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Whitney Steel (pictured), from New Zealand, refused to check her mailbox and deleted the emails because she was “too scared” to know how much debt she owed.
By the time she was 20, Whitney Steel was a big spender who used credit cards to finance a lifestyle beyond her means and ended up saddled with huge debts.
Now that she’s 30, she’s paid off her debts, bought a house, and is considering starting a business.
Whitney thanks some good financial advice from a bestselling book, and tough love from her worried boyfriend, for turning her financial life around.
Whitney moved to Melbourne from Auckland at the age of 25 and indulged in an outgoing, carefree lifestyle.
By refusing to check the mailbox, he could ignore the debts he was racking up, which eventually maxed out at $40,000 in credit card bills and personal loans.
‘I didn’t have the discipline; if I wanted something, I’d just swipe the credit card,” Whitney told FEMAIL, adding: “Every weekend in Melbourne, I could easily go out and put down $200-$300.”
Now 37, the marketing director said her debt began mounting after she was “randomly” given a credit card at 18.
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Now 37, the marketing leader said her debt began mounting when she “randomly” received a credit card at 18. The marketing leader managed to pay off $25,000 in just 14 months, and says she would have paid $40,000 in total to throughout his 20 years. (pictured: Whitney, right, with a friend)
‘As soon as I turned 18 they put me in debt. I had no restrictions and never kept track of how much I was spending, which became the norm for me,” Whitney said.
‘In college I had a $500 credit card with a $2,000 overdraft, I had personal loans, I had a MacBook on high purchase. On second thought, it was ridiculous.
“I saved money, but I always went back to my savings account.”
Whitney described her 20s as her ‘age of gluttony’: she collected expensive perfumes, traveled to Las Vegas with friends, attended Coachella and bought a second-hand Mazda 3 for $16,000, which she deposited directly to her credit card.
Whitney described her 20s as her ‘age of gluttony’: she collected expensive perfumes, traveled to Las Vegas with friends, attended Coachella, and bought a $16,000 second-hand Mazda 3, which she deposited directly onto her credit card (Whitney in the photo with all its perfumes)
“I was living like I was making $200K when I actually had around $70K,” he said.
His lack of financial education meant he was spending far more than he was earning, and had “no idea” what the interest rates were.
“I really had no idea how much I was spending, how much was coming in, what was going out, I never stopped to look at my bank statements or anything,” he said.
The ‘tipping point’ was sparked when her boyfriend at the time threatened to break up with her unless she sorted out her money habits.
“I was really angry during that conversation, but then I thought if the roles were reversed I would have acted in exactly the same way,” she said, adding: “So it really got me thinking that I need to change.” my ways.’
But moving from thought to action left Whitney feeling “so overwhelmed.”
“I knew I wanted to make a change, but I didn’t know how or where to start,” he said.
‘The first thing I did was open the mail in my mailbox; I hadn’t checked it in months because I was too afraid to know how much I owed.’
To get started, Whitney wrote down all her debts, calculated her expenses, and looked up ‘how to budget’.
“I really had no idea how much I was spending, how much was coming in, what was going out, I never stopped to look at my bank statements or anything,” he said.
The ‘tipping point’ was sparked when her boyfriend at the time threatened to break up with her if she didn’t sort out her money habits. A friend from work then recommended Scott Pape’s The Barefoot Investor, which ultimately helped Whitney pay off her remaining debt of around $25,000 (pictured right: Breakdown of The Barefoot Investor’s monthly budget)
A work friend recommended Scott Pape’s The Barefoot Investor, and after applying some of the principles, Whitney was able to pay around $25,000.
The best-selling book is known for teaching readers how to budget by dividing income into different “buckets.”
The ‘hit’ bucket is for essential costs like bills, debt, food, and rent or mortgage payments, the ‘mojo’ bucket is for emergencies, and the ‘growth’ bucket is for long-term investments.
“The hardest part for me was reducing my expenses to 60 percent of my income and getting rid of my credit card,” Whitney said.
“My credit card had been a safety net for so long that it was hard to get rid of.”
He started by paying off the smallest debt of $1,100.
“After paying that, for the first time in my life, I felt safe,” she said.
From there, he switched phone and energy providers to cheaper alternatives, lowered his splurge allowance to $100 a week, and switched his personal loan to one with 0 percent interest.
She also cut her subscription to Netflix and coffee, and stopped buying expensive perfumes.
“Every little thing gave me a one percent confidence boost that I’m in control of this,” he said.
After this process, he was able to pay off a large lump sum of $25,000 in personal debt in just 14 months.
From there, he managed to save another $25,000 for a down payment on a house and land package, and the house in Melbourne was completed last year.
‘Saving for a house turned out to be so much easier for me than getting rid of my credit card!’ Whitney said.
Today she lives in New Zealand renting with her boyfriend, and they divide the expenses by percentage of income.
Whitney now refinances her house every 12 months and is considering buying another property or starting a business.
When it comes to advice for others, Whitney said to “take off your Band-Aid” and figure your spending.
“You can’t start budgeting or saving without knowing how much you’re spending,” he said.