to the Personal Finance Podcast. I'm your host, Andrew founder of Master Money.com. And today on the Personal Finance Podcast, we're going to be talking to Andy Hill about how he paid off his mortgage. If you have any questions, hit me up on Instagram at Master Money Co. and follow us on Spotify, Apple Podcasts, or whatever podcast player, you love listening to this podcast. And if you want to help out the show, leave a five-star rating and review on Apple Podcasts.

Starting point is 00:01:58 And don't forget to check us out on YouTube as well. We are Master Money on YouTube. Now, today, we're going to be talking to Andy Hill from Marriage, Kids, and Money on exactly how he paid off his mortgage. because he has a very cool path to financial independence, and he created freedom for himself by getting rid of all of his debt. Now, we've had a number of conversations on this podcast about debt and how powerful it is to get rid of your debt, especially if debt stresses you out or if debt gives you anxiety,

Starting point is 00:02:32 and we're going to talk all the way through that with Andy here today. In addition, we're going to talk about the advantages of paying off your mortgage. We're going to talk about how to set up your mortgage if you're interested in paying off your mortgage, should you get a 15-year mortgage, should you get a 30-year mortgage, and should you be paying it biweekly, should you be paying your mortgage monthly,

Starting point is 00:02:52 all of these things to set yourself up for success for paying off your mortgage. And then in addition, we're going to talk about some of the negatives to paying off your mortgage, and we're going to go through and these 10 steps to paying off your mortgage and the 10 things that you should do

Starting point is 00:03:07 if you want to accelerate your path to that mortgage pay down. And you can utilize these to pay down any day. debt whatsoever. And then we're going to talk about some of the things that Andy has been doing since he's paid off his mortgage and how he's investing those dollars and how he's utilizing those dollars towards things that brings him and his family value. And then obviously, lastly, we're going to ask Andy what wealth means to him. So if this is something you're interested in,

Starting point is 00:03:32 if you're interested in paying down debt or if you're interested in getting rid of that mortgage, then make sure you tune into this episode because there's so much valuable information that Andy gives us here today. So without further ado, let's get into it. So Andy, welcome to the personal finance podcast. Thank you so much for having me, Andrea. I appreciate it. So we are so excited to have you here today. And we're going to be talking about Andy's journey to debt freedom. And he has a really cool story about debt freedom. So Andy, tell us a little bit about yourself and marriage kids and money. Yeah, sure. My name is Andy Hill. I am a family finance coach and I love helping families build wealth. and happiness. And it's been a journey that I've been on for about five years. And I absolutely love

Starting point is 00:04:18 this job that I have. So you have an amazing story about your path to financial independence. And debt freedom was a huge part of that. So tell us a little bit about how you got started on this debt freedom journey early on in your life. Yeah. So one day after my wife and I got married, we were having a great time together. We got married maybe like 12 years ago. And so we were enjoying ourselves. We were two late 20-somethings, you know, combined. We were making six figures and spending all of it, having a great time, going out to restaurants, concerts, you know, being young and having fun. It was a lot of fun. And then we learned one day that we were going to be parents. And that sort of changed things for us a little bit. It was something sort of clicked

Starting point is 00:05:02 in my brain. It was like, okay, we're not just living for today anymore. We are in the process of creating a human and they are going to be here very soon. And we are, we are, responsible for them. So for me, since I've sort of enjoyed finances for a while, even though I loved spending a lot of money in my late 20s, something snapped in my brain where I said, okay, well, if I'm going to protect my daughter, if I'm going to do the right thing by her, I want to start paying attention to my money, a lot better. So at that point, even though we were making six figures combined, we had about $50,000 worth of debt. And 30,000 of it was my student loans, 20K was a car loan and it was just one of those things that was sort of nagging on me.

Starting point is 00:05:42 And so I said, okay, well, maybe that could be something that we could do together and we could pay off that debt and then start moving towards a life of complete debt freedom, you know, paying attention to our money better. And I said that to my wife and she's like, that sounds really boring. That sounds like you want us to spend less money and not have as much fun. And I'm like, well, yeah, I guess it does sound like that. And so I sort of walked away, you know, thinking, okay, man, I sort of failed this little plan that I had for us to, you know, get everything combined and start to make some progress. But then I thought, well, maybe I wasn't speaking her language.

Starting point is 00:06:18 Maybe I was speaking my language. I was speaking like numbers and, you know, net worth and debt and all that stuff. And for her, she's more emotional. She's like, what does that mean for me? What am I going to get out of it? And as soon as I started to speak her language and understanding what she would actually want to do with her life, what she's excited about. And for her at the time, she had this job that she really didn't like all that much.

Starting point is 00:06:42 And so for her, I said, well, you know, by taking care of our money, what if you were able to go part-time at this job and that eventually full-time stay at home with our kids. And that's when things sort of lit up for her and said, okay, I'm in. And so that's sort of where we started our financial journey and paying off that debt and then moving forward

Starting point is 00:07:04 to where we are today. Awesome, and when you guys first got Did you have a lot of debt that you had to pay off? Yeah, it was about $50,000 of debt at that time. But partnering together, we were able to knock that debt out in about 12 months. So, again, looking at our income, we had about, I think we were making about $130,000 together. So when we sat down, we got intentional. We started to budget together.

