How much debt have you paid off?: $320,000
What was it for?: Mortgage
From deciding to become debt free to making the last payment, how long did it take you?: Becoming debt free was always a massive goal. I don't have any other debt at all, no credit card, no personal loans nothing so it was just the mortgage. Home security is very important to me and I did not like having landlords coming and going, and having the power to make decisions on my living situation. So, I approached a mortgage like it was compulsory savings. Being forced to pay something like that regularly made me more disciplined.
What age did you take on your first debt, and how old are you now?: 25 when I bought my first home. A tiny 2 bedroom joined flat. I loved it (although not so much when gang members moved in next door briefly). Now I am 53 and have a new, but modest 2 bedroom house that I share with my partner. It sits on 2 acres of land.
Did you do it alone or as a family?: I started alone and then when I met my partner 10 years ago it became a common goal.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: From my regular income and from some capital gain on another adjoining section of land that I purchased about 8 years ago.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: My grandad started me on my home ownership journey with his family trust. I gained $20,000 when I turned 25 and I used that to purchase my flat. When I left the job I was doing a few years later I used some of my superannuation (sorry Ruth!) to pay down that mortgage. Much later in the piece I sold a house for considerably more than I had paid for it and then bought my grandparents old home from the estate. It was in a bad state and we renovated it. I was mortgage free from that but circumstances led to needing another mortgage a while afterward. Ironically Grandad wasn't too keen on me buying a property when I did but each one I lived in gave me capital gain toward the next one. I could just see that the longer I left home ownership the harder it would get to start.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Ruth. The Barefoot Investor. A work colleague. Facebook groups. All of these gave me knowledge and helped me make decisions.
Did you keep an emergency fund while you paid off debt? If so, how much?: Yes I managed to get a $10,000 emergency fund going most of the time. Currently I am paying it up again after some nasty vet bills caused by my biggest financial drain :)
Did you have any setbacks along the way, and how did you overcome them?: Not really. It was just a constant grind to keep at it. My mortgage payments were always my highest priority.
What tips/hacks could you share?: Take every opportunity to upskill so you can apply for better paying jobs. Start investing as early as possible. My grandad was a very frugal man and very smart. He knew about the share market and I didn't take the opportunity when he was alive to learn from him. I wasted 25 years that I could have been investing and growing my money, before I started. I probably could have retired before now. Worse still, he had actually started that for me and I used it all for my first house without looking to ways I could build that investment back up again. I also joined KiwiSaver at the lowest possible rate to get the government contribution. I already have super through work and I increased the payments on that, and changed it to a growth fund after reading the Barefoot Investor and realising I had mine sitting in the default balanced scheme for years - and it had barely moved. The KiwiSaver won't be huge but if I make it to retirement it will still be welcome. I also read The Simple Path to Wealth, and The Millionaire Next Door. My grandad was the living example of the people in that book. I also started investing in an index fund after reading the Simple Path to Wealth and when I signed up for Ruth's emails.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: I only ever had a mortgage and I just paid as much off it as I could, always more than I had to.
How did you stay motivated, and what was the most challenging part of paying off your debt?: I stayed motivated because I wanted the freedom to quit work if I needed to. The most challenging part is how long it takes and how slowly it starts off. I'm more of an instant gratification type so it was hard for me seeing the interest coming out every fortnight. Likely this is the same for most people.
How did you celebrate making your final payment?: My partner and I went out for dinner. We are looking forward to seeing all our excess money next payday. I can't wait to build up my emergency fund and then rebuild some of my investments that I chose to use for the last of the mortgage.
Was getting out of debt worth it, and what have you learned about yourself?: I feel like I have won lotto paying off that mortgage. I don't even care that it was only that amount of money and I can't yet "retire". I am just so happy that the debt is gone and my lovely home is all mine. I am so excited to put that excess money to good use to grow for me.
Will you ever go back into debt again?: Never. I actually didn't have too many wants in life. I am happy with my small mortgage free house with my partner and pets, living in a small town with a reasonably responsible job. I did a bit of travelling when I was younger and we will do some more over the next few years but we won't be going crazy. Hopefully my horse won't provide too many more vet bills but at least now I am in an even better position to pay them (within reason).