Step #5:
Become House-Rich AND Cash-Rich

For a variety of reasons, we don’t necessarily encourage paying off a home mortgage. In fact, as far as “debts” go, it’s the last one you should pay off.

BUT ... a mortgage is still a loan (not to mention it’s likely your largest expense every month). So if you ever want to be truly debt-free, work toward paying it off and save thousands in interest over the long haul.

You can cut your loan pay-off time in half by adding a couple of hundred dollars a month to your payment, depending on what your balance is. Or you can be less aggressive and make just one extra payment per year. (This can also be accomplished by switching to a bi-weekly payment plan. Check out our calculator, Should I Convert to a Bi-Weekly Payment Schedule, to see how you can speed up your loan pay-off this way.)

Next: Step #6: Budget Your Cashflow

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