Marvelous Money: Our mortgage plan update

10 April 2024

One of the most frequent requests I get, on all platforms, is for a mortgage plan update. This is funny to me (the requests are usually random and out of the blue!), but I welcome it, and I understand it: there are not many people willing to talk about finances in a personal and detailed way. But here I am! Willing to talk! So let’s get into it, because we have made a shift since our last conversation…

A brief overview of where we’ve been:

Spring 2013: We buy our house! We pull together a 13% down payment, because that’s the most we could afford.

Fall 2014: After paying off our car loans, we use about half of what we had been paying to make an extra mortgage payment each month (directly to the bank), and the other half to build up a fund for our next car purchase.

Fall 2015: Car fund complete, we shift that amount we’d been paying toward our mortgage, too. Instead of paying down our mortgage directly, though, we begin transferring the extra monthly amount into a specific home brokerage account and invest it, with the goal of paying off the mortgage balance in one lump sum once we reach the amount we need. I talked about that here.

2018: We shift our strategy. Instead of paying off our mortgage as soon as our home brokerage account reaches the right amount, we plan to keep saving a little longer, until we’ve reached a large-enough amount of money that, if carefully invested, the returns themselves would be large enough to cover our monthly mortgage payment (meaning our mortgage would no longer need to be a part of our household budget). I talked about that here.

2022: With June in (public) kindergarten, we shift most of the money we had been paying for preschool each month towards an increased monthly transfer to our home brokerage account.

2023: Our home brokerage account reached the amount where we could begin taking withdrawals for the monthly mortgage payment… but we didn’t begin taking withdrawals.

Wait, what?!

Yes, indeed. In yet another change to the plan, after much discussion, we agreed that we wanted to keep rolling with our current situation indefinitely: paying the monthly mortgage payment to the bank out of our salaries, and contributing to the home brokerage account each month while letting it grow.


To put it simply, our standard of living was (and is) perfectly comfortable. We don’t see a compelling need in our budget for our mortgage payment right now. Our current plan is to do this for the foreseeable future, or until our needs change, or until it no longer makes sense. Just as I shared in my last post, the hope is that this account will eventually pay for college tuitions, weddings, a rental property, some really extravagant generosity, or – most likely – all of the above.

Suffice it to say, this gives us an incredible amount of flexibility, and peace of mind. We knew that, I think, but we recently had an experience that drove home just how much we value living below our means. Story time? :)

Recently, a house came on the market that we were very interested in. Though we had a few alerts set up, we didn’t consider ourselves actively looking, and so scrambled to get in touch with a realtor and get prequalified for a loan. We went to see it on a Friday, the day it went on the market, and then debated whether we should put in an offer almost constantly for the next 36-ish hours.

We ultimately decided not to. As we were debriefing on Monday (when, naturally, the house went pending), John asked me how I felt. Relief was my overwhelming feeling. The weekend had been incredibly stressful: not only because we were thrust into making a fast decision (when we are two of the slowest decision makers on the planet!) but, had we gone forward, we would have taken on a much larger mortgage with a much higher interest payment. Our monthly discretionary payment to our home brokerage account would have been essentially redirected towards paying our new mortgage.

Could we have done it without much change to our lifestyle? Yes, because we were already used to forgoing that money.

Would it have potentially made us feel more stressed? Almost certainly. When we’re paying ourselves each month, we know we can always skip a transfer if something comes up – but you can’t skip a mortgage payment. At work, John doesn’t have to hustle harder than he wants, or feel pressure to take the extra appointment at the expense of our time together as a family. We feel the peace of knowing we can release my salary if something were to change with our circumstances.

There’s a part of me that doesn’t like our current plan. It’s so open-ended! We don’t have a specific goal we’re trying to reach! The larger part of me, though, is extremely grateful. This margin that we’ve fought for — keeping our standard of living stable while our income has risen and costs, like daycare/preschool, have gone away — has given us an incredible peace of mind. It has helped us to be more present, joyful parents. It has helped keep our marriage happy and stress-free. It has allowed us to give generously and freely to the people and causes we love. All of this is of almost incalculable value to me.

As I was writing this post, chapter 10 from Morgan Housel’s exceptional book came to mind. “You don’t need a specific reason to save,” he writes. “You can save just for saving’s sake. And indeed you should. Everyone should.”

Does this mean we will never move to a more expensive home? It does not. Our run-in with the market last month actually gave us a lot of clarity on what we’re looking for in a next home, and what we would and would not be willing to move for. With a narrowed scope, we feel ready to go if the right home comes on the market, but also perfectly content to wait several years should it not. And while we wait, that brokerage account will (hopefully) continue to grow – making action even easier when the time comes.

And now, to one more practical question before we close:

Over the years, readers have asked whether our feelings about this strategy have changed since we shared it, especially given the market volatility during the pandemic. Did the market drop in March 2020 make us wish we’d made payments directly on our mortgage? What has been the emotional impact of this plan, now that we’ve been at it for a bit?