Starting point is 00:07:27 I planned these get-togethers called budget parties because I knew she wasn't excited about showing up for the budget. So I figured if I put the word party in front of it, that might convince her to come hang out. I brought some wine, I bought pizza, and just tried to make it a little bit more fun. So we were looking at the numbers. We were saying, okay, what did we spend last month? What are we planning for this month? And then how does that align with our goals that we've set forth as a couple? Paying off this debt, being able to live on my income alone down the road.

Starting point is 00:07:54 And so those are the get-togethers we did once a month. And again, after about 12 months of partnership, we were able to become consumer debt-free. That's awesome. And that's the same exact thing that my wife and I did at the beginning. where we started to create a budget and things like that. She did not want to go towards that at all. So what I had to do was create more spending accounts for her and create the word parties, the same word I used. So that's fantastic. It's the same exact situation. So you are one of the most respected people in the personal finance space,

Starting point is 00:08:22 and you also made the conscious decision to pay off your mortgage. That's one of the biggest things we want to talk about today. So why did you make that decision instead of making, say, the minimum payments and just investing that money instead? Why did you make the decision to pay off your mortgage in full? Yeah, so it was sort of along that same line of the story that Nicole and I were doing together. After we paid off that mortgage, we got kind of excited about, well, what else can we do now that we're living on half? You know, we're living on just my income alone. What can we do to continue to make progress in our journey so that we have more freedom today and more time and more availability?

Starting point is 00:08:55 And paying off our mortgage became a part of the top of that list. And I'll tell you why, a lot of it was emotional for me. My first home ownership experience was pretty traumatic. I bought a home in 2004 right after college because it was the right thing to do. You got to buy a house right away because that's the smartest thing to do, even though, you know, you really can't afford it. So for me, I put 10% down on my first home and I was very proud of that fact. I quickly learned that homeownership is a lot more expensive than just the mortgage. So I moved in at 22, feeling very proud with my, you know, held held high.

Starting point is 00:09:29 Not a month later, my head was low because I'm realizing, okay, there's utility bills. there are things that need to be repaired all the time. I got to cut this grass. I got to pull these weeds. It's just like it turned into something where it was owning me. I decided to make a job change maybe a year later to have just a better quality of life in my early 20s there. And that came with a pay decrease.

Starting point is 00:09:52 So right at that moment, between those two decisions of buying a home and then decreasing my pay, which I'd not suggest to do, my home expenses were about 50 to 60% of my income. So it was just eaten up. I felt like my home owned me. A few years later, after I learned to start to, you know, bring some roommates in and cut my expenses and things like that,

Starting point is 00:10:13 the great recession came and smacked Metro Detroit in the face, and I was a part of that. And the home that I bought for $200,000 was now valued at $100,000. And I'm like, I am underwater on this thing that I was supposed to do, this smart thing to do, and I just felt trapped in my home. And so the second time around that my wife was looking for what I say, hey, let's buy this next forever home. I had that in the back of my mind. I said, I don't want to be owned by my mortgage or owned by my home ever again.

Starting point is 00:10:45 So she found our forever home in 2013 and said, hey, this is the one. This is the one we want to buy. I said, okay, we'll do it. It was $350,000 versus the $200,000 home I bought originally. So bigger mortgage, bigger responsibility. I said, okay, we can get this. but we're paying it off in five years. I don't want to have this thing hanging over my head forever, needing for me to have a job that maybe I don't really like forever so that I can pay off this house

Starting point is 00:11:13 forever. I don't want forever when it comes to a mortgage in my life. So we agreed. She said, okay, I'll work with you on that plan. We are making good money at that point together. And that was our plan. So we decided to pay off our mortgage in five years, again with that same collaboration, that same process of meeting together for those budget parties, looking at our income and our expenses, and seeing how those goals aligned going forward. And we were able to pay off in less than four years with that plan. And now we are completely debt-free, completely mortgage-free. That is absolutely fantastic. One of the major things that we talk about in this podcast is money psychology and using your money as a tool to reduce your stress and your anxiety, which can become

Starting point is 00:11:56 a major contributor for a lot of people when they're talking about their money. And I think for a lot of people, debt just stresses them out. You've talked to a number of people who have paid off your mortgage on your show, and you've also obviously paid off your mortgage as well. So have you seen that reduce your stress in your life? And how have you seen that reduced stress in other people's lives as well that you've talked to on your show? Oh, absolutely. The day that we became mortgage-free in our house, I can't tell you the amount of stress that just came off of my shoulders. At that time, I was the sole breadwinner in the house with two tiny kids. And so there was a pressure on my shoulders before the mortgage payoff of like, man, if I lose my job, we have this big house with

Starting point is 00:12:35 this mortgage. This pressure is just overwhelming. And so when we paid it off, it was like a weight just dropped off my shoulders. And the feeling was just freedom. It was hands in the air, freedom. And I just was happy to walk on my grass with my shoes off and just like, this is my grass. This is my home. This is our home. It just felt fantastic. So yes, the emotional benefit of that was so nice, but then the practical benefit was even better. At that point, we were now paying, I'm gonna think probably $20,000 less

Starting point is 00:13:09 towards a payment that we didn't have to make anymore. What can we do with 20 more $1,000 in our life? And it might not be $20,000 for the person listening, maybe it's $10,000, whatever. What would you do with $10,000 in your life if you didn't have to make that payment anymore? And that was what we were stuck with at that point, with that decision of, okay,

Starting point is 00:13:28 Do we want to go on more vacations as a family? Do we want to decrease the amount of time we're working and increase the amount of time we're having fun? These were real decisions that we could make as a family at that point. And yes, to your point, the folks that I've interviewed on my show that have also paid off their mortgage, they can make important life decisions, lifestyle design choices after paying off their mortgage.

