Dave Ramsey’s Baby Step 6 – Pay Off Your Mortgage Early

by Hank Coleman

Total Money Makeover - Baby Step 6I wrote an overview of Dave Ramsey’s baby steps system from his book, The Total Money Makeover, and I have been dissecting each of his individual baby steps as well.

The Total Money Makeover is a personal finance book that I highly recommend and one of the greatest personal finance books to read.

Today, we will look at Baby Step 4 in more detail which is to invest 15% of your income for retirement. There are seven Dave Ramsey baby steps that you should follow in order that will lead you to financial peace. Dave Ramsey’s baby steps are…

Baby Step 1 – $1,000 Emergency Fund
Baby Step 2 – Pay Off All Of Your Debt With A Debt Snowball
Baby Step 3 – Fully Fund Your Emergency Fund
Baby Step 4 Save 15% Of Your Income For Retirement
Baby Step 5 – Save For Your Children’s College Education
Baby Step 6 – Pay Off Your Mortgage Early
Baby Step 7 – Build Wealth And Give

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Baby Step 6 – Pay Off Your Mortgage Early

Baby Step 6 with Dave RamseyIf you have gotten this far in Dave Ramsey’s get out of debt lifestyle change, then you are ready to for the biggest baby step of them all — paying off the mortgage!

The interest on a mortgage is staggering. If you look at it this way, that $250,000 house can turn into a $500,000 albatross payment over time depending on your mortgage payment, interest rate, length of the loan, and other factors. It honestly can sink you if you return to any of your old financial debt habits, such as increasingly relying upon credit cards.

But, it doesn’t have to be that way. Dave Ramsey’s Baby Step 6 is to pay off your mortgage early so you can live debt free.

Tips To Get You Started

By now you have paid off credit cards and built your emergency savings fund. That means a lot of money has been freed up, not to spend willy nilly. Instead, toss this money at your mortgage.

According to the Dave Ramsey Baby Step 6, use all the extra money at the mortgage that you can handle. Here’s why. Mortgages are the most expensive debt we all carry. At an interest rate of even 3%, it is a lot of money that gets tacked on in interest every month and year.

That means that for every month you make the payment as required according to your loan, you are handing over a lot of money to the bank in interest payments that you will never see again.

Pay Off Your Mortgage Faster

There are ways to pay off your mortgage even faster. Here are a few that you can use to help you tackle your mortgage debt in baby step 6.

For one, you can refinance your home loan to a fixed rate 15-year mortgage. That will force you to pay it off in 15 years, and save you a lot of interest. Another option, you can double the monthly payments, and you will save sizable on the interest.

This is what the debt freedom journey is all about, right? It takes a plan to tackle baby step 6 along with some patience, and dedication. It takes more dedication to take on this baby step than any other because of the sizable time and financial contributions that it will take to accomplish baby step 6.

Being free of the big mortgage every month is well worth your time. It does require creativity and a thorough commitment that you have to build up by paying down your credit cards and other revolving debts.

Either way paying off the mortgage early sure beats taking 30 years in total. Getting the right mortgage will make all the difference in being able to make this dream a reality. The next task on your list is going to be envisioning and planning your mortgage note burning party.

How do you imagine it? Envisioning how you will feel once you make that last payment as this makes a great suggestion to your subconscious mind to make it all a reality.

Will you be smiling, celebrating, and jumping for joy? Probably, and it will pay off well if you start seeing yourself doing that now. Make a game of it to see how fast you can pay off your mortgage.

What about you? Which of Dave Ramsey’s Baby Steps are you and your family on? Are you on Baby Step 6 yet?

Dave Ramsey Baby Steps

Baby Step 1 – $1,000 Emergency Fund
Baby Step 2 – Pay Off All Of Your Debt With A Debt Snowball
Baby Step 3 – Fully Fund Your Emergency Fund
Baby Step 4 Save 15% Of Your Income For Retirement
Baby Step 5 – Save For Your Children’s College Education
Baby Step 6 Pay Off Your Mortgage Early
Baby Step 7 – Build Wealth And Give

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 591 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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