Many money advisers are less than enthusiastic about the idea of paying off the mortgage early. I think they are wrong. It is certainly true that there are circumstances in which it makes sense not to do so.Cognitive learning meaning if your interest rate is so good that the bank just made a bad bet in giving you that low rate, you might want to continue enjoying the benefits as long as possible.Cognitive learning meaning in many other circumstances, paying off the mortgage can be a fine money management move indeed. Reason #1 — it provides peace of mind.

I disagree.Cognitive learning meaning we all spend money all the time to gain access to good feelings–the excitement that comes from riding a rolling coaster, the connected feeling we get from making a donation to our favorite charity, the ego boost we obtain from sitting in a car that shines after its trip through the car wash.Cognitive learning meaning the peace of mind obtained from paying off the mortgage comes at a higher price than most feel-good purchases. But the good feeling we obtain from making this choice lasts a long time.Cognitive learning meaning I say that peace of mind is worth a lot, and those who know that they would feel a lot better about their futures if they didn’t have a monthly mortgage payment to make should give serious consideration to the idea of paying off the mortgage.Cognitive learning meaning feeling good about your future is worth a lot.

Actually, peace of mind is not the only good feeling that can be obtained from paying off the mortgage.Cognitive learning meaning another good feeling that comes from taking this step is the feeling of being in charge of your finances. Many of us often think of doing something to improve our financial picture, but fail to act on those thoughts.Cognitive learning meaning pay off the mortgage and you have done something concrete and tangible. You will have made a difference and you will know it. That may give you confidence to take a good number of other money actions that also need to be taken.Cognitive learning meaning

It’s not the norm to pay off the mortgage early. So you will also feel liberated from conventional thinking if you take this step. That also can be a big plus.Cognitive learning meaning pay off the mortgage, enjoy that benefits that flow from doing so, and you will begin thinking of yourself as the money expert that knows the most about what is best for you, inc.Cognitive learning meaning you are! Effective money management requires a certain willingness to engage in independent thinking, and even the fact that you are considering the idea shows that you have what it takes.Cognitive learning meaning going ahead and taking the plunge will confirm for you in your own mind that you are one of those willing to go your own way when necessary to make financial dreams come true.Cognitive learning meaning reason #2 — it reduces costs of living.

Most importantly, it does away with interest costs. If you are like most middle-class workers, interest costs are a big item in your monthly budget.Cognitive learning meaning you have to live somewhere. So it is not realistic to think that you can do away with housing expenses altogether. But you do not have to pay interest costs.Cognitive learning meaning those are an add-on imposed on those who elect to borrow. Elect instead to pay off the mortgage, and those costs disappear into thin air. Nice!Cognitive learning meaning

If you are not in a position yet to pay off the mortgage altogether, you might try paying off just enough to eliminate mortgage payment insurance costs (PMI).Cognitive learning meaning doing that will allow you to enjoy in a smaller way the magic trick of making costs of living disappear and may encourage you to take bigger steps somewhere down the road.Cognitive learning meaning reason #3 — it diminishes the fear of job loss.

One of the biggest fears that trouble middle-class workers today is the fear of job loss. Money advisers tell us to put six months of living expenses away to cover emergencies.Cognitive learning meaning but don’t you worry at times that in the event you really do experience job loss that that will just not be enough? What if you paid off the mortgage, and no longer had to make those monthly payments?Cognitive learning meaning in those circumstances, the prospect of a job loss would not cause nearly as much worry.

There are lots of spending categories that you will be able to cut back on if you lose your job.Cognitive learning meaning you don’t need to go out to eat as often as you now do. You don’t need to take expensive vacations. So there are places where you can cut back if so required.Cognitive learning meaning but you have to make the mortgage payment, don’t you? So that one is the real source of the worry over job loss. Do away with that one, and you have to a large extent addressed your concern over what will happen to you financially if you lose your job.Cognitive learning meaning

The other side of the story is that paying off the mortgage early is a celebratory event. You have heard stories from the old days about people burning their mortgages, right?Cognitive learning meaning there was a time when the dislike of debt was such that people made a fuss over eliminating it, as they do when they make a fuss over wrapping presents for the birthdays of their friends.Cognitive learning meaning we need more of these sorts of celebrations to mark the progress we make in the money management area of our lives. Don’t look at paying off the mortgage just as something you do to escape worry.Cognitive learning meaning look at it as something you do because you like the freedom that comes from no longer needing to make payments to the company store. Celebrate the financial freedom win you experience when you reach the point where that monthly mortgage payment is no longer one of the items on your list of bills that must be paid.Cognitive learning meaning reason #4 — it’s a saving goal that provides strong motivation.

The conventional saving goal–financing an old-age retirement–is not a goal that generally provides the motivation we require to actually take steps to move money from the spending column into the saving column.Cognitive learning meaning it is short-term saving goals that work. Paying off the mortgage early is a short-term saving goal (at least compared to financing an old-age retirement).Cognitive learning meaning make a decision to pay off the mortgage, and you will begin to think about how much you will enjoy reaching the goal. Your anticipation of the good feeling to come will cause you to save more than most middle-class workers think is possible.Cognitive learning meaning motivation matters. Reason #5 — it’s a marriage strengthener.