Starting point is 00:13:50 That might be, hey, I want to decide to stay at home with my kids a little bit more. Or, hey, I've got an elderly parent that really needs me right now and now I have more time because I don't have as much cost in my life that I need to go about work. Or, hey, we're stressed with work, man. Let's go on more vacations. These are all lifestyle design choices that you can make now, not 20 or 30 years from now. They're what you can make now. So while I love investing and I love the feeling of becoming completely debt-free,

Starting point is 00:14:21 I think there's a conversation that needs to happen about and with both of these. Why can't we invest and pay off our mortgage? Just because we paid off our mortgage, it doesn't mean we didn't invest as well. I am all about both of these because there are benefits to both. Absolutely. And I think the and is the biggest thing in this equation. Because a lot of people go into paying off debt and they think, oh, I got through every single extra dollar at this debt. But if you do both at the same time, actually mathematically you come out ahead, A, but B, it just is so much better psychologically in the long run. It's fantastic for any individual to do that.

Starting point is 00:14:51 You were talking about some of the ways that you spend, some of the additional income that you have now. What are some of your favorite ways that you spend that money now? Oh, man. Well, I mean, the year that we paid off our mortgage, the first full year we paid off, we went on more family vacations than we ever had before as a family. And yes, we're a young family. At that point, we had, let's see, Zoe was six, and Calvin was three. So we had a six-year-old and a three-year-old.

Starting point is 00:15:14 Yeah, we didn't go on a ton when they were babies. But at this point, they're old enough to start traveling to all-inclusive vacations in Mexico, going to Disney World together, traveling in northern Michigan. We live in Michigan. So we love going up north in Michigan to visit family and just enjoy all that Michigan has to offer. So we went on more vacations that year than any other year before. And we loved it. We loved the freedom of being able to pay for our vacation and not worry about, hey, do we have enough money for that?

Starting point is 00:15:40 Or are we going to be worrying about that on the credit card bill 12 months from now? No, we had the money and we were excited about it. And we utilized a lot of it. And then again, yeah, I started to make some plans for my future going forward. Well, now that Nicole's a stay-at-home mom right now, and eventually she wants to go back to work, maybe doing part-time work. What if Nicole and I could both do part-time work since we're mortgage-free and we've got a lot invested for our future and time and compound interests are going to take care of us in retirement? Those were some of the conversations that started really getting exciting for us. So, yeah, more vacations and less work.

Starting point is 00:16:16 I guess that's what I'm getting that, Andrew. I absolutely love that. And that's the lifestyle everybody's looking for. So I think that is one of the coolest things. And if somebody wants more of these vacations, they want to increase their income so they can invest more dollars later on when they pay off their mortgage. One big thing to consider is I guess to set up their mortgage for success when they go about doing this. So lately, I've been noticing how fast things are changing at home. The kids are growing like crazy.

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Starting point is 00:18:39 Indeed is all you need. So if someone wanted to pay off their mortgage as fast as possible, Would you recommend them setting up on a 15-year mortgage or a 30-year mortgage? Is it just based on the individual? I think if your goal is to pay off your mortgage as soon as possible, a 15-year mortgage is the best way to go. If you are not bothered by debt and you see the benefit of having debt in your life as a sort of inflation hedge or whatever, then yeah, 30-year mortgage is the way to go. But if your plan is, hey, I want to get rid of this thing as fast as possible, the 15-year mortgage is the best way to go because... you can get a lower interest rate. Your term is shorter.

Starting point is 00:19:18 It's 15 years shorter. So you are making more payments towards the principal every month. And yes, with that comes a little bit of discipline. So you have to be ready for those payments each month, which means it's a higher payment. But we wanted that discipline. We wanted to be like, hey, this thing's going away, no matter what. Whether we don't make any additional principal payments,

Starting point is 00:19:40 it's going to be gone in 15 years. Now, if we do make additional principal payments, payments, it's going to be gone a lot quicker than that. So we wanted the discipline of a 15-year so yes, if you are looking for mortgage freedom faster, a 15-year mortgage is the way to go, 15-year fixed, if it doesn't bother you, and I know I talk to a lot of people who are like, no, I don't mind having a 3% mortgage at 30 years, Andy. That's totally fine. Do that. That's okay. It all depends on your goals and your situation. That's why personal finance is personal. So there's no right or wrong answer here. For us, 15-year mortgage, and if you want to pay off your mortgage

