Today's Success Story comes from Linda in Melbourne who is now mortgage free. She writes:-

As a single Mother of two children, I returned to Australia after my marriage failed. Having lived overseas since the age of 20, I returned to Australia at the age of 33 with $400, two young children aged 6 and 9 and 10 suitcases having left a furnished home in the States.

I immediately got a job and with both of my kids in school was able to put my mind to getting on with life. I had previously had a home in the States but with very little equity in it, so I eventually came away with $11,000 some of which I used to purchase a second-hand car. I stashed the rest away and just pretended it didn't exist.

In 1981 I was earning a princely sum of $216 per week. I had never handled money before as my husband did all of that and I had a very quick learning curve to keep the "dogs at bay".

I had to always budget and on a pay evening would sit down and divide all my cash into envelopes to pay this one and that one and frequently would have to borrow from one to pay out something that had come up.

I denied myself of a lot of things, keeping in mind that I had to get all new furniture and essentials in the house, like a refrigerator and washing machine, and beds for each of us. Other than that, we didn't really NEED ANYTHING ELSE. I would buy something on time payment, put down a reasonable deposit, and then pay off the rest of it. When that was paid off I would get the other electrical things I needed, like a vacuum cleaner etc. In the meantime I was loaned some furniture from relatives.

Within 18 months of being back in the country I heard about a "public housing waiting list" that I could apply for as a single parent. I put my name down and by late 1985, I came to the top of the list at which time I decided I would rather build a new home for myself and kids. 

At the time my savings had accumulated considerably and I now had a deposit of $16,000. I was loaned a maximum of $51,000. Having gotten the loan on quite a cheap interest rate, I was quite aware that the more I managed to pay off over and above the principal the quicker I would have the house paid off. My initial compulsorily repayments were $374 per month but increased steadily each year as you were expected to pay more assuming you had CPI increases along the way.

Anyway to cut a very long story short, I had decided at some point along the way that I wanted to have the house paid off in 15 years. Therefore having increased my payments over time and by which time my expected payment was close to $600 per month, I was struggling to meet my goal.

There were times when I could only afford to make the $600 and other times could afford more. About 18 months prior to the 15 year term I had given myself, I got out the calculator and worked out how much I still had left to pay out the loan. I divided it all by my fortnightly payments and realised I would  at times have to put almost $800 per month towards some payments to reach my goal.

Along the way I had my struggles with all sorts of things, including unemployment in 1991 for 5 months and if it wasn't for the fact that I was so far ahead with my repayments, I am sure I would have sunk. I informed my lender immediately that I was unemployed and they just said "don't worry, you pay whatever you can afford, just so that you don't fall back beyond the extra you have accrued".

I was fortunate to have built up quite a bit of reserve for when I really did need it.

On 28th August 2001, exactly 15 years to the day I moved into the house. I was completely debt free!!

Well done Linda! There are a lot of people out there who are not making any progress on their mortgage, re-financing their home every few years to pay out the consumer debts they have accumulated. You have shown that it is possible to achieve what a lot of people say they want to achieve, but their actions don't align with their words.

Linda expects to retire in a few years time and is now considering changing homes. Since paying off her mortgage she has increased her superannuation contributions considerably. She has always contributed to personal super, even if it was only $50 per month.

Linda says it is all about what you are prepared to go without and what is important in your life.

She has found that if you commit yourself without being ridiculous, generally speaking you will make your goals and you must reset your goals once they are achieved.

Comment from me:- I wonder what Linda could do with the equity in her home now she owns it. This is an asset that is probably growing in value over time. If she used an investment loan to pull out some of the money that is lying there dormant there are probably options that she could look at that would speed up the wealth process even more. 

She has done the hard yards. Now some smart yards might be in order.