My Journey To Being Debt Free

Like most people, I was pretty clueless with money through my early adulthood. My parents didn’t teach me much about money, and I didn’t even think about being free of debt until I ran into Canna Campbell from Sugarmamma.tv. So, here is my journey to being debt free.

My own money in teenage years

In Finland families receive something called Child Benefit from Kela, the Finnish social security institution (functions like Work and Income in New Zealand). This money is not income tested and the only requirement for receiving it is to live in Finland.

The Child Benefit is paid monthly, per child in the family until the end of the month the child turns 17.

The amount paid increases per child (for example, the current amounts are: the oldest child = 94.88 euros, next child = 104.84 euros, third = 133.79 euros, and so forth until 5th child after which additional children receive the same amount as the fifth).

As the oldest child turns 17 and their benefit ends, the siblings drop down a pay ladder.

But why am I telling this?

Well, when I was growing up, my mum and I agreed that once I turned 14 or 15 (can’t remember which!) she would forward me my Child Benefit, which at the time was 100 euros/month.

This would be for me to use as I pleased.

I believe receiving this money with no strings attached was a bit detrimental to my work ethic as I had no real need to get a job to buy things for myself.

I did try a few things, like telemarketing (selling magazines) and delivering catalogues. But I didn’t manage either for long, mainly because of anxiety.

(I mean who likes to make cold calls trying to sell magazines?? But it was ridiculous how anxious it made me to put some catalogues into people’s letterboxes.)

My early adulthood and attitude to money

After high school I wasn’t sure what I wanted to study, but I knew I wanted to go to university.

In Finland university studies are free, but they have entrance exams, with some degrees only taking in 5% of applicants. I wasn’t sure what I wanted to do and I didn’t have it in me to study for entrance exams when I wasn’t fully committed to any specific degree.

So, I ended up taking a year to study Japanese full time. This meant moving to the boarding school that offered it, which was in a small town close to the Russian boarder.

While my mum helped me financially a little bit, I also started to collect student allowance and student loan to live.

After a year of studying Japanese, I did take one entrance exam, to study Japanese further in university. While I enjoy languages I’m glad I didn’t get in! I don’t know what I would have done with that degree!

By this time in my life I started to feel quite self conscious about my lack of work experience, after all I was nearly 20.

But I had finally figured out what kind of work I wanted to do. I wanted to be a receptionist in a hotel.

I started to dream of an around the world trip including working holiday in New Zealand so I started to save for the flight tickets and accomodations.

So I found a vocational school where I could study hospitality. The main reason I wanted to go to that school was because it involved multiple internships, which meant work experience.

The school helped me get my foot in the door and I got summer jobs plus signed up with labor hire company.

Moving to New Zealand and accumulating debt

As mentioned above, I wanted to travel around the world and settled with the itinerary of California, Fiji, New Zealand, Japan, South Korea and back home, with an extended stay in New Zealand for working.

I saved some of the money for the flight tickets and initial accomodation, and received the rest as a gift.

I arrived to New Zealand in September 2014 after three weeks of traveling. A few weeks in Auckland getting my bearings and I got a job as a live-in nanny for a family in New Plymouth.

Which is how I ended up in Taranaki. I met my partner by the end of 2014 and never left.

Once I got a full time job at a restaurant I managed to start saving a good amount of money.

Initially it was to go back home to visit, and I managed to save the money for flight tickets and go in 2016.

After that I kept saving, I wanted to start studying accounting but as I wasn’t a resident yet I wasn’t eligible to receive anything through StudyLink so I was saving money for the course fees.

I managed to save another $5,000. But then in 2017 I decided I wanted to do a bodybuilding competition.

And within the year I managed to sink all that money into costs related to the competition. This was coaching, supplements, travel to see my coach and all costs on the competition day.

While an interesting experience, it was the catalyst in me getting into debt.

End of 2017 I wanted two things come 2018. Go home again and start studying.

But I had exhausted all my savings that were meant to go towards course fees. So I went to my bank and asked for a personal loan to cover those costs.

I withdrew $5,000 for my first year of university study.

Not that long after that I went back and asked for further $3,000 to cover my flight tickets, and to go to Tokyo on my way home.

Then, I decided I needed a new computer. I had wanted a MacBook Air for a while so I bought one, on credit of course and it was nearly $2,000. It was one of those 24 months interest free plans though.

So, by the start of 2018 I was nearly $10,000 in consumer debt.

Waking up and starting my journey to being debt free

Prior to end of 2017 I had never had consumer debt, just my Finnish student loan.

But in the first half of 2018 I had nearly $10,000 to pay off in consumer debt, most of it had an interest rate of 17.6% too.

My Finnish student loan became payable in 2016 (you need to start paying it off once it has been 2 years since you finished studies), which was nearly $13,000.

Suddenly I found myself in nearly $23,000 in debt!

My partner and I also kept increasing the credit limit on my GEM Visa card and ended up maxing out $4,000 with various interest free periods.

I ran into some debtfree community accounts on Instagram and looked up Canna Campbell from Sugarmamma.tv again.

Come 2019 I was pregnant with my first and ready to start my journey to being debt free!

How did my journey to being debt free go

I started my version of the $1000 Project and whenever I finished a parcel I put it towards my debt.

I had already been putting more than the minimum towards all my debts, especially my GEM Visa that had the MacBook Air ticked up on it.

I managed to pay the laptop off at the very start of 2019, with nearly 12 months left on the interest free plan.

I’m happy to say that while I had the GEM Visa card, I paid no interest once as everything was always paid off within the interest free time period.

The personal loan took a little bit longer, especially since soon after focusing on paying it off I had my first daughter, went on maternity leave and didn’t return to full time work after.

But with the help of the $1000 Project I managed to pay the loan off by the end of 2021, just over a year early.

So, while it only took a few months to accumulate my consumer debt, it took a good few years to become consumer debt free!

My current debt

While at the time of the writing I am consumer debt free, I still do have debt!

I still have my Finnish student loan, I’m nearly halfway through paying it off, as I only pay the minimum currently. At this rate, it will be gone by May 2031.

I also now have a student loan in New Zealand, which is about $30,000 and our mortgage, my share of it is about $95,000.

We pay a little bit extra on our mortgage every week (less than $10 extra mind you), which has taken about 2 years of our term to pay off the loan.

But other than that my priority is not on debt repayment.

I talk about my current financial priorities in my budget check series. You can find the latest post here.

Are you on your journey to being debt free? Tell me about it!