Starting point is 00:20:12 the fastest way, get a shorter term, and that's a 15-year mortgage. Awesome. And along those same lines, do you prefer bi-weekly payments or monthly payments, or does it not matter to you? Well, mathematically, it makes a lot of sense to do bi-weekly if you can. That depends on the mortgage lender that you work with, though. Some don't have that program set up, and if it's a big hubbub with them, then just keep going monthly and then just make extra principal payments. But if you do have the ability to go bi-weekly with your lender, suggest that because essentially that helps you to make one extra mortgage payment per year because you're paying 26 times throughout the year and then that adds up to essentially a 13th

Starting point is 00:20:53 payment by the end of the year. So if that works for your situation, it works for your lender, go biweekly because that pays more interest faster. But there's nothing wrong with going monthly, especially if your lender doesn't allow for it. But just keep throwing extra principal payments at it. What we did, I got paid 26 times. a year, so I got paid bi-weekly. But we just pretended that I get paid 24 times. So when we got those two extra paychecks, I would just throw the entire thing at the mortgage principle. It was like, hey, those paychecks aren't coming. They're not real. And so when they did come, it would just be like, boom, $4,000 would hit the principal or whatever it was at that time.

Starting point is 00:21:31 And that really made a big dent. Outside of those big dents from those extra checks, we would sell stuff around the house that we didn't use anymore. I started to sign. hustle a little bit with the content creation online. My wife did some professional organizing as a side hustle. We would take that money and throw it at the mortgage and it would go pretty fast. Yeah, and it was gone in less than four years. It was amazing. I absolutely love those little money hacks where you can kind of trick your mind into making extra payments. Those are some of the coolest ways to pay down debt as fast as possible. So you have an awesome YouTube video about the advantages of paying off your mortgage. What are some of the biggest advantages in your mind to

Starting point is 00:22:10 paying off your mortgage. Oh yeah. I mean, I would say a lot of it, you know, when you get into that debate of like pay off your mortgage or invest or whatever, a lot of people say, well, you know, you can make a lot more money investing. And you know what? I would agree. You can.

Starting point is 00:22:24 Over time, if you have that discipline, you stay in the market, you have the ability to make more money. Now, emotionally, what is more exciting for you? What is more beneficial for you? What is better for your mental health? I really love the benefits that come with paying off your money. your mortgage and yeah to your point is a reason that that's like my most popular YouTube videos because I think people see that, see that debate and are like, well, what's the right

Starting point is 00:22:48 thing? The right thing is all personal. It's you decide. But if you're looking for some of those benefits of, you know, reduced stress because you have more options in your life, paying off your mortgage early could definitely help with that. If you have a situation where you're like, oh man, I need to step away from work for a little bit because my kids are at home because of COVID and I can't give my attention to my job and my kids. Maybe I can go part time for a little bit. Good thing I don't have a mortgage payment anymore. Like, you know, some of these things that are like, wow,

Starting point is 00:23:21 I have the option to make this choice for my family right now. I have the option to go take care of my elderly mother who needs me more right now because I don't need as much income. It's reducing the amount of requirement for you to make more money. And there's nothing wrong with making more money. If you have the ability, the time, and the skills, make money because that's the best way you can hit all of your financial goals. Do that. But if you want some more flexibility, then, yes, reducing the amount of debt you have in your life,

Starting point is 00:23:52 especially the largest line item that will ever be on your budget, reducing your paying off your mortgage will definitely help you have some more options. So honestly, most of them are lifestyle design benefits. And I found that even if you're planning for retirement, if you don't have a mortgage in your life anymore, you're going to need a lot less for retirement. So your plans, when you said, hey, I need $100,000 a year to be happy or my comfortable, well, now that you don't have a mortgage anymore, is that now $80,000? Okay, that means you have to invest a lot less now. So there's tons of benefits. I would say the highest benefit that's associated with paying

Starting point is 00:24:28 off your mortgage is just your ability to design your lifestyle today as opposed to waiting 20, 30 years to make that lifestyle change. I love that. It just creates freedom. It creates freedom. It creates flexibility in your life. And that's what money is there to do. It's a tool to create freedom for your life. And that's one of the most amazing benefits for sure. Now, as you started to pay off your mortgage and you started to really aggressively pay that down, were there any disadvantages that you found along the way? Yeah, you know, I would say two things. I would say, you know, that the counter argument to paying off your mortgage is investing in the stock market. And I would agree with that. The amount of money you could make in the stock market versus paying,

Starting point is 00:25:07 let's say a 3% mortgage like we had. The amount of money you could have made versus investing in the stock market, it's quite sizable. I think I did a little analysis during the time frame that we paid off our mortgage. We probably lost out on maybe $30,000 that we could have made in the stock market. And yeah, that seems like a lot of money. But honestly, would I pay $30,000 for the peace of mind that I have with a paid off home? Yes, I would. Yes. I would. would, I would. So yes, you would make a lot less money, depending on what happens with the market. Obviously, we're in a kind of a down market at the beginning of this year right now as you and I are talking. So the market can do anything, but really over the long term, if you're investing in,

Starting point is 00:25:51 you know, broad-based index funds or just something that covers the broad market, yes, you can expect a better return investing in the stock market than you can paying off your mortgage. And then the second thing that I found is sort of a disadvantage is just general less liquidity. So for our situation, we bought a $350,000 house, right? And then it was paid off. So now at that point, a paid off home that's valued at $350,000, that's fantastic, but it's an asset we can't really touch. If you want access to the money for whatever reason, then that's probably a disadvantage.

