A Plan for Retirement of $180,000 Mortgage

I am not a finance expert nor do I have the experience many of you do with home mortgages. I am in the rare and some would say enviable position of having no mortgage because my family lives in a home provided to us by the church. We actually live in the home provided by my wife’s church. FUMC Hudson also has a home set-aside for the pastor. That home is currently rented, the proceeds funding primarily the $180,000 mortgage (used to purchase a new church boiler a few years ago), followed be taxes (the home is tax-exempt when it is occupied by clergy) and one quarter of the utilities for the house I do live in.

Because the pastor of this church is no financial expert, this church is fortunate to have a skilled finance team committed to responsible fiscal management. Leaders have taken the Financial Peace University course and each one lives the principles of the program:

1. Have $1,000 emergency reserve fund

2. Pay off all debt (except housing debt)

3. Keep 3 to 6 months expenses in savings

4. Invest 15% household income in Roth IRAS

5. Fund college for children

6. Pay off home early

7. Build wealth and give it away

(for more information contact jim@mcgowanfinancialcoaching.com)

In addition to working with a team of responsible managers, this congregation is fortunate to have a pastor who does not need to live in the church-owned house. Rent from that house raises $800 a month to pay-off the $180,000 mortgage. Yet the church cannot reasonably rely on that rent to fund the mortgage. The average pastoral tenure is four years in one place. Even if I were to stay in FUMC for seven or eight years (which I hope to do, God willing), it is not always easy to find and keep tenants.

We need a plan to pay-off the mortgage; a plan which requires us to work harder at fundraising and at cost savings. Financial Peace University teaches that 97% of Americans DO NOT seek to pay-off mortgages early. We do not think we have enough money to do so. Our unwillingness to make sacrifices in the present forces us into making longer-term sacrifices that we refuse to fully appreciate. In order to pay-off the mortgage (and to stay out of the habit of borrowing money from savings), we will need to make difficult spending choices. If the mission is worth it to us—if step seven sounds good to us—then we will need to be clear about our objectives and how we plan to achieve that fruitful future. This is as true in the church as it is in our homes.

So I hope you will continue praying for wisdom for your private finances and for our finance committee and other leaders who manage our collective resources. God will direct our way forward!

Saint Paul wrote to the Roman Christians:

I consider that the sufferings of this present time are not worth comparing with the glory about to be revealed to us. (Romans 8:18)