What cements a marriage is the things you do together, the things you accomplish over time by combining the power of the different skill sets possessed by the two marriage partners.Cognitive learning meaning don’t you feel good about your spouse when you work together to make a good purchase of a new piece of furniture, first doing some research, then talking over pros and cons of different options, and finally making a decision that you know is the right one?Cognitive learning meaning going through that sort of process helps one spouse appreciate the good things that the other spouse brings to the partnership.

Paying off the mortgage early is a long-term project that requires the use of a variety of different skills.Cognitive learning meaning you are going to need to make numerical calculations to determine where you stand. You are going to need to make decisions to cut spending in other areas to come up with the money needed to double up on mortgage payments, and so on.Cognitive learning meaning at the end of all this, you will feel like you climbed a mountain together. On the day the final mortgage payment is made, it will feel like you are at the top of the mountain looking out at an awe-inspiring view.Cognitive learning meaning you will reach to your spouse and want to hold her (or him). You will love her (or him) a little more than you did before you embarked on this adventure together.Cognitive learning meaning reason #6 — it highlights the benefits of financial freedom.

It was our joint decision to pay off the mortgage early that convinced my wife boo of the merits and feasibility of our plan to seek financial freedom early in life.Cognitive learning meaning in my case, it was a job loss that got me thinking about this stuff. But I would not have made the progress I did in the time I did without an awful lot of help from her.Cognitive learning meaning it was the mortgage pay-off that got her on board.

Why? Because she needed to see something tangible to understand that financial freedom really is attainable to middle-class workers early in life.Cognitive learning meaning I had talked to her about financial freedom many times and the words were just words. When she reached the point when she no longer had to make out a check to the company holding our mortgage, that was not talk.Cognitive learning meaning that was real. From that day forward, she was a believer. That made a big difference. Reason #7 — it’s a safe investment.

Money directed to paying off the mortgage early pays a highly predictable return–the reduction in interest expense achieved by doing so.Cognitive learning meaning at this time of overvalued asset classes, that’s something not to be overlooked. You know you are getting a nice return on your investment when you use it to pay off the mortgage.Cognitive learning meaning reason #8 — the tax deduction is often oversold.

Many do not pay off the mortgage early because they do not want to give up the tax deduction available to those who make mortgage interest payments.Cognitive learning meaning that’s an important concern. The reality, however, is that many do not obtain as much benefit from the tax deduction as much conventional money advice might lead them to think.Cognitive learning meaning if you do not itemize your deductions, you don’t get the benefit. If you are subject to minimum tax rules, you might not obtain the full benefit.Cognitive learning meaning you need to check your circumstances to see if the availability of the tax break really justifies a decision not to pay off the mortgage. Reason #9 — it fosters a low-spending mindset.Cognitive learning meaning

We all rationalize spending in this consumer wonderland of ours. One way we rationalize is to compare the costs we incur with a new expense with the other expenses we are incurring for other things.Cognitive learning meaning did you ever find yourself saying “yes” to a $3 charge for a bottle of water because it is being offered at a baseball game at which you have already incurred a big expense for tickets and for parking and for food?Cognitive learning meaning

There are all sorts of complexities involved in hanging on to a mortgage. The most important one is that the big number in your budget category for housing expenses makes it hard to keep a firm grasp in your mind on how much you need to earn to keep body and soul joined another month.Cognitive learning meaning get the total monthly number down, and the entire money management project becomes a lot more, well, manageable.

Financial life planning is a hot idea.Cognitive learning meaning for good reason. The key to success with a money management plan is achieving an integration of life, work, and money goals. No one cares about the money itself.Cognitive learning meaning what we all care about is the exciting things we can do with our lives if we win higher levels of financial freedom early in life. So the key to becoming motivated enough for your financial plan to succeed is focusing on how the success of that plan will enhance your enjoyment of life.Cognitive learning meaning

Most people who believe that they entirely lack the budgeting gene stick to an informal sort of spending plan all the same. Say that you save nothing and always owe money on credit cards.Cognitive learning meaning would it be fair to say that you keep to a budget? If you try to limit the amount of your credit card debt to $5,000 (or any other number), it would be fair to say that.Cognitive learning meaning it’s not a terribly effective budget, to be sure. But any rule that you…

A good percentage of your spending is directed to the basics of living, spending categories that you can't do much about.Cognitive learning meaning you've got to pay the rent. You can't do without electricity. You need health insurance. It's important to distinguish this type of spending from types over which you have some control.Cognitive learning meaning if half of your budget covers the basics of living, you might have only $30,000 of…

My concern about how much I give is voiced in an indirect way on page 221 of my book, "passion saving: the path to plentiful free time and soul-satisfying work." following a table showing what my family spends on all of our various spending categories (the amount shown to be allocated to the charity category is $75 per month), the following words appear: "for the past few years, we have been able to make an additional amount specified…