Starting point is 00:26:27 Now the appreciation of the market, since we bought the home, it's now valued at $550,000. So now we have $550,000 asset that we can't really touch. and I guess you could think about that as a disadvantage for us right now. We don't need to touch it. We're good. We've been investing for our retirement. We've been investing for an early retirement. And now we see this home as just yet another thing that we can tap into in our, call it our 70s, our mid-70s,

Starting point is 00:26:53 that, hey, if we want to downsize and sell this thing for, which would potentially be around $2 million by the time we're in our mid-70s just based on real estate appreciation, we could downsize our $2 million. home to a half a million dollar home and then we got a million and a half to whatever whatever we want to do with that we want to travel more we want to do whatever we want we want to give back to our family we see it as a way that's something that we can touch later out on the road so those would be two disadvantages to consider you could make a lot more money in the stock market and you got a lot less liquidity as well so those are some disadvantages i found exactly but creating that flexibility and just figuring out what is that free to mean to you how much is that worth you and if it's worth it to do the math and you check it out and say, hey, if it's $30,000,

Starting point is 00:27:37 is that freedom worth it for you? I think any freedom would be worth it for me for $30,000. So that's just something to consider for everybody listening as well. And you have a really cool system. If somebody wants to go do this, if they want to go pay off their mortgage, you're listening to you, they want that freedom, they want to be able to have that flexibility. You have a 10-step system to paying off your mortgage. And I'll go through each of these with you, but I wanted you to just kind of expand on some of these. So your first one is to make a goal. So how do you start to set up goals when you're paying off your mortgage. Yeah, I am a gold junkie, Andrew. I love starting off my year, starting off my month, starting off my day, really, with the reason I'm stepping

Starting point is 00:28:13 into the year, stepping into the day. Why am I doing this? What are my goals? And so for me, I like to make smart goals. And smart goals are specific, measurable, achievable, relevant, and time-based. So for me, let's say my goal is to pay off my $200,000 mortgage in five years. That was my goal, right? So I want to be specific around that. I want to say, instead of saying, I want to have some more financial freedom in my life, it's like, no, no, no, I want to be mortgage-free in five years. That's very specific.

Starting point is 00:28:43 And it's measurable because we put a number around it. It's $200,000, right? So that's a measurable goal, and we say it's done in five years. Is it achievable? That's a really important thing to think about. even though you're saying it's measurable and specific, can you actually do it? So you want to make sure that you're able to do it. And then is it relevant? Does this fit with your overall financial goals? Is this something that you want to do in your life? And then time-based, we said five years, so we're getting it done. So making a goal and getting it done. I love creating goals and I love seeing them through because I'm all about action. If we want to do things in our lives, we've got to set out a goal and get it done. Absolutely. That's fantastic. I use smart goals as well. That's one of the ways that we kind of go through. we talk about making our financial goals on this podcast. So that's right in line with what we do

Starting point is 00:29:27 here to, which is awesome. And then your second one is to use a mortgage payoff calculator. Now, you have your own on your website, don't you? Yes, yeah, I do. I work to create one just because I was playing around with them so much on the internet that I'm like, well, I should have my own. That's specifically about paying off your mortgage because I'm an advocate for it, I guess. That's awesome. So we'll link that up in the show notes as well. So anybody who wants to look at paying off their mortgage and playing with a mortgage payoff calculator, you can check this out and you can see exactly how long it's going to take you to pay off your mortgage based on your current situation.

Starting point is 00:29:59 Yeah. And the fun thing about that is just, oh, yeah, go ahead. No, go ahead. I was just going to go to the third one to go ahead. Yeah, I was just going to say, the fun thing about that is that it helps you make that goal relevant and achievable too. By playing around with that calculator, you're saying, okay, well, maybe I can't do it in five years, but I sure could do it in 10.

Starting point is 00:30:18 And so based on doing that, you're making your goal real for you, based on your income and your situation as opposed to just thrown pie in the sky numbers out there. Exactly. They go hand in hand, which is fantastic. So your third one is to reduce your expenses. So what are some of your favorite ways to reduce expenses? I know we talked about a couple of them. But what are some of your favorite ways to reduce expenses, especially if you're going

Starting point is 00:30:39 to go pay off your mortgage? Yeah, I would say if you are in a relationship or I guess just even personally, the last thing that I want to do is take away expenses that really make me happy, right? So what else can I work on that I'm like, okay, I don't really care about that that much. I would definitely spend less money on that. That's where I like to start. So that could be with like recurring bills. You think like the cable bill, like the cell phone bill, insurance bills, things where you can maybe negotiate your rates.

Starting point is 00:31:06 I found that negotiating my insurance rates like every couple of years saved me like $1,500 or $1,500 a year. It's kind of insane. I think it's just they just gradually increase your payments. And then they have these discounts for new customers. So when you go, hey, I'm going to switch from whatever, State Farm to Geico, I'm going to save like $1,500. But then you got to do that every couple of years because they just jack up the rates, no matter where you go. But I think they're betting on people not doing the negotiation. So looking at, you know, negotiating your recurring bills, maybe looking for an MV&O cell phone plan.

