Jakarta, Armfalcon.com – Artist Andhara Early and her husband Bugi Ramadhana shared stories about their reckless decision to pay off their remaining mortgage debt (KPR) with 12 years to go.
It is surprising that they made this decision while on no income.
In fact, in the past five years, Andhara and her husband have decided to work in an office. However, the Covid-19 pandemic has forced this couple to work from home (WFH). The work pressure when WFH is very heavy.
“One year, two years I can hold it (office job), when I enter my third year I have problems, my mental health is disturbed, the impact is on the family, the children are targeted. My husband is like that too, the pressure is higher. He is the one who decides to leave ( resign) first,” said Andhara, when he guested on Rumpi: No Secret Trans TV, Thursday (27/4/2023), as quoted second.
Andhara, who supported her husband’s decision, finally chose to stay at work for a year, but after that followed in her husband’s footsteps.
In a state of no income, ongoing debt repayments are of course a burden in itself.
However, for the sake of peace, they are willing to lose their savings to pay off mortgage repayments plus penalty fees (penalties for repayment).
Whatever the type of debt, the existence of debt will certainly be a burden for anyone. What’s more, mortgage debt whose interest fluctuates, but there will be financial consequences for people who do this, here’s the review.
Emergency funds are also depleted
When savings are drained, there will be a possibility that your emergency fund will also be drained. An emergency fund is a fund that is prepared to anticipate unwanted or urgent things to happen.
If the emergency fund is used up to pay off debts, and an urgent need arises, then someone may be forced into debt for this one thing.
It’s a good idea if you really want to make payments, then leave an emergency savings equal to at least six times your monthly expenses just in case. Or you can also leave savings worth 15-20% of your total net worth before paying off your mortgage debt.
Net worth will increase
By reducing unpaid debt (KPR), your net worth will increase according to the value of the house you own.
Net worth is obtained from the result of reducing the value of the total assets and total debt that you have. Net worth should supposedly increase over time.
The thing that should be considered is the value of the investment assets owned. If most of the wealth we have comes from investment assets, then this will indicate that we are getting better at doubling our wealth in the future.
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