New mom reveals how she paid off $ 60,000 in debt, $ 5 at a time
Emily’s name is @aussiedebtfreegirl on Instagram and YouTube. Photo / via Instagram
In the era of buy it now, pay late, payday loans and easy credit, the number of people drowning in debt in Australia, like New Zealand, is on the rise.
Personal debt skyrocketed to nearly A $ 3 billion last year in Australia and, according to payments data from the Reserve Bank of Australia, A $ 205 million in new debt was added to bank balances. credit cards just in December.
But a group of money-savvy Australians are turning their backs on debt and using social media to share their financial successes and inspire others to write off their debts.
One of those who made a name for herself in this thriving online community is a Brisbane-based mother of two who paid off A $ 60,000 in debt, created an emergency fund and saved most of the money. a house deposit in four years. All with an income of less than A $ 50,000.
FACING THE PROBLEM
The 29-year-old influencer – or “fin-fluencer” – who goes by the handle @aussiedebtfreegirl on Instagram and YouTube began her mission to free herself from debt as she was expecting her second child.
“I have always hated debt and have always been a strong believer in frugality,” she shares. “My partner and I met in December 2015, we had a baby on the way and we were trying to start a life together.
“We had a conversation about what we both wanted in life and how we could never have it while carrying all this debt.”
The conversation motivated the Brisbane woman to take charge of the couple’s finances in an effort to pay off everything they owed, including utility bills, personal loans, phone bills and accident debt. car.
“We scrimped and saved up and threw every extra dollar we could on debt. Pay them off and take them down one at a time. We made so many random payments of A $ 5 just to bring it down.”
In addition to taking on additional chores, she cut household bills by looking for everything from reviewing energy suppliers every few months to leveraging loyalty and rewards programs.
The mother-of-two also used the WeMoney financial management app, which helped her see all of her bills in one place, so she could set a monthly budget and goals from there.
Even though the couple skimped, they still managed to have fun, although they always made sure it was cheap.
Date nights consisted of discounted sushi, where each plate cost less than $ 4, a romantic stroll and cuddles on the couch, while family fun consisted of grabbing take out and heading to the park. for a picnic and a play with the kids, now aged four and Seven.
“Some of our favorite things cost next to nothing. Our only rule is if we want to do something, we have to love it.”
SHOPPING AROUND AND HARD SIDE HUSTLING
In addition to focusing on paying down their debt, the couple found new ways to increase their income. Starting from a modest combined income of A $ 20,000, the pair slowly increased their income each year before finally ending up with A $ 50,000.
“We worked hard. Between jobs, my partner did some landscaping and was a handyman while I cleaned and refurbished furniture, returning items to sell online.
“I would have paid off the debt sooner if we hadn’t had some emergencies,” she says. “It took me four years due to low income and a single life, job losses and emergencies that occurred as we went along.”
These crises, namely the breakdown of her partner’s car – essential for her work as a trader – prompted her to focus on building an emergency fund in conjunction with the conquest of their debt, because “he There is no point in paying off debt if the next emergency is just going on. to undo all that hard work. “
A VERY NEEDED EMERGENCY FUND
Once released from her debts and provided with an emergency fund, Emily focused on saving for a house deposit and saved some of it when another emergency arose. Her son fell ill, and in the months it took for him to be diagnosed with a rare form of epilepsy, their cash reserves were depleted by specialist appointments, medication, parking. from the hospital, caregivers’ leave and childcare for her daughter.
However, she remains philosophical on this subject. “I’m not going to lie, I was upset when I saw those five digits drop to zero, but this is real life, this is personal finance, there are going to be things going on that you need to spend money on. money, ”she said.
“You’re not always going to hit those big, bold goals, you can’t be too rigid or upset about it, life is coming. I just reset and I think ‘I can do it again’.”
FIND FINANCIAL FREEDOM
Emily believes that anyone can pay off their debt, no matter how small, if they are just willing to tackle it head on.
“If you’re in debt, make no secret of it. List the debts you have, interest rates and fees, then pick one to focus on and crush it,” she advises.
“I recommend starting with the smallest because not only does that prove you can do it, but you can also carry that minimum payment over to the next debt and it snowballs from there.”
Now, back to focusing on that house deposit so they can get a mortgage, a debt that Emily thinks is “a part of life,” she’s more dedicated than ever to being thrifty.
“It’s a lifestyle choice for us, even if we had more money to come I would still be frugal. Ultimately we don’t want to work forever, so we have to stick to a budget as much as we can. . “