To be honest I still can’t believe I’m posting this… A few years ago I didn’t think I would ever be free from debt. Today, 2 days after my 28th birthday, I am now debt free for the first time in my adult life.
No personal loan
No car loan
No credit card debt
I am free…
I can’t begin to tell you how this feels. I have been in debt since I was 18. You can read more about how I originally got into debt here.
I’ll give you a bit of a run through though. For the whole of my adult life I’ve been stuck in a cycle of emotional shopping (for items I didn’t really need), paying my credit card off and then within months maxing it out again. I then took out a car loan when I was 24 for $13,500 for my first car (a 2nd hand Suzuki Swift). At 26, I desperately wanted to move out of a share house situation so I refinanced my car loan into a personal loan and borrowed more money (another $2,000) for my bond and moving costs. My interest rate doubled instantly and I got stuck back into the cycle of high monthly payments…
Exactly 1 year ago I started this journey. I had $11,489 of debt (a mix of the credit card and personal loan, both on high interest rates). I was the kind of person who always said they “couldn’t afford to save”. I often said to friends that I just didn’t earn enough to be the kind of person who had lots of savings. I was living pay to pay, spending my money before pay day
most all of the time and then using my credit card until I got paid again. It was a vicious cycle that I was never able to break…until I read “The Barefoot Investor” by Scott Pape.
During this journey I have done everything I can to pay off my debt; I’ve cut back on expenses, earned more money by side hustling my butt off, saved money and overall I’ve learnt to manage my money better. Tonight I looked at my bank accounts and honestly didn’t think they were mine. I’ve gone from debt and no savings to having zero debt and enough savings to cover an emergency. I’m also already well on my way to being able to pay my 12 month car registration when it comes up in a few months (I’ve never paid the 12 months upfront since I got the car). I’ve also already got enough money put aside for spur of the moment doctors appointments, my next yearly RACQ bill, my drivers license renewal, as well as almost enough to get my car serviced. Previously I would have stressed about these kinds of bills and been broke the pay cycle they were due as I wouldn’t have saved ahead of time.
So what’s next?
My next goal is building savings. Firstly, increasing my basic emergency fund to $2,000 and then building a savings fund for a baby of around $5,000. I want to complete both goals by the start of 2019. I’m already on track with the Emergency Fund as you can see below. I use the website and app ‘Money Brilliant’ to track my transactions and these savings goals.
In terms of longer term goals I’m hoping to start investing and contributing to superannuation. It’s exciting to think of what’s coming next…
I’d love to hear how you are going in your #debtfreejourney! Comment below.