How much debt have you paid off?: $173,000
What was it for?: Mortgage, credit card, dentist bills, and money owed to the IRD.
From deciding to become debt free to making the last payment, how long did it take you?: 5.5 years.
What age did you take on your first debt, and how old are you now?: Probably around 18, I’m now 52. It took from age 44.5 to 50 to pay off the $173,000.
Did you do it alone or as a family?: As a family. We're on a single income, but my wife is frugal and did some small jobs on the side to help, along with making meals from scratch.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: Paid from regular income and side hustles to get rid of it as soon as possible. Every available cent was put towards getting rid of the debt mountain.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: No
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Dave Ramsey, Mary Holm, Mr. Money Mustache and various others. We made our own debt tracker in Excel.
Did you keep an emergency fund while you paid off debt? If so, how much?: Only $1,000. Would have liked to have more but anything left over and above went straight on the debt. We did have a $2,000 overdraft and $8,500 available on the credit card if required at the time and only had to utilize it once or twice but it was quickly rectified.
Did you have any setbacks along the way, and how did you overcome them?: Not having any money while we were getting out of debt. So, limited meals and no holidays. It was worth the sacrifice.
What tips/hacks could you share?: Be consistent and track it at least monthly (ideally every payday) then if you're doing it correctly, you start seeing the debt balance going down, which spurs you on to keep on going. A budget is a must.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: Highest interest rate to lowest. Essentially we got rid of the "small" higher-interest debts first and then tackled the mortgage last of all.
How did you stay motivated, and what was the most challenging part of paying off your debt?: We had a light bulb moment of always being stuck in debt with no end in sight and we literally flicked the switch one day to finally start getting rid of it. The biggest challenge involved was the length of time it took to pay it off so it was small bites of the elephant until it was finally gone. Once it was gone, we could sleep a lot easier and a weight had been lifted off our shoulders.
How did you celebrate making your final payment?: A well deserved modest meal out. Nothing fancy.
Was getting out of debt worth it, and what have you learned about yourself?: It certainly was. We learnt how to manage money better and only pay cash for things we want. We started investing for the future and realised we could actually have a comfortable retirement from originally a position of having our heads in the sand.
Will you ever go back into debt again?: Never Ever! We are now mortgage free and have built up a nest egg of $127,000 worth of investments (not including our Kiwisaver accounts). So even if any worst case scenarios happen we can cash some of that in if we need to. The money we used to pay on the mortgage now goes straight into investments to improve our position every payday until we reach lean to regular FIRE at which time we'll decide what we want to do. Realistically this will take at least 3 to 10 years of saving and investing depending on what lifestyle decisions we make.
*Ruth here. Absolutely brilliant effort. The standout to me was that light bulb moment and the decision to change. It completely changed the course of your life. And look at the balance of your investments! Keep up the amazing work.