Mortgage free by thirty four. Could you even imagine this? Well, let's talk to Kathy who managed to do this in less than seven years. She's going to share with us exactly what she did, where she found out what to do, and what was her biggest source of inspiration and motivation to keep going with this powerful financial goal. Welcome back everyone to Sugar Mama's Fireplay, the podcast that fills you with inspiration, motivation, and education when it comes to efficiently
achieving your financial goals and dreams. Before we begin today's episode where I chat with Kathy, who is managed to have her mortgage off by age thirty four, I want to do a quick reminder that all of my content is general in nature. It is never personal advice. Device also treat strategic advice, so please keep that in mind. All right, enough from me, Let's just hit play and let's hear from Kathy, who is mortgage free at age thirty four. I have a feeling that we're all going
to learn a lot from Kathy, including myself. Kathy, Good morning, how are you?
I well, thank you, and thank you so much for having me on your podcast today. I've been a big fan of yours and You've been a big part of my journey as well in terms of motivation and in station. So thank you for what they to do.
Oh my gosh, my pleasure. And wow, that is a huge honor and something that I take with amazing gratitude and respect because I'm really passionate about helping everyday people and helping them realize that with a little bit of confidence and faith and some hard work along the way, it's actually quite amazing what you can do to improve your financial wellbeing and go from strength to strength. Wants
to get into the flow of it all. So can you tell me a little bit about yourself, like where you live, what you do, and then we can sort of dive into this crazy idea of being mortgage free at thirty four. I'm so jealous.
Yeah, one hundred percent. So I live in Auckland, New Zealand, and I lived with my husband Joel, and we've got a food baby. My dog wents so hopefully he doesn't make too much noise today. And apparently I work part time and the commercial property sector as a property manager. And I also started money coaching business recently called Curative Money. And yeah, that's about me.
So can we go back to before you started tackling your mortgage, like what was your lifestyle like, because I know you mentioned you went literally living paycheck to paycheck to suddenly going hardcore and paying off your mortgage. There are two very different, polar opposite worlds, like can we go to the old Cathy before we're here one?
Yeah, So I guess my Monday journey started when I guess maybe when I was fourteen was when I first got into working. I worked part time at a cafe, just on the weekend.
Obviously I was at school.
And I think my initial motivation was to have my own money where I didn't have to ask my parents for permission to buy something. And I was reflecting back on this, and I feel like, maybe that's what caused me to be living paycheck to paycheck because I was kind of used to, Okay, all the money I earn, I spend on whatever I want.
And that's so interesting. It's like the freedom almost became a like poison for you. Yeah, you took that freedom and just had like squandalous will create this squandalous life Styes, yeah, yeah, you know rat race almost and.
Yes, and yeah, I think something that I thought would be and I obviously don't regret getting a job because it taught me the value of a dollar. But I think back at the time, I didn't even think about, you know, saving a bit or anything like that, and yeah, or definitely not that. And even though I saw, like my mom openly talked about her investment portfolio and how much it was worth, but that never clicked for me to ask her more, and she never kind of told
me I should invest. I kind of just didn't do anything. And I think when you're young as well, you're kind of like, oh, I have time, and I'll do that later. And so really I didn't start my financial journey until one year into us having bought our home. So we bought it in twenty fourteen, And just to share some numbers because some people find that helpful, it was five hundred and fifty thousand dollars, which fork an hour is quite cheap. I think the medium price is about a million.
So for everyone listening right now going, oh, well, that's such a small, you know price to pay for a property, can we just bring this back into perspective for everyone as a relation in comparison or into relationship to your income, you know, was that still a significant multiple of your income to be able to afford and pay for that. Yeah.
So back when we bought our home, we were earning about one hundred and twenty one hundred and thirty growths combined.
So that's still a big stretch, you know, not like you, you know, you're earning two hundred and fifty thousand dollars year and bought a five hundred thousand dollar property. It's still you know, possibility. And I'm sure you borrow conservatively, you know that golden rule of spend less than you earn and borrow less than you can afford. I'm sure, But still so people would the old wow tiny mortgage.
