How much debt have you paid off?: $1,500. I know it’s not much compared to the others here, but it was hanging over my head on a single income. I thought even though it’s smaller than most, it might inspire some to forge ahead with paying off their debt too.
*Ruth here. Now before you read on any further, you need to know that this person and I have been emailing for a long time. They have come an incredibly long way with many challenges but have changed their mindset and decided to get out of debt. The first step was to decide to stop taking any more on and to cash flow all expenses, a huge undertaking. Paying off $1,500 is part of a bigger picture of financial challenges and I literally shed a tear when I knew she had achieved her goal. She is a FABULOUS wahine and I love seeing the confidence she has in herself growing.
What was it for?: Credit card.
From deciding to become debt free to making the last payment, how long did it take you?: About 12 months.
What age did you take on your first debt, and how old are you now?: I took on my first debt at the ripe old age of 18 - an HP. I’m now 55.
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?: Regular income
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: I sold shares that I'd bought in an employee buy in scheme. I made some money on the shares and this enabled me to pay off the credit card fully and then start my emergency fund.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: I read The Barefoot Investor book a few years ago and that inspired me but really it was Ruth, The Happy Saver, that made me realise that I COULD get ahead, pay debt off and with work to become Financially Independent.
Did you keep an emergency fund while you paid off debt? If so, how much?: Kind of. It dwindled to a couple of hundred dollars - then a sick dog and a few other nasties annihilated it!
Did you have any setbacks along the way, and how did you overcome them?: Yes! As above, dog sickness then having to be euthanised/cremated, family illnesses and just random things like my phone dying and needing to be replaced. I just refused to let it get me down. I focussed on the long goal of getting out of debt and having an emergency fund and just kept plodding and believing that I would get there if I kept going.
What tips/hacks could you share?: Just believe in yourself and that you can do it. Read everything you can about getting out of debt and building your future wealth. I will NEVER be a millionaire but I know that I am working to secure myself financially and it feels good knowing that I am. Especially as a single person. Just soak up all the info you can and find support from like minded people.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: I just had the credit card and put what I could on it to chip away at it until I was able to sell my shares.
How did you stay motivated, and what was the most challenging part of paying off your debt?: I just kept reading blogs etc. Anything that would inspire me to believe I could do it too. A low income was my biggest challenge!
How did you celebrate making your final payment?: I bought a new lawn mower with cash :D
Was getting out of debt worth it, and what have you learned about yourself?: YES!! So worth it. I’ve learned that I can be more disciplined with money that I thought I was. I’ve learned that I don’t have to keep buying 'stuff' to make myself happy. I'm far happier having no debt and an emergency fund. I've also learned that I like the challenge of doing better for myself financially in the future.
Will you ever go back into debt again?: The only thing I'd ever go into debt for again would be a house/mortgage. But consumer debt… no way!