Starting point is 00:31:40 We changed from Verizon to Telo recently, and we save, I think we pay, when do we pay $30 a month right now for our phone plans? And it is the same coverage. and I have actually better coverage where I am right now. That's part of the reason I switch, but it's like half the price. So looking at ways like that, it's like, okay, it's not really going to affect my joy, but I'm saving a lot of money. Maybe looking at a lower cost grocery store. We went from Kroger to Aldi, and we saved about 300 bucks a month there,

Starting point is 00:32:07 and we actually really enjoy how compact the store is and how it allows us to get through it and still get great quality of food. So things like that I would focus on first. Exactly. It's looking at spending money on things that bring you value and then cutting out everything else that doesn't bring you value, just trimming the fat there so you don't spend money on things that you don't care about, basically. Exactly.

Starting point is 00:32:27 That's the huge thing. So your next one is increasing your income. The greatest catapult to building wealth is increasing your income is what we talk about all the time here. So what are some ways that you like to talk about when talking about increasing your income? Yeah, I love that. And, you know, creating your own business or side hustling, those are all fantastic. I would say start with the place where you're already making money, whether that is a current client of yours, if you have a small business,

Starting point is 00:32:50 or at your current employer. If your current employer is paying you, whatever, call it $80,000 a year to do whatever job you're doing, when was the last time you got a raise? When was the last time you asked for a salary bump? And are you exceeding expectations at your current position? That is the best place to make more money, where you're already making money, whether that's at your job or with current clients, because it's a lot easier for them to give you more money because you've already been producing results for them. You can also talk to your spouse about asking, for a raise, you know, that's something that maybe doesn't happen as much as it should. We can have conversations and help that along. You can work overtime. I talk with this guy, Keith Robinson, who worked as a police officer. And it was during a time when there were people, you know, looking for people to do a little overtime. And he raised his hand because he was in the process of paying off his mortgage.

Starting point is 00:33:41 And he said, hey, I'll take on some overtime. And so with his overtime dollars, he was able to pay off his mortgage a lot earlier than normal. So working some overtime. And then again, you could start a side hustle. You've got a little, you may be a hobby or a passion you want to do on the side, make a little bit extra money, take all that extra money and throw it at the mortgage. Those are awesome tips. And that's exactly what we talk about here as well.

Starting point is 00:34:01 Start at your job. See if you can increase your income at your job and then move on to some side hustles as well. That's some of the best ways to do it. It's the easiest way to do it as well. Just start at your job. See if you can increase that income there. Amazon Presents, Jeff versus Taco Truck Salsa. Whether it's Verde, Roja, or the orange one.

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Starting point is 00:34:59 So your next one is to live on a budget. So when you talk about budgeting, we talk about two of them here. We talk about the reverse budget, which is just save off the top and then spend what's left over. And then we talk about using a spreadsheet or line by line item budget. What's your favorite way to budget between those two? Honestly, my wife and I have been using Mint for about 10 years, and it's just one of those steady-eddy things that we just like. It makes it easy.

Starting point is 00:35:20 And the reason I like a budget in general is that it just sort of creates a plan for your money. Just like a calendar or a schedule defines your time. A budget defines how you are spending your money and in accordance with your values. So if you said, hey, as a part of our family goal, we're paying off this mortgage, then you need to align your budget to make that happen. So you're setting an intention with your budget and your money to say, this is what I want you to do money, and then it goes and does it. And that's what a budget can do for you. So I like Mint. It's made it easy. It's a free tool, but there are dozens of other

Starting point is 00:35:54 tools that can help people along. But yeah, having just some intention, whether it's on a piece of paper or a spreadsheet or a reverse mortgage or a backwards mortgage or an upside down mortgage, just having some intentionality with what you're doing with the money, I think can go miles in this process. Absolutely. And I always talk about how your budget is telling your money where to go instead of wondering where it went. That's basically the bottom line of it. So you can put your dollars towards that extra mortgage payment. Absolutely. Yeah. So your next one is to set up recurring extra mortgage principal payment. So talk a little bit about that. Yeah. So obviously, you know, we say, hey, we're going to pay off the mortgage. I think adding some automation into the process

Starting point is 00:36:31 makes it a lot easier. Just like you're automating your 401k contributions or your IRA contributions, automating your principal payments is a great move as well. So if you have, hey, we've set aside, call it $500 extra to put towards the principal, can you do some automation with your provider right now to say every month, I'm going to hit another $500. Or if it's not possible because some of these mortgage companies, I don't know, maybe they're not intentionally not wanting you to pay off their mortgage, but they're sure is the heck not making it easy.

