How much debt have you paid off?: $285,000
What was it for?: House
From deciding to become debt free to making the last payment, how long did it take you?: 13 years from start to finish with a slow start, aka ‘25-year’ payments, for several years.
What age did you take on your first debt, and how old are you now?: I was 29 or 30 when I bought my first property with my then-husband. I had $70,000 from the sale of it after the divorce. I put the whole amount into the next property deposit.
Did you do it alone or as a family?: Me and my partner
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: Regular income.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: Nope!
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Mortgage amortisation calculators are so cool.
Did you keep an emergency fund while you paid off debt? If so, how much?: Nope; living on the edge. We often had a few thousand in savings, up to $170,000 at one point, but rather than spend on renovations, we paid down the mortgage.
Did you have any setbacks along the way, and how did you overcome them?: No setbacks.
What tips/hacks could you share?: Save for everything you want. We put nothing extra on the mortgage. We saved up over the years ($70,000) for bathroom refits x2, painting interior bedrooms, a new roof and landscaping, and a further $15k for our car. Take second-hand phones off your whānau, and limit $ on technology like iPads and TVs. Play with resources and tools (loan amortisation calculator) to educate yourself on how that little bit more has such a big impact. Get motivation from books on finance and others who have the same outlook. I have to check myself to remind me of what’s really important in life, we have fun and go away and do concerts but budget style! Communication with your partner and having the same goal is important. Always ask for a better rate when refixing. We didn’t sell and buy a new, bigger and more expensive house even though we dreamed of it.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: Reduce term in years as you go. Nothing fixed beyond 2 years. Increase repayments in line with the max you can afford. Round it up. We had split mortgage accounts, small and bigger, which fixed alternating years. So, reviewing regularly.
How did you stay motivated, and what was the most challenging part of paying off your debt?: Playing around with calculating diminishing debt and dreaming of the day with no mortgage. The challenge is wondering if you should be spending on material things and holidays and hoping you’re not gonna die before you can enjoy yourself!
How did you celebrate making your final payment?: It's the final payment in May, and there’ll be Champagne and a fancy dinner out for us.
Was getting out of debt worth it, and what have you learned about yourself?: Yes, I am getting so excited—I have a loan advent calendar. Six to go!!! I’m so excited to start investing instead. I have learnt that I’m conservative and careful. I can spend for sure, but I don’t value fancy brands. I’m good at saving. I have had $ goals and reached them. I wish I’d started squirrelling away $ earlier in investing, though.
Will you ever go back into debt again?: We’re considering a new kitchen and flooring but will save up first before thinking about more mortgage debt. We're also trying really hard not to get a new house! And we want a swim spa! It's time to enjoy ourselves. So maybe a small amount….
It’s Ruth here. Nooooo, please don’t consider debt again after all your mahi. I know you will find that without having to make a mortgage payment, you will be able to save up for things you want far faster. And don’t forget that you were excited to begin investing too…