Are you thinking of paying off your house? Or have you recently hit the major milestone of mortgage freedom? Maybe you're simply wondering about life after the mortgage is paid off.

I can tell you from experience that this can be a life-changing decision. 

Recently, our family paid off the mortgage on our $600,000 home, and we now live mortgage-free and completely debt-free. No payments to the bank, fewer worries about job loss or income drops, and there’s just something about owning your home outright. 

5 Ways Life After the Mortgage is Paid Off Looks Different

After we paid off our house, we had a big decision to make … What do we do with all of our extra money? 

Since we were making extra principal payments, we had around $35,000 extra to allocate each year. This was a lot of money for us!

Here’s what we’ve done to build our wealth further, have more fun, and embrace exciting opportunities today. 

1. Vacation More

The year after we paid off our mortgage, we traveled more than we ever have as a family. 

• We went on an all-inclusive family vacation to Cabo San Lucas in the spring.
• In the summer, we visited the Upper Peninsula of Michigan. 
• Southern California was our couple’s getaway destination in the fall. 
• And to round out the year, we even went to Disney World.

Some of these vacations were supplemented by travel rewards, cashback credit cards, and airline miles (and in the case of Disney World, it was generous grandparents), but they wouldn’t have been possible without our mortgage freedom and the extra cash we had available to us. 

Since we love traveling so much, we now allocate 5% of our annual budget specifically to travel. We automatically allocate money in our travel line item through our favorite budget app, Monarch. That way, we always have vacation money available when we want it. 

This winter, we’re headed back to Mexico for some more fun in the sun.  

Goodbye mortgage, Hola Cancun!

2. Invest More

With more cash available, we had thousands more opportunities to invest our money. After all, the best way to create the future you want tomorrow is to invest your money today. 

Here are some of the routes we took for our investments:

401k 

We continued to max out my employer-sponsored retirement plan because of the 15% match I received on all contributions. By the time I left my job in 2020, we had a balance of nearly $200,000!

Roth IRAs

For a few years, we maxed out our Roth IRAs as well. This tax-advantaged vehicle allowed us to amass a sizeable nest egg for our retirement as well. 

Health Savings Account (HSA)

We learned the power of the HSA after paying off our mortgage. This savings and investment option allows you to sock away money for future healthcare costs. With the cost of health care rising more and more each year, we’re happy we’re planning ahead. We partner with Lively for our HSA.

Check out our Lively HSA Review here.

529 College Savings

The total cost of public in-state universities for our children in the 2030s will be around $200k each! That’s why we’re investing for their future with 529 college savings plans. Instead of throwing it in a savings account, we’re investing money while they are young, so we’ll be able to help them graduate student debt-free. 

Through all of our investing efforts, we have amassed $750,000 in retirement investments (outside of our college savings). If we were to let this grow without contributing another dime, this could grow to $2.2 million by the time we reach 60 years old, using a 7% real rate of return (check it out using this compound interest calculator). That $2.2 million could provide us with over $100k per year in retirement using the 5% rule. That's more than we'll ever need. We have officially hit Coast FIRE! No more retirement investing needed for this family!

3. Save More

Outside of long-term planning, we were both ready to enjoy some short-term upgrades. We did this by saving cash automatically each month in our Crew bank account. 

Crew’s “Pockets” feature has made this process easy and fun. We can visually see how much we have in each “Pocket” and get excited as we approach our milestone goal numbers. 

Outside of the vacation pocket which I already spoke about, here are some of the savings goals we’ve been able to enjoy already:

A New (to us) Car

After 14 years of driving the same sedan, our growing family was ready for a new (to us) SUV. With around $30k saved up in one of our buckets, we recently bought a gently used Acura MDX and we love it!

We use it for road trips, soccer tournaments, and for trips to Home Depot and Costco. 

After enjoying this new SUV so much, we decided it was time to upgrade our other 13-year-old car. Last year, we got a new Ford Mustang Mach-E! 

It’s been two full years now and it's fantastic. Driving new or newer cars is such a refreshing change after a decade-plus with older cars. The technology nowadays is insane! 

Going fully electric with the Mach E has been a lot of fun, too. Without going into a full review of the car or going electric in general, I’ll say my favorite pros are the speed and the fact that I never have to go to a gas station again. My only con is the range anxiety with the lack of charging stations. Maybe I’ll do a full review soon!

An Updated HOME

During the pandemic, we were sitting around our house a lot and our curious minds found ways to improve it. Luckily, we have enough money in our home improvement savings to pay for an updated kitchen. We created a new bar top and an overall open-air feel to our first floor. It’s been so worth it!

We also replaced our entire driveway and redesigned our bedroom with all-new furniture.

New Pets

We also bought some pandemic pets as well! Two hypoallergenic Siberian kittens became our kids' new best friends. 

There’s something about these digital pockets of money–it feels like you are getting permission to spend and enjoy your money. It’s been a game-changer for our family in this mortgage-free stage of our lives.

4. Give More

Around the time we paid off our mortgage, I realized that we were only giving 1% of our after-tax income. Now, there’s nothing wrong with that, but I felt like we could do more. 

Jumping all the way to 5% or 10% sounded like the right move in theory, but in practice, it was a lot more difficult. 

So we decided to ladder up our giving over the next few years: 

• In year one, we set the goal of giving 3%
• In year two, we went for 5% giving

Each of these progressive goals made the process more fun and we discovered some causes and charities that moved our hearts. 

Today, we do 10% giving, but with our own spin on it. 

• 3% for family giving (through gifts, cash and contributions to start their investment journeys)
• 4% for individual giving between my wife and me (charities, houses of worship, supporting friends and family)
• 2% for the giving during the Christmas holiday

In the beginning, giving away this much of our money felt very difficult. Now, it’s one of our favorite things to do with our money. It's been a very positive way that life changes after the mortgage is paid off.

5. Take More Risks

In 2020, I took the plunge into solopreneurship. I left my cushy corporate career to pursue my solo business and grow it. 

I could not have felt confident enough to do this if we hadn’t paid off our mortgage early. Even if I completely screw up my business, I know that we’ll never lose our house. 

We own it outright and that peace of mind helps me rest easy at night. 

I left a nice career with excellent benefits that paid me more than double what I’m making now as a family finance coach. 

But every minute that I’m able to produce my podcast, write an article, speak at a conference, coach couples on their finances and make videos, I’m happier than I’ve ever been working. I never knew “working” could feel like this. 

Recently, my wife decided to change careers, too. She works part-time as an esthetician. We both work around 20-30 hours per week. By working less, we’re able to live more. 

It’s been great for our marriage, our relationship with our kids, and our health. 

While becoming mortgage-free wasn’t required for us to experience these 5 benefits I just shared, it sure made it a lot easier. 

If you're considering paying off your mortgage early, check out our free Mortgage Payoff Calculator. This calculator will show you the impact of extra mortgage principal payments and how quickly you can become mortgage-free.

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What would life after the mortgage is paid off look like for you?

Please let me know in the comments below. 

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