How much debt have you paid off?: $300,000
What was it for?: House renovations
From deciding to become debt free to making the last payment, how long did it take you?: Just under six years. We were given a 25 year loan and paid more than the minimum as well as making lump sum payments.
What age did you take on your first debt, and how old are you now?: Borrowed about $500 using student loan scheme at age 20 and spent it on a party! Paid it back pretty quick when I started working full time at age 21. Borrowed money from Mum twice to buy cars in my 20's and paid her back interest free. First mortgage at age 28, changed homes twice taking on additional debt. Current house started with a very low mortgage (about $30,000) and then borrowed the $300,000 to do renovations, which was the largest loan I ever had. Now age 48.
Did you do it alone or as a family?: Mortgage debt was joint with my husband.
Did you pay off debt from your regular income, take on extra work, or change jobs to speed it up?: From regular income although end of year bonuses helped with lump sum payments.
Did you sell anything or receive cash gifts to contribute towards your debt payoff?: We were given a significant cash gift in 2021 and used approx $50,000 of this for mortgage debt reduction.
What people, books, websites, podcasts, budgeting tools, debt trackers and resources helped you?: Mostly just used excel spreadsheets which I use to track all my finances.
Did you keep an emergency fund while you paid off debt? If so, how much?: Not initially, started an emergency fund about a year ago.
Did you have any setbacks along the way, and how did you overcome them?: Not really.
What tips/hacks could you share?: Paying more than the minimum/making lump sum payments to make the loan term shorter. For me, seeing the final repayment date come closer each time I did this was satisfying.
Was there a structure to your debt payoff? i.e. paying smallest to largest, or highest interest rate to lowest?: It was just one loan so just paid as much as possible each time I got paid while still having a life. In the last six months I did become particularly frugal as I saw the loan balance getting so small and made a pact with myself to pay if off by Christmas.
How did you stay motivated, and what was the most challenging part of paying off your debt?: Tracking my finances helps keep me motivated. Most challenging part of paying extra is the opportunity cost i.e. not buying something I want (but don't need). We said no to an extended family holiday in Rarotonga to celebrate a relative's birthday.
How did you celebrate making your final payment?: It was Christmas Eve so I guess I celebrated by enjoying some time off work. I have since eased up a bit on the frugality.
Was getting out of debt worth it, and what have you learned about yourself?: Absolutely worth it because now I have lots of spare cash to invest for the future. I am determined to become financially independent well before 65. I want a long retirement.
Will you ever go back into debt again?: No plans to!