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Home > How do you keep focused on goals? Irrational fears in my way.
 

How do you keep focused on goals? Irrational fears in my way.

February 4th, 2011 at 06:21 pm

I have a problem, I make a plan then I change my mind. First I might decide to pay extra on my mortgage but then I start playing it over and over in my head and I think I should save a years worth of mortgage payments into saving FIRST before doing that.

How do you keep with your savings goals without getting side tracked and rethinking your plan.

The only debt I have is my mortgage. So I am causing myself mental STRESS over what to assign my extra money each month into.

If all the debt you had was your mortgage and you had a pretty secure job, what would you do? How do you figure out when to start paying extra on your mortgage?

******
My irrational thinking below, please don't let it sway your advice to the questions above:

I fear losing my job even though I have no logical reason to fear this, then having to get a new job. My job pays EXTREMELY well and I fear making my mortgage payment if I had to find another job. This is not rational either, Yes I am paid well and would more than likely take a pay cut. The reason the not make the payment is not rational is I have my BF living with me, he has not starting paying rent yet, but if this happened then he would be a shoulder to lean on.

I also currently save a large portion of my paycheck to retirement. If I did not save a dime to retirement at my new job, I would have to find a $18.77 per hour job. OUCH in this area that would be tough. So my fear boils down to how can I find a really good paying job IF all of a sudden world peace broke out.

I guess worst case I could try to sell my home. See I tried to sell it this summer but I know why it did not sell. BF has plans to do some stuff to the home which would will just add buyer interest at a later date. I just hope I can sell it for close to its value. If I was, I could buy a cheaper home and thus reduce my mortgage. I have 74K in equity IF it sold at value. In this town a decent home starts at 110K, so I could get a bare bones house for a loan of 36K and that I think I could afford on a NEW less paying job.

13 Responses to “How do you keep focused on goals? Irrational fears in my way.”

  1. ThriftoRama Says:

    Don't wait to save up enough to send payments. That never works. Try the snowflake method (you can google that for details). You basically send small amounts as extra payments. Say, you sell something on craigslist and make $20, you'd immediately send that $20 to your mortgage. (In addition to your normal payment, of course).

    I've chipped away at lots of debt like this-- student loan, mortgage, etc. Now we are debt free, except for a car loan. No mortgage. Having the house paid for gives you a level of flexibility and peace of mind that is unrivaled.

    So yeah, snowflake it. It's much more effective and less painful than stressing out or waiting to send in a lump sum.

  2. Petunia 100 Says:

    I worry about doing the best I can with my money, so I second-guess myself a lot too. Making a plan helps me NOT do that. Only in hindsight will we know what the optimal choice was. So you have to make some educated guesses and make the best choices you can.

    Maybe your savings hasn't reached your comfort level yet? You're a single mom with a mortgage, so there is a lot riding on your shoulders. It's perfectly natural for you to want a large cushion.

  3. MonkeyMama Says:

    Personally, I wouldn't pay any extra on the mortgage. I think you are side tracked and rethinking your plan because you are uncomfortable with the plan. Listen to your gut! (For me - I don't care how solid and steady my job is - ANY THING can happen!)

    I have a steady job and the mortgage is my only debt. When younger and having no kids, we tackled it hard, but since having kids there are times I regret paying more to the mortgage (in the past) and being more cash poor as a result. Thus, I am not a big fan of paying more to the mortgage, until all other goals are met and I have a large cash cushion.

    We are putting some extra to our mortgage this year, but we borrowed some refi closing costs a couple of years back - we are just repaying those costs.

    I know a lot of financially/well off people (millionaires in their 50s) who did not pay their mortgage much heed in their 20s and 30s. So though I would generally not recommend "worry about it later," I know that when it comes to mortgages, it works. Particularly if you have a reasonable mortgage with a low fixed rate. It gets *cheaper* and easier to pay down with time, due to inflation.

  4. MonkeyMama Says:

    P.S. I meant to say - the millionaires I mentioned either paid off their mortgage or kept it (with payments at about 3% of income?). I've pondered over the years that whether or not they paid off that last bit seemed to make little difference in the long run. Likewise, they ended up there (mortgage paid for or not amounting to a hill of beans) without pre-payments early on.

    Anyway, I wouldn't call your fears irrational.

  5. Miz Pat Says:

    I think you also need to save into an emergency unemployment fund. I have $6K saved in a fund I don't touch. Maybe put half in the mortgage and half in the emergency unemployment - that will deal with your fear and lower your mortgage debt, while giving you something to help your fear.

