Should I pay off my mortgage early? Save for education? Use the new NISA? The answer I found after 19 years of parenting

Should I pay off my mortgage early?

Should I save for my children's education in cash?

Or should I invest in the new NISA?

I think these are worries we see quite often lately.

I have been thinking about them for a long time, too.

I am currently in my 19th year of parenting.

My eldest daughter has moved on to vocational school, my eldest son is in elementary school, and my second daughter has turned three.

When the children were small, I thought education expenses were a problem for the distant future, but when they actually start school, it costs more than you imagine.

That is why I have struggled with where to allocate money: mortgage, education expenses, or retirement funds.

In this article, based on my 19 years of parenting experience, I will write about my own thoughts on:

* Early mortgage repayment

* How to prepare for education expenses
* How to approach the new NISA
To give you the conclusion first,



In the end, it depends on each family.

It is a blunt answer, but I truly believe it.However, there are ways of thinking to help you make that decision.

✅ Early mortgage repayment depends on interest rates

First, the mortgage.

I believe whether or not to pay it off early depends on the interest rate.

For example, if it is a fixed rate around 1%, I don't think you necessarily need to rush to pay it off early.

The reason is simple.

Because investing that money over a long period has the potential to result in more growth.

For example, index investing like All Country (global stocks).

Of course, no one knows what future returns will be.

There is no guarantee of principal.

Even so, looking at past performance, I think a figure of around 6% annually is a sufficiently realistic range if held for a long period.

However, you must not misunderstand:

It does not increase by 6% every year.

There are years when it goes up 20%, and years when it goes down 20%.

There are market crashes.

There are times when you will have unrealized losses.

Even so, it is a matter of settling at an average of around 6% when viewed over a long period of 15 or 20 years.

Mortgage interest rate is 1%.

Expected investment return is 6%.

Looking simply at the numbers, I think prioritizing investment over early repayment is a perfectly valid way of thinking.

However, this is just about the numbers.

Some people find the mere existence of debt to be stressful.

Some people feel anxious every time they look at their loan balance.

In such cases, I think choosing early repayment is also the right answer.

Money issues are not just about numbers.

Mental peace of mind is also important.

✅ Education expenses are decided by "when you will use them"

I think about education expenses more simply.

There is only one point.

When will you use that money?

That is all.

For example, what if the child is 1 year old?

There are more than 17 years until they enter university.

If you have 15 years, there is a good chance it will recover even if a crash occurs.
Besides, you don't need the full amount 17 years from now.
It is money that will be spent over a total of 4 years.

So I think the option of long-term investment is valid.

On the other hand, if the child is in high school, it is a different story.

There are only a few years left until university.

It would be a problem if a crash happened at such a time.

It is meaningless if the money has decreased when you need it.

So I think about it with this image in mind:

If there are 15+ years until education expenses are needed:

I think focusing on investment is fine.

You can use time to your advantage over the long term.

If there are around 10 years until education expenses are needed:

Split it about half and half between cash and investment.

Balance safety and growth.

If there are less than 5 years until education expenses are needed:

Basically, use cash.

Prioritize protecting it over growing it.

Of course, the way of thinking differs by family.

But unlike retirement funds, the time to use education expenses is fixed.

That is precisely whyI want to prioritize "being able to use it for sure" over "growing it."

✅ How our family thinks about preparing money

Our family hasn't perfected this either.

In fact, I still worry about it.

My eldest daughter has entered vocational school.

We have entered the period where education expenses are actually needed.

So I prioritize cash for money that will be needed in the short term.

On the other hand, there is still time for my eldest son and second daughter.

Especially for the youngest, there are more than 15 years until university.

So I also utilize investment for money that won't be used for a long time.

What I think after 19 years of parenting is that

life does not go according to plan.

Career paths change.

Hobbies and lessons change.

There are unexpected expenses.

It is normal for things to happen that are different from the future the parents envisioned.

So it is scary to put everything into investment.

Conversely, it is a waste to keep everything in cash.

In the end, I feel most comfortable having both.

The peace of mind of having cash.

The potential for investment to grow.

Not one or the other, but having both.

That is my answer for now.

✅ Summary

Should I pay off the mortgage early?

Should I prepare for education expenses with savings?

Should I invest in the new NISA?

When looking at social media, it feels like there is a correct answer.

But in reality, it is different.

The children's ages are different.

Income is different.

Mortgage balances are different.

Household situations are different.

So someone else's correct answer is not necessarily the correct answer for your family.

What I think is important is:

* Check your mortgage interest rate
* Understand when education expenses will be needed
* Continue investing within a reasonable range
* Secure emergency funds

These four things.

There is no need to look for a perfect answer.

You can just prepare little by little.

What I feel after 19 years of parenting is that while money worries never disappear, they definitely get smaller once you start preparing.

No one knows the future.

That is precisely why I think you should move forward one step at a time using a method that suits your own family.

Thank you for reading until the end.
If you liked it, please give it a like and follow me, as it will encourage me in the future.