Like David, I Have Encouraged Myself

There is an occurrence in the Bible where David encouraged himself because there was no one else around to do so (see 1 Samuel 30:6). After Thursday's chat about the benefits of paying off a mortgage early, I become encouraged all over again. I ended the chat with saying "when times meets opportunity" I will be the person who chooses to pay off her mortgage. Well the time and opportunity is now!

I love quotes. I am a self proclaimed quote junkie; some I make-up and some I get from others. One that I love and that is often echoed throughout the personal finance community is "when you begin to do smart things with money, money will become attracted to you." Okay, I'm not sure if this is verbatim but that's the way I hear it in my head. LOL.

I will share the details of my personal philosophy to building wealth in a separate post, but in the meantime, I will list the steps involved.

1. Create and maintain a monthly budget.
2. Determine your Wealth Building Index (WBI).
3. Open, designate and fund a baby emergency fund (e-fund) account.
4. Payoff non-mortgage debt using the debt snowball method.
5. Complete your e-fund account by increasing it to 9 - 12 months of living expenses.
6. Fully fund retirement - at least 15% of your current salary...generally through a combination of employer sponsored plans and Roth IRA.
7. Payoff mortgage and build wealth through non-retirement specific accounts.

I am proud to report that steps 1 - 6 are completed and I am currently working on step 7. My preference is to accelerate the mortgage payoff and simultaneously build wealth but the mortgage part has been on hiatus. Long story short, I took a temporary pay cut (voluntary) in order to free up more time to achieve other goals. ***this is a great place to pause and emphasize how being debt free gives you choices. I could not have taken that pay cut if I was burdened down with debt. The pay cut was at my discretion because there were other things I wanted to do with some of my time. It is my hope that you are encouraged and motivated to become and live debt free as well.

I digressed;-). Where was I? Oh yeah, so now that I have successfully managed living on less, literally, the passion to payoff my mortgage has been rekindled. The sun shall not go down today without me reviewing my monthly cash flow analysis (that's what I call my budget) to see where I can "find" some additional funds. Beginning January 1, 2009, I will send extra principal payments until that booger is paid off!

~MMC