Me and My Money: Tracy Hemingway, Debt Free Diva

Debt Free Diva Tracy Hemingway repaid $94,000 in three years.  Now debt-free, she's saving for a house.
Debt Free Diva Tracy Hemingway repaid $94,000 in three years. Now debt-free, she's saving for a house. Photo credit: Supplied.

"The small amounts also add up. Track everything. Every step is a step in the right direction, no matter how small."

Tracy Hemingway, Debt Free Diva.

Money. It's the driving factor behind many life choices, but is it the be-all and end-all?

'Me and My Money' is a regular feature that investigates Kiwi attitudes towards money and what drives the choices they make. We also explore if COVID-19 has changed peoples' money habits and how.   

Tracy Hemingway shares her debt-free journey through the Instagram handle 'debtfreedivanz'. Having racked up nearly $100,000 of debt by the time she was 24, Hemingway paid it off in three years. She became debt-free last November and is now saving for a house.

Hemingway spoke to Newshub about the importance of paying savings first and using a credit card for cashback benefits. She admits to impulse spending - although it's on items that help her feel happy at work.

1. Are you a saver or a spender?

I'm a saver (now). I used to be a spender and wouldn't think twice before swiping the card.

It's no easy feat moving from a spender to a saver but it took a bit of retraining to get there. Now, I budget in the 'spending' and pay my savings first.

2. Has COVID-19 influenced your attitude towards money?

Not me personally, but it's reinforced the importance of an emergency fund: keeping 3-6 months' worth of expenses aside for 'just-in-case' situations. You never know what's going to happen!

3. Post lockdown, have your spending habits changed and if so, how?

Since lockdown, I've noticed I'm prone to helping small businesses in my area. 

I'm not spending more than I was before, but am more selective with where I spend my money. I get to the farmers market when I can, and look for places that are locally owned.

4. Your mobile phone dies: what do you think is a reasonable amount to spend on a new one? 

Can I claim it on insurance first? I'd like to spend up to $800 on a new phone - and pay cash (not pay it off). 

5. Give an example of a recent purchase that you consider great value for money

My custom-made, pink office chair. I've changed day jobs and will be working from home full-time, on top of my side hustles. 

The $500 I invested in my office chair is worth it to get rid of aches and pains. It [also] has a 10-year warranty!  The bright pink makes me feel happy in my working environment.  

6. What was your last impulse or 'fritter' purchase and how did you feel about it afterwards?

A custom-made, rhinestone computer mouse. It was an impulse purchase.

I felt really great about it! And it's a talking point at work now too. It matches the pink chair, to brighten up my day a bit.   

7. If you have spare cash to invest, what's your preferred form of investment and why? 

Property (when I get a house). This is a good investment at the moment, and it has an upward trend. 

The years of data show you can't really go wrong with a paid-off house. 

8. Do you use a credit card and if so, do you pay off the entire balance by the due date?

Yes. I use one for my everyday expenses that I pay off as soon as I spend the money. I have it purely for the cashback benefits. 

9. Does having more money increase happiness?

Money can relieve stress and certain financial strains, but I believe happiness comes from within. 

I found happiness while chasing financial freedom and learning along the way, not the actual bank balance I have.

10. The best money advice someone's ever given you?

The small amounts also add up. Track everything. Every step is a step in the right direction, no matter how small.