How much debt have you paid off?: Hard to say exactly, but I had a lot of debt between the age of 17 to 44. Somewhere between $500,000 and $600,000.
What was it for?: Mostly mortgage debt but also student loans, car loans, hire purchases etc.
From deciding to become debt free to making the last payment, how long did it take you?: In 2018, we began saving for a world trip at a cost of $120,000 or so. It took about 18 very frugal months. We wanted to step off the treadmill and enjoy a year off with our children travelling on a budget and enjoying experiences over "stuff". We set off in Jan 2020, and then covid turned us back home in March. Gutted! We still had a $400,000 mortgage but no other debt. We decided to sell our beautiful home. It sold for $1,100,000 and downgraded a little to an $820,000 home, reducing the mortgage to around $100,000. The remainder was offset against our trip savings, meaning we paid no interest, only principal, but ultimately we decided to clear it and get the psychological win of being debt free.
What age did you take on your first debt, and how old are you now?: First debt around 17 years old. I was debt free by the age of 46.
Did you do it alone or as a family?: As a family.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: Using regular income and using the equity in a home to downgrade and clear the debt. We had always been aggressive with mortgage payments and never paid the minimum.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: Apart from the home, no.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: I read a book called Hammer That Mortgage by David Tillman sometime in my 30s. This is probably what started my quest to be better with money. The Barefoot Investor book by Scott Pape shaped the way my wife and I run our household budget and we used it as a guide for teaching our kids about money. JL Collins and his book The Simple Path to Wealth changed my life like no other book. I wish I'd read that when I was 18. I listen to your podcast, of course. Also, Choose FI and Mad Fientist. We will start using Pocketsmith in 2023 (waiting for a possible black Friday discount, lol).*Just use my affiliate link; it gives you 50% off the first two months!
Did you keep an emergency fund while you paid off debt? If so, how much?: A small one. We are currently working towards building that up to somewhere between 3 and 6 months of earnings.
Did you have any setbacks along the way, and how did you overcome them?: Mainly emotional ones. Changing from an award-winning dream home that we designed from the ground up to a home of 'lesser perfection' was/is tough. But nothing is better than being debt free!
What tips/hacks could you share?: I ask my kids to recite the three rules of money every now and then, and I'm proud to say they know it inside and out:
Spend less than you earn
Invest the surplus
Avoid debt
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: No. It was all mortgage debt, and we already had it offset against our savings. We moved to Kiwibank, especially for this mortgage type.
How did you stay motivated, and what was the most challenging part of paying off your debt?: The book The Simple Path To Wealth. We were excited to pump as much money as possible into index funds and reach FI and retire as early as possible. Not having debt means we invest around 60% of our earnings. We are on target to achieve our version of FI by 2030 but will likely reduce hours at work long before this.
How did you celebrate making your final payment?: We went out for dinner. We completely closed the mortgage facility. At the same time, we got rid of our credit cards and just have debit cards now. We never paid interest on a credit card, ever, BUT it felt good not to have any debt or chance of it. We do not owe a single cent to anyone.
Was getting out of debt worth it, and what have you learned about yourself?: Absolutely worth it. We have learned that stuff is just stuff and most of it really isn't important. Freedom to make choices with your life, how much or what type of work you do etc. Time with friends and family is so much more important than having stuff. Especially if having the stuff means being in debt.
Will you ever go back into debt again?: Hell No! But. Maybe for a business idea. An Air BnB on our section, if and only if the business profits paid the mortgage debt.