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Ask Dave

Why Save Before Paying Off the Mortgage?

Mark wants to know why Dave says to save before paying off the mortgage.

QUESTION: Mark asks why Dave suggests saving before paying off the mortgage.  Isn’t the house a liability?

ANSWER: A house is an asset - the mortgage is the liability.  A house makes you more money than it costs you, so it’s an asset. You should pay off the mortgage as fast as you possibly can, but you cannot ignore retirement savings while you’re doing that.  There are 70-year-olds with paid for houses and no retirement savings, which is not a financially wise place to be.