Wednesday, March 6, 2013

Debt free...When did we get here?

It just crept up on me and I didn't see it coming. As of May this year, I am 100% personal debt free. All we have left is our investment property mortgage which is positively geared.

We have been crying 'poor' for so many years now, and plucking away at the debt in our lives that this is actually a bit of a shock. No credit card balance. No personal loan. No car loan.


And it comes at the most perfect time. As of June I am no longer on any form of paid maternity leave and we are officially on one income. Being debt free is a huge part of being on one income for as log as possible so that I can continue to focus on my health and give the babies as much time at home with me as possible.

13 years ago we had $30,000 in personal debt with nothing to show for it. This amount has gone up and down over the years as we made headway but then reborrowed money to deal with expenses such as cars, holidays, broken down appliances etc. I am so proud to think that our personal spending habits have changed so much that we find ourselves in a place with no debt, no immediate need to enter into debt (both cars run beautifully knock wood) and a reasonable safety net in savings for any unexpected expenses.

It taken a huge mindset change from both husband and I. We had to learn to stop spending everything that was left each pay and start saving. We had to learn to stop buying big ticket items as soon as the urge struck us and think about whether we actually needed things or not, and whether we could make do without them until they could be saved for. And mostly we had to learn to reduce our wastage of everything in our lives. Over consumption of food (we used to throw out so much), clothing (especially for the kids) and toys were big ones for us. I know we spend thousands less per year across these areas now than we did 10 years ago even though now we earn more and have x3 kids instead of 1!

So I will spend the next 6-9 months enjoying the fruits of our hard lessons, which is the ability to stay off work for a bit with my bubbas. And then when I go back to work and our disposable income increases again I think we will see a financial planner first so that we can make the most of our new position and not fall back into old bad habits. It would be nice to see us starting to make some serious headway into a comfortable retirement.

Clink clink.


 I am feeling pretty chuffed at the moment. Lets see if I can resist the urge to go out and spend the contents of our bank account in celebration of our new financial position.

4 comments:

  1. Thank you! It's an exciting place to be...now I just want to make something of it

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  2. Congratulations, Elise! It’s true that some lessons have to be learned the hard way, and sometimes, it’s the best way we learn. It’s good for you to mull over getting a financial planner. If you can’t manage your spending, it may be better have someone (preferably a pro) do it for you. Cheers!

    Jaden Allred

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  3. It’s a relief in your part that you’re now debt-free. Congratulations to you, Elise. I know that you’ve gone through tough times, but you know that’s life. You just have to face whatever hardships you may encounter. If you’re strong enough to deal with these kinds of problems, you’ll be able to surpass them. Think positive! :)

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