How much debt have you paid off?: $437,000
What was it for?: Mortgage
From deciding to become debt-free to making the last payment, how long did it take you?: 8.5 years. When I started, my mortgage was about average, I believe. The average mortgage today would be around $750k.
What age did you take on your first debt, and how old are you now?: Probably got my first credit card when I was 18, now 52.
Did you do it alone or as a family?: Alone.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: From my regular income, I have worked for the same company for 16 years. I did work overtime whenever I could, to boost my income.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: No. During COVID, I did get some of my annual leave paid out as we were unable to travel anywhere. I used these lump sums to pay off capital from the mortgage. These were early on in the journey, but I believe they took years off the mortgage in the long run. Any lump sums (especially in the early stages) that you can pay off the mortgage will pay dividends further down the track.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Dave Ramsey, Scott Pape, Noel Whittaker, the Chens and of course, Ruth The Happy Saver! I also tracked my progress in a spreadsheet; it becomes very addictive watching your progress.
Did you keep an emergency fund while you paid off debt? If so, how much?: Yes, $15k.
Did you have any setbacks along the way, and how did you overcome them?: There wasn't anything too major; the hardest thing is probably staying the course and not becoming distracted by all the noise in the wider world. By this I mean there are a lot of people out there trying to get you into further debt under the guise of building wealth, i.e. banks, real estate agents, mortgage brokers, the Joneses. They are all to be ignored. In the early stages, I would talk to friends about it, and I think they thought I was crazy. I am careful now when talking with others about their finances, as it can be an emotive topic.
What tips/hacks could you share?: A visual display of your progress can be very handy. Ring the bank up regularly and ask for a rate decrease on your home loan. Change to a variable rate mortgage, as you can make unlimited payments without any fees. Ignore gimmicks like offset accounts, revolving credit, etc. The only way to get rid of it as quickly as you can is to direct as much of your spare cash to decrease the debt. If you have a credit card, then destroy it ASAP, they're evil. My partner was a huge help to me as well. Being able to discuss your progress with someone who shares the same anti-debt outlook was very beneficial.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: I tried to pay myself a basic wage, and the excess I directed towards my mortgage. Any pay rises along the way should be used to increase your repayments and not absorbed. It takes a bit of tweaking along the way. I know not everyone is in a position where they have an excess amount to put towards debt, but any amount that can be used is never in vain.
How did you stay motivated, and what was the most challenging part of paying off your debt?: I think I got to the point where I felt like I was owned by the bank, and I hated it. I wanted my freedom back. I think for a lot of people, trying to keep up with the Joneses can be a big challenge. For me, being free from the bank seemed to be a lot more desirable than whatever other people thought. The biggest challenge was probably unexpected costs, e.g. having to come up with the money to pay for kids' braces.
How did you celebrate making your final payment?: Making the final payment was an interesting experience. I went to a bank branch in person, and it took them an hour to sort out the paperwork. All I got from the bank was a tiny paper receipt, which I have now framed at home. My partner and I went out for dinner. We started out at a flash restaurant but ended up at our favourite Chinese takeaway, which seemed fitting somehow.
Was getting out of debt worth it, and what have you learned about yourself?: It only happened two weeks ago, and it hasn't really sunk in yet. I'm still in a bit of shock, although it's been a long time coming. But when I hear the words 'financial stress' now in the media, it seems like a distant (bad) dream to me. I haven't worried about money for years. The most important lesson is the knowledge that you gain. Getting into debt is easy, but getting out of it is very difficult.
Will you ever go back into debt again?: No chance. I'm off the wheel now, and I could go part-time at work if I chose to. For a single dad paying child support, this is unheard of, so many people out there are in debt up to their eyeballs.