How much debt have you paid off?: $21,154
What was it for?: $10,138 was consumer debt: iPhone 12, Q Card (for travel and renovation stuff ), Gem credit card (spa pool), MasterCard (monthly balance). All consumer cards were interest-free terms. $11,016 was part of a mortgage.
From deciding to become debt free to making the last payment, how long did it take you?: Four months from July to October.
What age did you take on your first debt, and how old are you now?: 17 years old. I’m 59 now.
Did you do it alone or as a family?: With my Wife.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: Regular income and some savings.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: Did one Market Boot sale (car boot sale). Some of the savings used was part of a previous cash gift.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Some family in Oz had looked into “The Barefoot Investor”, and we read it and decided to try it. Had looked at Sorted.org and MoneyHub.co.nz which had the article “applying the Barefoot Investor in NZ”. *Ruth here: I have also written a blog post about this. Here is a link to it Applying The Barefoot Investor in NZ.
Did you keep an emergency fund while you paid off debt? If so, how much?: Yes, about $10,000
Did you have any setbacks along the way, and how did you overcome them?: Had always felt we should have a money buffer, so running down part of that to pay consumer debt took some thinking about. Coming to learn and understand some of the thinking behind consumerism allowed us to see the benefit of killing off the debt.
What tips/hacks could you share?: Enjoyed the simple steps outlined in Barefoot. I’ve only browsed older finance/wealth books before, and they seemed more idealistic (airy fairy!) YouTube has everything, and of course, have been really enjoying “The Happy Saver” podcast, which was recommended by my daughter-in-law in Oz.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: We followed Barefoot and paid the smallest to largest debt so you can feel the accomplishment early.
How did you stay motivated, and what was the most challenging part of paying off your debt?: We’ve been worried about this time of our life as we near retirement, and learning we could make a difference by taking some action helped. Getting our heads around paying debt instead of having a buffer was a challenge. We’ve always used consumer credit cards for buying travel and tech and felt we were in a good position having this credit available! ($10,000 limit on each Q, Gem and Master Cards).
How did you celebrate making your final payment?: When we made the last payment on the Gem Spa pool, we had a bubble that night.
Was getting out of debt worth it, and what have you learned about yourself?: Yes, good feeling not to have to shuffle future payments around, so we got everything paid within the interest-free terms. I’ve always been the perfect consumer/spender; my wife is very cautious with money. I’ve found a new financial awareness, and after learning, you don’t need one to two million in the bank to retire, I feel less anxious about our future.
Will you ever go back into debt again?: I don’t think we will have consumer debt again. We have to tackle mortgages now and have decided not to borrow again once paid off.