Your Money Blueprint: Young Debt-Free Families Interview (#2)

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I am excited to feature another story from a young debt-free family. This is the second story we are featuring in our Young Debt-Free Families interview series. The purpose of this series is to share stories from young debt-free families in an effort to inspire others to pay down debt and eventually become financially free.

This week we are featuring Nick from New Zealand, who blogs at Your Money Blueprint. As a new father, becoming debt-free has put Nick and his family on the path to living the life they truly desire. During the next few years, Nick plans to transition to a more fulfilling job even if the new job isn’t as lucrative at first.

Becoming debt-free will hopefully allow Nick and his young family to lead a life where they get to spend more time together, have more fulfilling work, and eventually leave a legacy behind. I hope you enjoy reading Nick’s story as much as I did!

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Young Debt-Free Families Interview Featuring Nick from Your Money Blueprint

1. Start by telling us about yourself. Please include any details you feel comfortable sharing about your family, job situation, income level, and amount of debt paid.

My name is Nick and I live in New Zealand. The land of 4.8 million people and 26 million sheep. I don’t know who counts the sheep, but I’ll take their word for it!

I am 38 years old, and a husband of a beautiful wife and daughter. Our daughter has just turned 10 months and made my desire to achieve financial independence even stronger.

I work full time as an Operations Manager and 6 months ago, started a second job as a personal finance coach and adviser. I would love for the coaching to become my full-time job, and I hope to achieve this is the next 1-2 years. Our combined annual household income is approximately $100K. My average income for the last 15 years has been $60,000. My wife is currently a stay at home mum and doing a great job.

We have paid $260,000 of debt. A $30,000 student loan and a $230,000 mortgage. Thankfully, we have had no other debt.

I’ve never had any consumer debt, but I was living paycheck to paycheck throughout most of my 20s. 

2. What inspired you to pay off your debt? Did you have a specific moment where you decided to make it a goal to pay off your debt?

I started paying off extra on the student loan as soon as I had my first job. It was the first time I ever had debt, and I remember hating how it made me feel. I paid this off aggressively and it felt great.

When we bought our most recent house we had the same philosophy. We never thought twice about doing anything else with the money. A few years ago I had a bad back injury that forced me close to debt. At the time I had no savings and was living dollar to dollar, and if I was out of work any longer, I would have started spiraling into debt. The injury helped prompt me into making smarter financial decisions so I could regain some breathing room.

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3. How did you stay disciplined throughout the process to pay down your debt?

1/. For the house debt, I had a strong motivation not to go back to the same perilous situation I was in during my injury. For the student loan, I just wasn’t used to debt and there was never any other option. I didn’t like the feeling and I wanted the debt gone.

2/. I made my payments automatically. I didn’t need to think about missing out on not having the money because I never let myself get used to having it in the first place. My bank accounts were set up that I didn’t need to do a thing, and you can’t spend what you don’t have.

4. Were there any apps, tools, or websites that were especially helpful in paying down debt?

When I was paying down debt, I had no interest in personal finance at that point. As I mentioned in the previous question, it was more set and forget for me. I am a natural spender, so putting it to the back of my mind worked well for me. I didn’t feel like I was depriving myself.

5. What advice would you provide to other young families who are overcome by the stresses of debt?

First, I think it is important to understand why you are in debt. What are your bad habits? This may not be an easy exercise to ask some hard questions. But if you are honest with yourself, you will get honest answers. Then, you are in a position to make positive changes that are likely to stick.

I am a big believer into breaking things down. Too often we get discouraged by the big picture and don’t do anything at all. Paralysis by analysis. In doing so, we underestimate the impact that small changes can make. So, I would advise to just focus on the small wins and get a few percent better each year.

I would also say to believe in yourself. You can often achieve more than you think. Especially with a supportive partner. Always communicate with those close to you, so that you are on the same page and are on the journey together. It is extremely hard if one of you is pulling in a different direction. Be open with your communication. There is no shame in being in debt or asking for help, but trying to hide it will make it that much harder.

Don’t be so hard on yourself. Yes, be honest. But don’t beat yourself up for your past decisions. In fact, some of my biggest learnings have been from previous mistakes, such as buying more house than we could afford.

Finally, recognize that the path towards financial independence can be a long one. Break the journey towards debt repayment into monthly, or even weekly targets. This will allow you to stay motivated and make it more manageable.

6. What was the most challenging part in your journey to become debt-free?

I would often turn down overseas trips with friends and family while I was paying down debt. That was hard for me.

Now that I am older, I do thank my younger self for making that decision. I will now be able to quit my full-time job many years earlier than I would have otherwise. Two years of sacrifice will mean many more years spent with the family.

It is a constant challenge to balance your present day needs with your future goals without depriving yourself of either.

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7. How has becoming debt-free changed your family’s life? How do you expect it will impact your family’s life going forward?

I am now only 1 – 2 years away from quitting my full-time job and focusing on my passions, which include financial coaching. This will bring about a substantial pay cut, but by paying off the mortgage we have eliminated a huge expense out of our budgets.

This has allowed us the freedom to start being more picky with our time, and doing work we love, instead of work we have to do. Once money is removed from the equation, the options that weren’t there, suddenly appear.

Our new jobs will give us a much better work/life balance, and we will be able to spend so much more time together as a family doing the things we love.

8. What are future plans for your family now that you are debt-free?

We’re going to continue to invest in broadly diversified low-cost index funds every month and build up our cash portfolio.

We will look for more fulfilling work, and I will hopefully be working from home and any location that we want. We may move to a quieter, lower cost of living area since we wouldn’t be reliant on higher paying jobs in the bigger cities.

I will be able to do more volunteering in the community once I free up some hours.

When our daughter is older we will do some travelling as a family, since we put that on hold while repaying debt.

9. Are you pursuing (or have you reached) financial independence?

We are pursuing financial independence. I would be working in my current job until approximately 2026 (age 46) if we wanted enough money to retire early.

Working another 7 years in my current position is not sustainable though. I am working too many hours and it is taking me away from the family. In addition, the work is no longer challenging or exciting for me.

Instead, we aim to save approximately 15 x our annual expenses, then take on lower paying, but more exciting work. This new work should at least cover our expenses, whilst our investment portfolio will remain untouched and continue to grow thanks to compound interest.

Yes, this will slow down the time it takes to achieve financial independence, but you need to remember the journey needs to be enjoyable. I am not prepared to be miserable for 9 years. I would rather live our desired lifestyle now than wait.

10. Where can we learn more about your story?

I blog twice a week over at Your Money Blueprint. You will often find personal insights from my life, as well as tips on how to grow your wealth.

Thanks again to Nick for being willing to share his family’s story. If you have questions for Nick, please leave them below in the comments. Thanks for reading!

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