It's all in perspective here, okay. And so you know you were still on that lifestyle creeper like you were still living it up. Yeah, paycheck to paycheck, but you've now got a year into your mortgage.
So yeah, a year in town mortgage. We were actually not doing anything differently. We spent everything we made, we went on holiday, we bought things for the house. And I guess there's two things that was their drive for us changing. So number one was after a year, we're like, okay, we should probably just have a look at it and see how much we've paid off. And as your know, but we didn't. I think like thirty thousand was the interest roughly that we're paid.
Yeah. When people say rent, mind's dead money, but so is interest. Yeah, And I always say to people, look at your mortgage repayment. It's like, look, when you go and pay your mortgage, don't don't think of it as rent. Going into payments and look on your internet banking where you can see, you know, mortgage repayment, you know, four thousand dollars interest four thousand, sorry, three thousand, seven hundred. Like it's quite It's very sobering, isn't it. Yeah.
Yeah, and only about like five thousand was towards the principal or the actual loan, And that was really shocking. And even like I did mortgage calculations back at university because that was one of our papers, property finance, but I still didn't click.
So that was one.
The second was there was a lot of restructure going on with my husband's job, and that was terrifying. Like I didn't we didn't have an emergency fund. I didn't even know what that was back at the time. So that's how you know, little I knew about personal finance, and we definitely could and have lived off my income. So that was when my husband said, oh, we really need to pay off this mortgage. And I was like, no,
people have mortgages for twenty thirty years hours of alone. Yes, it's going to happen, but it's not going to happen now, Like, you know, what are you saying this crazy?
Yeah?
And I didn't, but I thought he was just being weird to be honest, but he was like, no, like this really bothers me. I think we should do something about it. And then I went on Google and I was really shocked to find that there were actually a lot of stories with other people that had paid off their mortgage early, like five years, ten years, fifteen, And that kind of started my journey into learning about personal
finance as well. And of course I found you that time because I knew you had quite a few you know, how to peru your mortgage early videos on your YouTube channel, and yeah, that was kind of where it all began.
Wow, Oh my gosh, Well, I'm so glad you found my YouTube account. And I mean that video is I had like over one hundred thousand views. So, and it's so interesting you say this because when Tom and I before we had kids together, I remember we were sitting on the sofa at his apartment and he was like, oh, yeah, you never pay off your mortgage, No one ever does. And I was like, what are you talking about, Tom,
Like that'd be ridiculous. Of course you can pay for your home loan and he was like, no, come on, like as if. And so it showed him. I was like, Okay, well, look, if you put an extra one hundred dollars per month, you'll save this much ten thousand dollars and you'll pay for your home like six months earlier. And then if you do two hundred dollars a month, and his face
was just like, oh my gosh. And he ironically he's ex girlfriend, who was an accountant, had told him this, and he said, why didn't anyone ever show me I could pay extra off my homelan. I'd never one show me that you can actually save huge amounts of money, let alone time. And so that was instantly a catalyst for him to go, right, Okay, I can actually do this it actually, you know, if I can imagine it, I can do it. So and he's now just obsessed as I am as paying off our homelan together. So
very very important to have that awareness, you know. So all right, you've now clicked. And it's interesting how it was the fear of I guess, instability and almost danger with your husband potentially losing his job and being without work that made you go, all right, we need to do something about this. And good on you guys were coming together as a team. That's so powerful. What did you do then, like you go, okay, all right, I
get it, it's important to pay this off. Like what was the first thing you did?
Yeah, so the first thing I did. And to be honest, in the beginning, like we were just winghing it. There was no amazing, perfect master plan that we came up with. I obviously watched your videos. I listened to a lot of podcasts where to love books, and we just did something very simple, which was, like yours, say, do a budget. And that's when we realize actually, even though when you don't have a budget feels like you can't cut anything on paper, if you just put down your necessities, we
saw that there was some money there. And in the beginning it wasn't actually a large amount, and I think I'm really happy that we didn't see that as oh, it's only I think for Memoria would have been like around one thousand dollars extra a month that we could come up with. Yeah that's a lot, Yeah that's true. But yeah, at the time, we're like, okay, well, we have the potential to spend less and save this money.
