How much debt have you paid off?: Around $450,000 - $500,000
What was it for?: Mortgage, renovations and improvements. Earthquake repairs and a car or so.
From deciding to become debt free to making the last payment, how long did it take you?: Three years
What age did you take on your first debt, and how old are you now?: 18 years old and I am 44 now. First debt was credit card - it was just ‘what you did’ growing up. I still have one but pay as I use it.
Did you do it alone or as a family?: Family
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: Mostly regular income, but we took on extra work regularly. Any money gifts were put towards the debt for the last few years.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: Usually get cash as a Christmas present from parents always went towards debt. Stopped buying coffee out when I realised the interest we paid was a coffee a day!
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Read The Barefoot Investor to get our bank accounts set up. Then found The Happy Saver for NZ info. Frances Cook, Mary Holm, and now listening to investing podcasts.
Did you keep an emergency fund while you paid off debt? If so, how much?: We saved and paid off debt at the same time, anytime the savings got up we’d make a lump sum payment. While interest was cheap we paid the flexi part of our mortgage off but kept the balance available in case of emergency.
Did you have any setbacks along the way, and how did you overcome them?: Not setbacks as such, but we did redraw on the mortgage several times to move, renovate etc, before we were focused on clearing the debt completely.
What tips/hacks could you share?: Work out how much the debt is costing you each week, when I realised that, plus the debt was money we’d already spent, it kept me focused on paying it down.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: Only had the mortgage so just worked at clearing it with any surplus money at the end of a pay cycle.
How did you stay motivated, and what was the most challenging part of paying off your debt?: Had a graphic I coloured in every $5,000. Calculated how much we were saving in interest each month by paying extra off. Kept the debt free date in sight and updated it as we made lump sum payments.
How did you celebrate making your final payment?: Went out for tea, did have a couple of relaxed spending months over Christmas before getting back into saving to invest. We bet our stretch goal of paying it off before turning 50 so that will be a big celebration.
Was getting out of debt worth it, and what have you learned about yourself?: Definitely worth it, especially in the current financial environment!
Will you ever go back into debt again?: Nope!