Today I am partaking in The Gift of Debt Series, which is all about how Debt has changed your life for the better. Now most people don’t think of debt as being a good thing, and in general I would agree. However, there are occasions where debt can teach you some valuable life lessons. Like for me, I found that debt has actually been both a blessing and a terrible foe. Let me explain…


Home Ownership

The reason why I got into debt was so that I could move out of my parents house and start to live my own life. I decided to build a house, but being in my early twenties, I didn’t have anywhere near enough money to do it all outright, so if I really wanted to get into the property market I had to go cap in hand to the bank and ask them if they would mind funding my new house through a 30 year mortgage.

At first everything was really exciting and I wasn’t really all that worried about the debt, but it didn’t take long before I started to realise that my interest repayments were crippling my ability to pay back this mortgage debt ahead of schedule. You see every time I would pay back a big chunk of money, the bank would add a massive amount of interest back each month. The end result was that I was only paying back a fraction of what I thought I would have been, with the amount of interest initially taking me a bit by surprise.


Getting Smart

It took some time, but my wife and I eventually starting thinking about how we could seriously tackle our debt and hopefully become debt free sooner rather than later. We realised that compound interest was what was killing us, and that the only way to beat it was to knuckle down and re-evaluate what was important to us.

So we decided that being debt free was a priority to us and we kicked into gear. We decided to:


Lessons Learned

  • Compound interest can be a massive drain on your budget!
  • Every dollar you pay off your debt is one less dollar that is compounding against you.
  • Compound interest works both ways, and the sooner you pay off your debt, the sooner it will start to bolster your bank account.
  • Paying any extra money into your debt is a great way to get ahead faster.
  • Paying weekly instead of monthly reduces your debt significantly. See the chart below

Debt Repayment Frequency


Where we are today

7 years after we bought our house and land we are in a position where if we wanted to sell a few of our investments we could be entirely debt free if we wanted to be. I couldn’t be happier with the team work my wife and I have shown throughout this entire process, and I feel really great about our financial future knowing that every single dollar we earn from now on will be compounding towards our retirement. It isn’t hard, you just have to take baby steps and know that every dollar you take off that debt is one less dollar that can compound against you.


This post is part of The Gift of Debt Series an eight-day, multi-blogger extravaganza hosted by The Fiscal Flamingo. The series is designed to give you the permission to kick up your heels, embrace your debt with glee and look forward to finding the gold at the end of the rainbow. Follow along in the series as we tell the story of our gift and encourage you to find yours.