This is an excellent question, and one of the most important ones to get clear on before embarking on a plan like this yourself. In a way, I’m grateful that the pandemic drop proved what we thought all along: that we both have a high tolerance for market volatility and risk. We set out on this plan knowing what we had set aside could decrease in value – and we were okay with that, considering our time horizon and the purpose of these savings. Also, not all of the money is invested in stocks, and most of it is managed in a defensive style which is more protected from volatility. We also have a fully-funded emergency fund, which helped assure us that even if something really unfortunate were to have happened (like, both of us losing our jobs WHILE the market plummeted), we still would have had options.

Key to our plan? We practice dollar cost averaging, or investing on a regular schedule, whether the market is up or down. No trying to time the market over here! Some months it will be up, which is great, and some months it will be down, which is also great – we can get in at a discount :) Over the long-term, though, we believe the market will continue to go up.

I’ll end this post the same way I’ve ended previous ones: if you like the idea of trying something like this, I would highly recommend working with a financial advisor. Of course, it’s possible to make investment decisions on your own, but I don’t want to give you the impression that it’s just me over here knowing all the things and that you should be able to do the same — John IS a financial advisor, and if he weren’t, we would definitely be seeking expertise on decisions of such magnitude.

And finally, I know this is a bit more of a niche Marvelous Money topic than we usually cover, and perhaps it feels wildly out of reach for you right now. I get that. I share this not to brag (!!!) or make you feel defeated (hopefully you know that!), but to perhaps stretch your imagination of what’s possible. At the very least, I hope it encourages you to value the peace of mind that comes from living below your means, whatever that looks like for you.

A few past posts that might be of interest:
Investing 101
Our Net Worth Meetings
Managing Money Together
Making Trade-Offs

A final reminder: I am not a financial professional, and nothing I say here should be construed as investment advice! I’m just one gal sharing her story :)

Let’s discuss! What questions does this post bring up for you? Anything we could discuss in a future Marvelous Money post?

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April 10, 2024 6:00 pm

Just chiming in to say that I LOVE this series, especially as I became a homeowner since you last published a post on this topic. With a 6% interest rate bearing down on us (which sadly feels like a deal these days!) it is a hot topic of conversation over here in our new-to-us bungalow! I think we have settled on making extra payments directly to the bank since the delta in the ROI from a brokerage account doesn’t feel quite worth the risk in the long run, but I should heed your advice to talk to a professional about that! Your series has been a very helpful framework to weigh out options. Thank you.

April 10, 2024 7:41 pm

What a gift that you continue to share your financial story so authentically with us! I would love to hear more about your philosophy on delayed gratification and things you’ve decided on practically – maybe like a Making Trade-Offs pt.2? Still one of my very favorite posts:)
I struggle with balancing sacrificing for the long-term (savings goals, retirement, etc) vs. enjoying life today since we aren’t promised tomorrow!

April 15, 2024 3:45 pm
Reply to  Em

Yes, if you’re willing to share! Thinking similar to a Prioritizing Spending vs. Savings post, but for life, not just wedding focused :)

April 11, 2024 9:09 am

My husband and I are actively shopping for a new home. So I can totally relate to ALL THE FEELINGS you had while weighing an purchasing a new home. The struggle is very real :)

April 12, 2024 6:55 am

Thanks so much for the update – I feel like I have been waiting since your 2019 update to hear more on this topic, ha! It is great to hear from someone else paying off their mortgage early (or setting aside the money as you are to pay it off if you wished to). We are doing the same and I am so pleased with how we have prevented lifestyle creep and been able to overpay, but as you say, not possible for everyone depending on circumstances. I would second a tradeoffs 2.0 post request! I would say the overpay versus nice holidays trade off is the one I can struggle with.

Also, if you had bought that other house, it would have been sad to get less enjoyment from your lovely new kitchen! How are you prepping to buy a bigger home, are you hoping to pay cash or would you buy but have a lower mortgage due to your current savings? (If you don’t mind answering!). This is something I wonder about as I think us paying off our mortgage will coincide with a need for a bigger home due to family size, so it can feel like we will forever be living on less deliberately to follow the budget and overpay the mortgage – but I hope worth it in the long long run!

April 12, 2024 2:13 pm

Thanks for sharing! People get very secretive about money, but everyone appreciates those who are open and sharing without being judgemental. You do a great job!
Your and my life stories have followed similar timelines, although that makes sense since we are about the same age. But our housing timeline has been so all over the place, lol. My husband and I bought our first house in 2012, sold it in 2017, moved, bought a new house in 2017, sold that one in 2022, moved and bought a third house in 2022. We have had quite a lot of luck in all of our house finds and I’m feeling really great about where we are now.

April 18, 2024 9:48 am

I love this so much! If you start another substack for personal finance tidbits, I would 100% join ;) Or, paid sessions where you and John just chat through finances. I have always valued John and your perspective in this area! We have a financial advisor but I’m often thinking “I wish John and Emily could sit down with us and give their input!!”