And we also, from a practical point of view, just checked with our bank in terms of how we could go about paying off more repayments. So unfortunately, our loan was structured because it was fex for like a year or two that you could pay up to I think it was one thousand dollars off a month extra each month, but you had to commit to that until that term ex by it.
But yeah, because we.
Didn't have an emergency fund that we didn't want, we didn't feel comfortable doing that because we're like, what if we get to month three and someone loses a job, we can't commit to even more money. So that first
maybe it was about a year. We ended up just saving that and then we talked to a mortgage broker and by then we kind of figured out a revolving credit was probably the best way for us to have the flexibility of paying extra, but also because we didn't have a separate emergency fund to take out that money if we really needed to, because our bank also didn't
offer offset accounts, which would have been better. And so yeah, I guess pretty much from there on it was we would kind of have a goal of what we could We thought we could make an extra payments that year
and have that as of revolving credits. So in the beginning it would have only been like maybe ten twenty thousand, and towards the very end of our journey where we had seen big increases in our income, that was sixty thousand, and I think because of COVID we didn't actually spend money on holidays, so I think we even had like twenty thousand extra by the time we had filled up that sexty in that last year.
That's amazing, it really, that's incredible. It's amazing there we are. You know, compounding interest is when it comes to building wealth, is phenomenal. But also you know, the reverse impact of compounding interest when you're trying to pay off debt is very powerful and the biggest impact you can make in saving yourself tens of thousands, if not hundreds of thousands of dollars in interest and time. Is actually in the first five years of your home loan. The harder you
can go sooner the better. Yeah. You know, as you said, like, it's you know what sounds like you guys, you just had lots of little goals to focus on at the time that then obviously added up to be one massive, big goal being achieved.
Yeah, And I think it helped because we were already on that kind of habit of saying, okay, let's set our goal. As our income grew, we might have spent a little bit more like on a one off holiday. I mean, to be honest, we took maybe one holiday a year.
That's really good.
But yeah, but you know, our as our incomes grew, we directed that to the mortgage. And one thing that did really help us, and I know you talk about gamifying your finances all, yeah, is we gamified trying to live off one income and use the other income to
basically kill out mortgage. So in the beginning it was like little steps like just being able to pay our basic necessities nothing fun with the higher income, and eventually we were able to pay everything including fun things with our lot income, which was mine, so and that was you know, over a long time. It wasn't like it happens stand away that we could live off on income. That was those little goals that would make me be like, how can I cut this to make it fit into this income?
How powerful? And I love that idea of living off if you can. You're in a situation where you can live off one person's income and then all the other goes to the mortgage. Obviously you've got to be on the same page. You've got to have obviously respect and boundaries and transparency and even you know, you know, an agreement in place. But it is definitely if you, if any couple can do that is it really does supercharge
your mortgage reduction journey. How valuable was the conversation with your mortgage broker leaving this school, because it sounds like you really did educate you about understanding your mortgage where it was probably maybe had a bit of a black hole around the numbers previously.
Yeah, So to be honest, I feel like when we met with her, she kind of already had like we already kind of had a game plan and we're like, hey, this is what we want to do. We want to pay off our mortgage rely, and we were thinking of using our revolving credit.
What you think and.
She was really supportive, which was great, but she did say, look like revolving credit, most people use that because they want to pay off their mortgage early. They do need to caution you that it can be quite dangerous and some people end up just spending it all again.
So yeah, I completely agree with that advice. And this is why having a good mortgage broker is so incredibly important. You know, that's that's they can actually give you that word of warning. Yeah, is priceless. But she's right, and I've seen this, you know where quite often people banks attached like a credit card, and so they tell people, Okay, you know, put all your pay into this account which is like an offset account, and then live off the credit card so you earn lots of points and then
you know, you just do these sweeps across. But the thing is in reality, because you're spending credit, and there is all these scientific studies around us spending more money when we space for things on credit than we do when we pay cash, you end up like either going backwards or just keeping ahead of the water and on paper it looks good, but in reality does not play out like that and people end up like so many times as a financial planner, people would come to me
with this and they'd be like, the bank put us on this, it's not working. We're actually in so much credit card debt now, plus the mortgage hasn't done anything, and another two years has gone by, like and I'm like, all right, let's you know this is not the right
structure for you. The banks, you've never done this. Let's trim it all back, keep it no frills, home loan read or facility if an offset account maybe, and let's get you a mortgage broker that can fix all of this and get you back on I can also make up for lost time. So you know, great advice from your mortgage broken. It makes me so happy because I hear a lot of bad stories about mortgage brokers, which which is why I only have one in my life,
you know. So that's so good that there are good quality ones out there.