    I have the same problem. I'm divorced (THANK YOU, LORD) and on my own and I get scared but I'm doing that. I get paid every two weeks, and the other thing I do is always put money toward regular mortgage payments. I'm in February now and I already have half of March's mortgage payment ready. That makes me feel better about unemployment too.

  6. creditcardfree Says:

    It sounds like you are feeling insecure. I would increase your emergency fund to an amount that would feel more secure for you. I'd do this before paying down the mortgage.

    I'd also look at all your available cash as available in an emergency. For example, if you lost your job, and have cash allocated to house repairs, or car replacement...you would want to include this money for basic needs in that case. In otherwords, you would prioritize your cash needs differently if you lost your job.

  7. ceejay74 Says:

    Have you drawn up a bare-bones emergency budget? I have one that I keep up-to-date; it enumerates what I think I would need in a month, minimum, to keep my home, maintain a basic standard of living and stay away from collection agencies.

    If you've done that, determine whether you have 3 to 6 months of cash (ccf is right; count ALL cash) where you would be able to keep afloat. If you have that, I would pay some extra toward the mortgage. Not EVERY cent, since mortgage-only is not a bad debt situation, and since you have tons of equity. But just some extra every month.

  8. ceejay74 Says:

    PS: Thought I'd share my reasoning when I put together my emergency budget, since it was quite an interesting exercise. I deleted my govt student loans because you can get those payments suspended in hard times, but kept the private ones. I kept bus passes and a reduced haircut line item reasoning that I would need those things to look presentable and get to job interviews. I ADDED the estimated cost of buying health insurance for my family. I got rid of Internet but kept phone; although I'd need both to job-search, the Internet stuff could be done at a library. I kept mortgage and association dues but cut all other services and bills. I reduced my grocery budget by 50%.

  9. moneyclass Says:

    Im in the exact same situation as you. My only debt that I have is my mortgage. I do have alittle bit in savings. My job is secure.....i think. But i am always applying extra money to my mortgage every single month. You probably feel stress free that you dont have any other debt becuase i know i do. but can you imagine if your house was paid for?? that would totally lift alot of stress off your shoulders. so my opinion would be to keep paying down that mortgage and get that house paid for. then after that no one can ever take it away from you and you can enjoy life alot more.

  10. patientsaver Says:

    Like you, my only debt is my mortgage, but i've only worked very sporadically since Sept. 09.

    Whenever I worked I prepaid my mortgage all these past 15 years, and have just $30,000 to go on the 30-year loan.

    I don't regret prepaying it at all, because the sooner I can get that monkey off my back, life will be so much easier, including, most especially, during times of unemployment.

    I would say, as others have, to increase your emergency savings a bit if you are feeling insecure, but don't let your insecurity or indecision keep you from doing anything!

    The sooner you start, the better.

  11. laura Says:


    I suffered from the whole "What if?" scenario myself awhile back. Our situation is DH is the sole bread-winner, and I'm the SAHM to a family of five kids. When layoffs were happening left and right, I could make myself sick worrying about things. I then decided on a plan of action that included: pricing a family insurance health policy through State Farm, deferring my student loan, asking our school for 100% tuition assistance, scaling back on cable and the Y and classes for the kids. I was happy to see that we could exist with a roof over our head and food in our stomaches and we'd have to come up with new and cheap ways to have fun and be happy. That was three years ago. We've doubled our EF and I've looked into part-time work that would help.

    Have a plan. That will help.

  12. Savings Queen Says:

    I always socked everything I could into paying down our mortgage and our house has been paid off for quite some time. I like it, but I know it contributed to my frittering away money because if you don't have a mortgage you feel like you can just buy something if you want it. Suze Orman says she recommends an 8 month emergency fund due to this kind of scary economy. My feeling is that you might way to work towards the emergency fund and that will put your mind at ease.

  13. LittleMsMom Says:

    Thank you for all your comments.

    I think I will for the time being work to increase My Emergency Fund, so that I have 12 months of House Payments, Escrow Payments and Normal Expenses before I start paying down my mortgage.

    I think part of me knows once I start pre-paying my mortgage I will apply all my extra money to that and will not have money left to build up my emergency fund.

    As a single mother with a mortgage over my head, I think 12 months is not a bad Idea. I know in the past Dave Ramsey has said that depending on the situation certain people need a bigger Emergency Fund and I think I am one of those people. I need a bigger Emergency fund to minimize my mental stress.

    Thanks Again for all your suggestions and reassurance.

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