Cost of living: Instagram influencer shares tips for paying off debts
Faced with debts of over $ 50,000, a 29-year-old Brisbane woman now has almost enough savings for a house deposit.
In the age of buy it now, pay late, payday loans and easy credit, the number of Australians drowning in debt is on the rise.
Personal debt skyrocketed to nearly $ 3 billion last year and, according to Reserve Bank of Australia payment data, $ 205 million in new debt was added to credit card balances 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 have made a name for herself in this thriving online community is a Brisbane-based mother of two who has paid off $ 60,000 in debt, created an emergency fund and saved most of a house deposit in four years. All with an income of less than $ 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 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 Brisbanites to take over the couple’s finances in an effort to pay off everything they owed, including utility bills, personal loans, phone bills and car accident debt.
“We scrimped and saved and threw every extra dollar we could on debt. Pay them off and shoot them one at a time. We made so many random $ 5 payments just to keep 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 that if we want to do something, we have to like 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 with a modest combined income of $ 20,000, the couple slowly increased their earnings each year before finally ending up with $ 50,000.
“We have worked hard. In between jobs, my partner did landscaping and was a handyman while I cleaned and refurbished furniture, flipping items for sale 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 up an emergency fund in conjunction with conquering their debt because “he There’s no point in paying down debt if the next emergency is just happening. 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, his cash reserves were depleted by appointments with specialists, medication, hospital parking, sick leave. caregivers 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, things are going to happen 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 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, don’t hide it. List the debts you have, the interest rates and fees that go with it, 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 that they can secure a mortgage, a debt that Emily believes is “a part of life,” she is 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 thrifty. At the end of the day, we don’t want to work indefinitely, so we have to stick to a budget as much as possible.