Yeah, And I'm so glad you actually brought that up, because that method you just talked about was the ones that I came across a lot. And I guess this is about knowing yourself. I knew for me, like I am quite an impulsive spender and back from my paycheck to paycheck days, I have a tendency to like spending things down to zero. So how we actually did the revolving credit was we agreed as a couple like this
is a one way street. We're going to put money in and unless it's a true emergency, we're never going to take it out. And in that six years that we were paying offer, like, we never took any money out because I knew once you kind of break that seal.
It becomes a slight pretty slope. So yeah, yeah, absolutely, And you know people tap into the emergency money once they've done that is you said, you break the seal, break the ice, and then people blur their justification as to what a real emergency is. You know, yeah, we can come up you know, it's human nature. We can come up with so many excuses, creating excuses to justify anything our lives. So you know that self awareness is very powerful. Can I talk to you about you know,
the lifestyle creep and was it hard to go? All right, We're not going to have lots of holidays year, We're just going to have one, which I have to say, even one holiday year I think is an amazing luxury. Like, was it hard for you? Did you ever think, oh, I just stuff that, let's just you know, not worry abot the mortgage as much, slow down a bit or
take off and have more balance. Or was the sensation of freedom and control and that stress off your shoulders completely outweigh having buying stuff in your life.
Yeah, I mean, to be honest, I would be lying if I said no. I never felt like when I saw friends. Let's say, we had some friends that I knew were on a similar income to us and similar mortgage to us, and they would be going away like five, you know, eight times a year because they didn't have kids either, And sometimes I'm like, wow, you know, that's
pretty nice. But I think also because I did consume a lot of financial content, like watching your videos, listening to podcasts, and reading books, I think I was trying to surround myself with people that were trying to reach their money goals and trying to just redirect my attention to you know, our why why we want to do this? When it write out that way, and I think over time it gets easier and especially when you see the momentum and you can see the progress you're making, I
think that makes it a lot easier. And I think also just flipping any negative stories or thoughts or phomo that I had to gratitude, Like you said, even you know, one holiday, Wow, we can take one holiday that's really meaningful to us, even when we're paying off our mortgage early. How great is that rather than thinking I could.
Have had five. Well, they say, like too much of a good thing is not good for you, you know, like going on holiday all the time, like lose your sense of appreciation and gratitude for that that thing. Like it's like going to a restaurant every week, you know, it become just the norm who cares? Whereas to go to a response once every three months or just for
special occasions, it's so much more meaningful. And you know, I was reading the other day about the dopamine hit and it's actually not in the in the receiving of the items, actually in the anticipation of that of that item or that experience. So you know, delayed gratification is
very very powerful. And I bet now you know you were so glad you made those sacrifices because financially you'd probably be a lot more ahead than those friends of yours that were going on five holidays a year, you know, to where you are now, Like mortgage freeze is huge especially is insane?
Yeah, and it's just thinking about, wow, now we're not paying thirty thousand dollars an interest. That's a pretty nice holiday.
Oh, very nice holiday. But I have to ask you what you have you replaced that goalie? You now that your mortgage free? Now are you looking at you know, you understand how important financial wellbeing is. How are you making sure that Okay, we've got all this cash flow, we've paid off a place. Do you want to grow your wealth or do you just want to ask spend all that money? Like where has this now taken you to? Is your financial well being going further now?