Starting point is 00:37:02 Just setting a calendar reminder for yourself to say, on this date, go into the online system and pay another 500 bucks. So you have some automation that way. As long as you're doing this in a regular fashion, so you're not forgetting, because it's an easy thing to forget, right? It's another $500 out of your life or $1,000 out of your life. But if you think about the reason you're doing it and maybe, I don't know, having a little mood board or something like that that's saying,

Starting point is 00:37:27 what am I going to do, but I don't have a mortgage? I can look at this beautiful vacation we're going to go on, having that reason to go in and make that payment on an automated basis. can be a smart way to get this thing done. I love that as well. And that's just a fantastic way to keep you motivated as well as to have some of those additional motivators in place. So your next one is to use newfound money

Starting point is 00:37:47 to make big payments. So what are some examples of newfound money you can utilize to make those extra payments? Yeah, you know, when this happened. So this is outside of, you know, getting the salary increase or, you know, doing side hustle. This is like, I got a tax refund,

Starting point is 00:38:01 or I got a bonus or a sales commission or inheritance, I mean, that would be fantastic, or just family gifts, anything that comes your way that's money that you did not expect, if you have a principal sole mission of getting this mortgage paid off, take any extra money that comes into your life

Starting point is 00:38:19 and you throw it at the principal. And that's what we did. So I would get a bonus every once in a while, maybe a couple grand or something like that. It would be like, sweet, okay, we are on a sole focus mission to pay this mortgage off right now. That's where the extra money's going.

Starting point is 00:38:33 Boom. And it would go right at them, mortgage and it made a big difference. Again, we went from 15-year mortgage to a less than four-year mortgage this way. That's fantastic. That's fantastic. And the next one, we've talked about it a little bit here before we're talking about planning parties and things like that, but it's meet each month to review your progress. So are there any things that you do when you meet each month? Do you have like an agenda or anything or you just kind of make it fun and make that meeting something that's enjoyable for both of you? You know, in the beginning, I got a little bit too money specific and, you know,

Starting point is 00:39:02 budget specific. We've transitioned this monthly meeting now to just sort of a husband and wife conversation. What's going on this month? Whose birthday parties coming up? You know, what are we doing this weekend? Do we have enough money set aside for that thing? It's more like lifestyle planning than it is, you know, hard number crunching Excel looking. So I would say having some relaxed nature about it, having it be fun, and then also not making it a marathon session, especially if you have a spouse that doesn't really care about the numbers as much, make sure you're paying attention to their facial expressions. If you're losing them, then keep it brief.

Starting point is 00:39:41 And then maybe you do a little bit of heavy lifting on your side as the call it the household CFO or whatever. Whoever wants to own the numbers a little bit more. Make it fun, make it easy, make the process enjoyable for both of you. Now, one of the things I love about this along the same lines is you have some ideas of how to include the kids in this process as well. I know you had an example of the McCoy family that you had on the show where they had coloring sheets where they would color in some of the blocks to show the house and how far along you're going with the mortgage payments. Are there any other things that you have there?

Starting point is 00:40:11 I would say, you know, I loved their story. It was so fun to share it. They talked about paying off their $250,000 mortgage and they included their kids in the process. Yeah, they had these coloring sheets. They could color them in together. The cool thing about their story and just involving your children in general is that they're watching you. When you're a parent, your kids are watching you. you all the time. So if you are proud of putting them first, putting your family first, by paying

Starting point is 00:40:37 off your mortgage so you have more time in your life to be a present parent, to be an intentional person that says, I'm going to do something and get it done, your kids are watching you. And what is that going to do to those kids in the future? They're going to be people that put family first. They're going to be people that when they say something, they do it. That is powerful as a parent. It truly is. And that's, I think, is one of the coolest ways to pass on generational wealth, is passing on the knowledge as well and getting them involved as early as possible. And this is an amazing way to do it, is to bring them in through this process and they can see along with your progress and you guys can celebrate together, which leads us to your last one,

Starting point is 00:41:18 which is to celebrate and plan your new life. So talk about that a little bit. And then tell us about some of your future plans that you guys have now that you're mortgage free. Yeah, thank you. Well, yeah. So step 10 here is to celebrate and plan. So, I think celebrating is so important because you know what these moments paying off your mortgage paying off your student loans whatever they're fleeting right it's like you push the button and then you're on to the next thing but no take this time to celebrate you've just done something insane like go crazy pop some champagne go on a vacation celebrate with a nice dinner do a mortgage burning party with some friends one thing that my wife developed she took all the mortgage papers

Starting point is 00:41:59 and she created a mortgage pinata out of it. It was insane. So it was all the mortgage papers, this paper mache ball, we put coins and candy and stuff, we hung it from a string, and our kids beat it up like a pinata, and they destroyed the mortgage.

Starting point is 00:42:13 It was so fun. So just taking these times to celebrate, because I truly believe that if we don't celebrate the good times, you're just going to be back to the mundane in about a second. So you've got to take time to commemorate these things

Starting point is 00:42:26 and have some fun because there's a lot of, brushing your teeth in life, going to the grocery store, emptying the dishwasher. Like, it's just a bunch of mundane things. But if you celebrate the great things, those are the memories, man. They really are. You've got to celebrate them while you're here because it is fleeting. So for us, what are we doing now after we paid off our mortgage?

Starting point is 00:42:45 Well, we've made some changes in our lives that have allowed us to both, I guess, choose careers and choose businesses that we enjoy. I left my 9 to 5 in early 2020 after 15 years working in corporate event marketing. It just wasn't for me anymore. I didn't have a lot of passion towards the topic. I'd done it for a while, made some great money, made a big impact in the industry, but I really had a desire to help people along their family finance journey. So I decided to make this my full-time thing in early 2020, and now I've been at it for two years.

