We have been consumer debt free for a couple of months now. So today I thought I would share what consumer debt free means to us.
Being consumer debt free is a big thing as it opens up so many more doors once you are finally there. For us being consumer debt free meant we had finally paid off about $30,000 in credit card debt (all mine pre meeting my husband) and then $25,000 in a car loan. You can read more about that here.
For us our consumer debt total did NOT count my HECS debt. (In Australia the Government lend you money to complete your tertiary education. This is a loan that does NOT accrue interest and comes automatically from your wage.) If you are a Barefoot Investor follower you would know that Scott Pape thinks its the best loan you will ever receive – thanks to the no interest. (It does go up or down with the CPI). So while I am happy to pay the compulsory payments it isn’t our priority to pay it off sooner. I should also mention that this debt is all mine. My husband has paid his off.
This obviously leaves our mortgage as our only debt. Which means this year we have been lucky enough to spend money on doing renovations to our bathrooms and laundry. (This is currently still being complete.) And focus on paying off mortgage.
It also changes how we can live – slightly more relaxed. But still with the big goal of being completely debt free we haven’t gone crazy. We have done improvements to the house to add to our investment, and we have taken a couple of local holidays. While we would both love to go overseas at the moment the house is our priority.
Being consumer debt free hasn’t changed our lives. We still have our largest debt to pay being our mortgage. However all the extra payments we were making now goes into bettering the house or paying off the house. So worth the hassle of paying off our consumer debt as quickly as possible.
Being consumer debt free has changed the way I look at debt! I don’t want to ever borrow money again that is NOT for our house. And even then I am keen to pay that down as soon as possible. It’s been a long road and we have made sacrifices along the way (read more here.)– but we got ourselves into debt (mainly me) so we had to make sacrifices to get our of debt.