Oh yeah, one hundred percent. We've got a new goal as well. So I think also because this is kind of even though I know, like sex or seven years doesn't seem like a long time, you do build up a habit and it becomes part of your life and it does become really easy. And I think actually switching the mindset to be like actually, now we can spend
more was a bit more difficult. So our new goal is to be investing a lot more on shares and at the moment we are targeted to hit investing forty five percent of our income or this year.
Wow, so that is amazing. And have you allowed now that you check that box of being morgit Frey, have you got have you allowed maybe an extra holiday per year? Like? Have you? I guess have you brought back some balance now that even chance?
Yeah?
Yourself?
Yeah, so I think, yeah, it's definitely all about balance. So we're gonna get our laundry done this shire, which is something we've been putting off since we started the journey. So that's quite exciting. And I think as well, because we've delayed gratification, that makes it more exciting rather than if we've just done it and put it on a mortgage or something like that in the beginning. And we're actually heading off to Bali in June, so in a
couple of weeks, so yeah, that'll be nice. And we're playing business class.
Oh wow, I like this business class lifestyle and mortgage free lifestyle. Thank you. I need to what would you say to people right now who have got a mortgage and just feel like it's draining, is exhausting, it's overwhelming. What would you say to that person right now listening, you know who's gone through the hard work, had that wake up call, realize that they need to step up and take ownership and responsibility and gotten through not just
on the journey, but you are mortgage free. Like, what is your advice?
Yeah, I would say definitely just think of your why and dream a little of what life could look like without a mortgage, because it's at the end of the day, it's not about just saying you don't have debt on a spreadshet because it's not really exciting, But.
It's about what's.
Yeah, it's about what kind of what would your life look like without the mortgage. So for me, it was being able to cut down my hours, cut down my income without feeling guilty, so that I could do the things that I love and brings me joy without having to stress about how to pay for food basically, and even like I've talked to other people that paid off your mortgage, their why was so that they could not work so they could be full time parents and spend
more time with their kids. So I think if you first, think of the reason. And then the second thing is, like I mentioned earlier, we didn't know what we were doing in the beginning, but we just kept taking action and as we learn more, we refined our process and how we did things. So don't stress about not doing it perfectly. And even if it's just a small amount,
it does snowball and it gains momentum. And don't discount those small things and don't think because I think a lot of people I talk to they're kind of like, oh, it's such a small amount, what's the point.
No, yeah, yes, yeah. And this is a shout out to the calculators on the Sugar Mama website where if you put your mortgage in there and you just rate the amount you owe and how far into the loan term you are, and you look at the impact of saying extra ten dollars per week on your home life, you will be shocked as to the amount of money you will save, Like thousands of dollars in interest you will save and time you will get back. Even just
ten dollars extra a week is huge. And the other thing is is in this in these calculators you can also put in lump sums so you can say, okay, well I can afford an extra ten dollars per week of my mortgage. Look at that, and then go, okay, well I know that I'm going normally get you know, a thousand dollars back in tax each year and as a tax refund, put that in there as a lump sum,
and then watch that loan term quickly come down. Look at the tens of thousands of dollars interest you can save, Like, never turn your nose up at small amounts into the home loan, even if it's two dollars, just the habit of transferring, because it grows from there. You might be two dollars, but then next week it might be ten dollars, the next it might be fifteen dollars, and the next
week it might be twenty two dollars. Like it. Do you agree that it gets bigger and bigger the will you discovered you go.
One hundred percent to find one hundred percent because also, as wow, what I did like about when we had our evolving credit, so you can see exactly like each month how much was interest and then as you saw, the more we paid off, the less the interest was. And that was really motivating seen that connection in terms of Wow, the more we put, the less we're paying and adjust no balls. And I think also I heard the other day from someone they were talking about how
it's just starting. Because let's say you're you never exercise and you're not a runner, and someone runs ten minutes. The person that's going to run ten minutes and be able to run sixty is one hundred percent more likely going to be able to do that than someone that you know sits on the couch to run five minutes, even though that's a smaller amount. It's all about just getting the momentum starting and being that person that does something.