Starting point is 00:43:19 I absolutely love it. I wish I would have done it sooner, honestly. And mortgage freedom gave me the confidence to say, well, you know what, if I completely screw this whole thing up, at least we'll have the house, right? And for me, I was just excited about it and having less expenses in our lives on a month-to-month basis gave me the confidence to say yes. And so I am so happy with my career choice, my life plan, and I have a lot more time to be present with my kids. I work a 25-hour work week. I pick them up, I drop them off from school. I pick them up.

Starting point is 00:43:54 I'm the soccer coach. I'm a PTO treasurer. I'm just, I'm more involved than I used to be, and I really love my life right now. That's amazing, and that's what everybody needs to take away from this, is look at the freedom and he has now. He was allowed to make that decision. He enabled himself to make that decision because he paid off his mortgage. That was one of the biggest factors to help him to be able to have this freedom, to be able to work

Starting point is 00:44:16 25 hours a week, to build a business that he loves, and be able to do the things that he wants every single day, which is really cool. And I absolutely love that. That's what I love about your story. Thank you, man. I appreciate that. Absolutely. So one thing we asked all of our guests is what are some of your favorite books, specifically if you have any personal finance books that you love that you've read recently. Oh, yeah. Well, I'll just name one because I know sometimes those lists can get long. One that made a really big impact on my life over the past year was Die with Zero by Bill Perkins. So for a long time, I was on this Dave Ramsey train and I absolutely love it. I still a big fan of what Dave did and for my family and my life and the influence

Starting point is 00:44:53 that came from reading total money makeover. But over time, after we were mortgage-free, we hit this coastfire kind of level of having a half a million dollars of retirement assets by 40 and like, hey, if we see where this goes, it's going to be multi-millions. We're going to have plenty. So this die-with-zero concept is, hey, life is for living. Enjoy what you got. It's for the super saver out there being like, okay, don't die with me. millions experience a million experiences now because your family is going to want to be with you. Your friends are going to want to be with you. They're going to want to see more of you and more time with you than having a pile of money at the end of the road. And really, selfishly,

Starting point is 00:45:34 so are you. You're going to want to have more of those experiences. And yes, leaving something to your family is a fantastic thing to do. But wouldn't you want to make that impact now? Wouldn't you want to give to that charity now while you're here and see that impact? Or wouldn't you want to have some of those experiences with your family now. So I guess the point is, yeah, don't be irresponsible with money. It's not a Yolo kind of book where it's like, hey, spend it all right now, but it's also not a deprivation book, somewhere in the middle where it's like, hey, you've done well, enjoy your life. So if you were maybe saving 50% for a really long time and you've done some incredible things, enjoy, dial it back. So we were impacted that by we were saving 50% of our money

Starting point is 00:46:12 and now we're saving about 10% of our money. We're just spending more of it and enjoying our lives. So that book, that's very impactful. That's fantastic. I'm going to definitely check that out. I haven't heard of that book, so I will definitely check that out. And I'll leave a link to that book in the show notes as well. That's very, very cool. So, Andy, this is another one that we ask every single guest that we have.

Starting point is 00:46:30 And a lot of times we have a lot of entrepreneurs on here and a lot of business folks as well. And it's interesting to see the different answers for each person. But what does wealth mean to you? Oh, wow. Well, basically now when I hear of wealth, I think almost less of money and I think of time. It's time freedom. It's the ability to craft your day in accordance with your values. And if you're a family person,

Starting point is 00:46:53 it's the ability to craft your time in accordance with your family values. What do you wanna be? Who do you wanna be remembered as? Who do you wanna impact? And how are you crafting your time to align with those values? So every day, for the past two years, I've been amazed that now that I own my time,

Starting point is 00:47:12 it's quite a responsibility to say, okay, well, how are you using that time to best live out those values. So I've been really excited and it's a constantly changing process. So for me, yeah, wealth is time control, honestly. That's amazing. That's what we talk about on the podcast all the time, just because wealth can create freedom.

Starting point is 00:47:29 It can create freedom for time and energy and everything else in between. And that is so cool how your story is proof that that is how you can utilize wealth to create that time and create that freedom. So that is so cool. So Andy, thank you so much for coming on today. Where can people find more about you

Starting point is 00:47:44 and listen to your podcast and all those other things? Yeah, if you are listening to this podcast right now, the best place to hang out with me is to go to your favorite podcast player and type in marriage, kids, and money. Again, it's a show focused on helping young families build wealth. So yeah, marriage, kids and money, that's the best place to find us. Amazing. And we'll link that up in the show notes as well. Andy, thank you so much for coming on. This was such a wonderful interview.

Starting point is 00:48:05 We truly appreciate your time today. Thank you, Andrew. I appreciate it. Rosen lasagna, medium power. 15 minutes. Sounds like Ojo Time. Let's play. Feel the fun with play.

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The Personal Finance Podcast - The AMAZING POWER of Paying Off Your Mortgage with Andy Hill

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