With more than $ 50,000 in debt, a 29-year-old Brisbane woman has now saved nearly enough on a home bail.
In an era of buy-now-pay-later, payday loans, and easy credit, the number of Australians drowning in debt is increasing.
Personal debt rose to nearly $ 3 billion last year, and according to payment data from the Reserve Bank of Australia, $ 205 million in new debt was added to credit card balances in December alone.
But a group of money-loving Australians are turning their backs on debt and using social media to share their financial success stories and inspire others to reduce debt.
One of those who made a name for themselves in this thriving online community is a Brisbane mother of two who has paid off $ 60,000 in debt, built an emergency fund, and saved most of a home security deposit in four years. Anything with an income of less than $ 50,000.
FACE THE PROBLEM
The 29-year-old influencer – or “fin influencer” – who is known on Instagram and YouTube under the name @aussiedebtfreegirl, began her debt-free mission when she was expecting her second child.
“I’ve always hated debt and was a big advocate of frugality,” she said. “My partner and I met in December 2015, we had a baby on the way and tried to start a life together.
“We had a conversation about what we both wanted in life and how we could never achieve it while we carried all this debt.”
The conversation motivated the Brisbane to take over the couple’s finances with the aim of paying off everything they owed, including utility bills, personal loans, phone bills, and car accident debts.
“We’ve saved and saved, and tossed every extra dollar we could on debt. Pay them and knock them down one by one. We made so many random $ 5 payments to save on. ”
Not only does she take on extra work, but she cuts household bills by keeping an eye out for everything from checking utility companies every few months to taking advantage of loyalty and reward programs.
The mother of two also used the money management app WeMoney, which helped her see all of her bills in one place so she could work out a monthly budget and goals from there.
Even though the couple skimpy, they still managed to have fun, despite always making sure it was cheap.
Date nights consisted of discounted sushi where each plate was less than $ 4, a romantic stroll and cuddle on the couch while the family fun consisted of grabbing take-out and picnicking in the park and playing with the kids, who are now four years old and seven.
“Some of our favorite things to do cost next to nothing. Our only rule is: if we want to do something, we have to love it. “
SHOPPING AROUND AND SIDE-HUSTLING HARD
In addition to focusing on paying off their debts, the couple found new ways to increase their income. Starting from a modest total income of $ 20,000, the couple slowly increased their earnings each year before eventually ending up at $ 50,000.
“We were very wrong. In between my partner worked in landscaping and was a handyman while I cleaned and renovated furniture and turned objects to sell online. “
“If we hadn’t had a few emergencies, I would have paid off the debt sooner,” she says. “It took me four years because of a low single income and life, job loss, and emergencies that arose during our trip.”
These crises, namely her partner’s car, which is essential to his job as a handyman, inspired her to focus on building an emergency fund to defeat her debts because “there is no point in paying off debts when the next emergency is just coming “to undo all this hard work.”
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A URGENTLY NEEDED EMERGENCY FUND
After being out of debt and with an emergency fund, Emily focused on saving up for a home deposit and had a portion of it saved when another emergency occurred. Her son fell ill, and in the months it took him to make a diagnosis, her cash reserves were used up by specialist appointments, medication, hospital parking, care leave, and childcare for her daughter.
However, it remains philosophical. “I’m not going to lie, I was disappointed when I saw those five numbers go down to zero, but this is real life, this is personal finances, things are going to happen that you have to spend money on,” she says .
“You will not always achieve these big, bold goals, you must not be too rigid or upset, life happens. I just sit back and think, ‘I can do it again’. “
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FIND FINANCIAL FREEDOM
Emily believes that anyone, no matter how large, can pay off their debts if they are just willing to face it head on.
“If you are in debt, don’t hide from it. List what debts you have, what the interest and fees are, then pick just one that you focus on and smash it, ”she advises.
“I recommend starting with the smallest one because not only does it prove you can, but you can carry over that minimum payment to the next debt and it just snows from there.”
Now, back to focusing on that house deposit so they can take out a mortgage, a debt that Emily thinks is “part of life,” she is more concerned than ever to be frugal.
“For us it’s a lifestyle choice, even if we had more money I would still be thrifty. Ultimately, we don’t want to work forever, so we have to stick to our budget as best we can. “
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Originally published as Young mother of two reveals how she paid off $ 60,000 in debt, $ 5 at a time