So beautifully said like thank you so much for sharing that. It's just have a go, just get off the sofa and and do the best you can do. And you have to put ten dollars per week. If you can't afford ten dollars per week, that's fine, But if you have a spare five dollars in your wallet or in a savings account, transfer that you don't have to do it every single week necessarily if you can't, of courbviously,
if you can. Brilliant, but don't underestimate random ad hoc lump some transfers, and that's why I had this built in lump some transfer calculator. You can see the powerful effect of both of them together or just using a lump some random ad hoc or regular increases as well. Like it is actually amazing what you really can do. And it's as you said tracking the homeland, like look jump online, look at your transactions, and look at the
interest amount coming down every time you do that. It is a powerful source of motivation to keep going and make it actually a really fun challenge. And you know, I know when Tom and I are working on a goal together, we feel so much closer.
Yeah, one hundred percent, one hundred percent, Like we had our monthly money day and I think just it was just, you know, such a big team goal that we had and it definitely brought us closer. And even my husband was saying, like, you know, I'm so proud of what we've achieved, and that was such an amazing thing that we did together, and that definitely and I did want
to mention as well. So we also did start investing in twenty eighteen, so three years before we paid off our mortgage, so kind of I'm out.
So that you've said that because some people think, oh, mortgage more good for mortgage only and mortgage first, Yes, non deductible debt you want to get rid of, but you can definitely. There's no rule that says you must do one or the other, like you have to pick between the two. You can do both at the same time. Absolutely, And I'm so glad you've shared that. Thank you.
Yeah. Yeah, And it was more just saying because I think and it wasn't. We still concentrated on our mortgage mainly, but the reason we kind of that, and we did have a bit of a debate because my husband only.
Wanted to concentrate on the home loan.
But I think if we hadn't done that, it would have been quite scary to then put a big chunk of our money into investments after we paid. I think the jump would have been too big, and I don't think we would have ridden out that's and downs and volatility of the market as much.
Yeah, I'm so this is such an inspiring story, and thank you so much for taking your time out of your day to share this with us. And I feel I feel this like rush of motivation as well, like even even though I'm honeding on my mortgage and doing all these things. It just makes me want to just go and look at my mortgage and look at where it's up to and just haven't seen my quick brainstorming session as to how I can come up with extra like a couple hundred dollars put on the homeland, because
it does really make a big difference. So thank you so much, and just to you know, end with one question. If you could go back to your younger self, you're fourteen, your self working, you know, part time in a cafe, what advice would you give your younger self.
Definitely start investing sooner on this. Yeah, twenty percent of your income done.
Yeah, great advice for you. Thank you well for all the listeners right now, Like I think you know, I'm sure you join me in thanking Kathy for coming in and sharing her incredible story of being mortgage free at age thirty four and all and you just the rush of inspiration and motivation, and you know, I'm buzzing with the thoughts of all the different things you can now do being without having the monkey in your back, you know, the noose of a mortgage around your neck, Like it's
just liberating. And you know if you're listening to this thinking what can I do? Can I just remind you, don't think about perfection. Don't look for the perfect plan, because it doesn't exist. It's actually all about progress. Start the path. Start walking on the path, and you will find your way. Things will come together, but you've got to be on that path, and you've got to be Start with what you can afford to increase your mortgage repayments.
Ten dollars a week, one dollar a week, I don't care. Just start. Then, on top of that, look around you as to what you can do to come up with some extra money, whether it's one dollar, fifty dollars, five dollars, five thousand dollars, look around you, leave no stone unturned and throw it towards the mortgage. And check your mortgage on a regular basis. Look at that interest repayment coming out by the bank. Look at it as a game. Look at the way you can get that mortgage repayment down,
the interest down, the time down. I promise you no one ever regretted paying off their mortgage earlier. And this is your sign to show you that you actually have everything within yourself to pay your mortgage off. So much sooner and take the stress off your shoulders, where you can then open yourself up to all the other wonderful opportunities, tools, and strategies out there to create even greater sense of financial freedom, independence and authenticity in your life. All right, everyone,
thank you so much for listening. I hope that you love this episode. I know I certainly have, so if you could take a moment to leave me a rating and review, I would greatly appreciate it. And as always, if you ever have any requests for sugar Bomba's fireplate, shoot me through a dam on Instagram. Enjoy your week, everyone, chow now.