WHEN Penina Petersen added up all the credit card bills, she thought her life was over.
The Kiwi-born Melburnian had been living it up with her boyfriend Richard, enjoying all that her adopted city had to offer: live gigs, great coffee and Sunday afternoons spent sipping beer in sun-soaked courtyards.
After hitting 30, she decided it was time to get on top her finances - and what she found would turn her life upside-down.
Between them, the pair owed $50,000, and had no way of paying it back in the foreseeable future.
"I had it all in a spreadsheet and when I clicked 'total', I actually cried," Ms Petersen told news.com.au.
"It was really shocking, and we were at an age where we were about to have babies and get married. I'm like 'what are we going to do?'"
Fast forward to 2017 and the pair, now married with two young kids, are laughing all the way to the bank.
Having cleared their debt and repaired their damaged credit scores, the Petersens are enjoying the sweet taste of financial freedom while sitting on a property worth more than $1 million.
Now the Savings Room money blogger wants to share her story to inspire others to transform their fortunes.
"We were on a treadmill and we couldn't get off," said Ms Petersen, speaking at the launch of Credit Simple, a new website allowing Australians to check their credit scores for free.
"We were just so incredibly bad with money. We'd bought stuff we couldn't afford, big ticket items to set up house together, then tax debts and the costs of closing down Richard's sign writing business. We couldn't believe how it all added up."
For a personal assistant on a temp contract and a struggling tradie, the burden of owing such a big sum weighed heavily.
Every day that went by, more interest was being added to the balance. Bankruptcy started to look like an option - but the pair "couldn't bare the thought of ruining our prospects of buying our future dream home".
So, faced with the prospect of being trapped in a cycle of debt for years to come, they decided to take drastic action.
Not only did they cut up their credit cards, but they kissed goodbye to the city they loved, sold off most of their possessions, drove a van across the Nullarbor in 48-degree heat and settled in a remote Western Australian mining town.
After stopping off to get married along the way, they ended up in Kambalda, about 60km outside Kalgoorlie.
Sitting in a donga after spending their last $2000 cash on an outback honeymoon, the Petersens were officially broke.
Having taken a final overdraft of $500 from the bank, their wallets were empty and their lines of credit cut off.
"We had to ring Richard's mum and ask for money," Ms Petersen said.
"We were sitting in this caravan going 'What have we done? And what are we going to do now?' ... I went, 'we'll have to send off our resumes'."
Luckily, skilled workers in Kambalda were in high demand at the time, and the pair found work within days.
Ms Peterson took a role as personal assistant to a mine manager, while her husband got a job driving trucks and later moved into explosives.
With none of the distractions that had tempted them in Melbourne, they focused on paying their bills and whittling down the thick manila envelope containing printouts of all their debts. It took just twelve months to clear the lot.
"We got really really good at sitting on a porch, looking at the stars and talking to each other," Ms Petersen said.
"The quiet made us look within rather than for external quick fixes."
But adjusting to their new life wasn't easy. "As a city girl, moving to the outback felt like a death," she said. "I literally felt naked without my comfy city distractions ... The heat was harsh, the bush bugs were huge and there were snakes slithering around."
After spending her first pregnancy driving utes around the mines wearing a hard hat and steel cap boots, she gave birth to son Saxon at Kalgoorlie hospital on a 48-degree day.
Then, ready to take a step towards their dream of buying a home back in Melbourne, the young family shifted to country Victoria.
With their bad credit rating, breaking into the property market meant taking on a low-doc loan to buy at Stawell, a town in the Grampians, with the help of a first homebuyer grant.
"To repair our credit rating we paid all bills and our mortgage off diligently for the next three years, while we renovated out of wages," Ms Petersen said. "As soon as our credit score improved and our blemishes were gone, we switched to a better loan."
FROM DIRT POOR TO BEACHSIDE PROPERTY MOGULS
The family finally moved back to Melbourne in 2009, renting in the seaside suburb of Mornington for a few years while establishing new jobs and careers.
By 2012, the Grampians property - which they still owned and were renting out - had built enough equity for the Petersens to finally buy a house in Melbourne.
But instead of doing so in a trendy area like the one they lived in, they committed social suicide by purchasing in the comparatively lowbrow suburb next door: Frankston.
By now, the once clueless couple were financially savvy enough to see the capital gain potential of "Melbourne's last affordable beachside suburb", noting that its "rough stigma" was not putting off the foreign investors that have fuelled the city's property boom.
After looking at 35 different houses, they bought a place "with options", subdividable on a double block, older but with "good bones"- and within their means at just $370,000.
"We didn't care what people thought of us, those who looked down on us for what they thought was a 'poor decision'," Ms Petersen said.
"We didn't try to 'keep up with the Joneses' by buying flashy things, we never paid full price for anything and lived on Gumtree."
While living frugally, the pair spent $40,000 over four years to convert what was a five-bedroom home into a 10-bedroom home with the potential to build six self-contained units out the back.
Developers have been knocking on their door, with the latest offer of $1.1 million meaning they could sell up and be $750,000 ahead.
It's an incredible turnaround from the financial ruin the pair faced just 12 years ago.
Now the Petersens are the envy of their friends, and have options and choices about their future.
And they reckon anyone can do it, if they reign in their spending and stick to a few simple rules.
"There's a lot of money in living a quiet life for a while," Ms Petersen said. "Less is more. Keep it simple."
HOW TO GET AHEAD
- Pay your bills on time - automate if possible. Manage cashflow using smart apps that send you daily reports.
- Keep an eye on your credit score with tools like Credit Simple and get regular reports sent via email.
- Put debts in a simple physical folder and watch the folder get thinner over time, and put pictures of your dream life in there as well.
- Remove distraction and temptation. Hide away in winter and pay off as much debt as you can in quieter times of the year. Avoid browsing shops randomly and for no reason.
- Remember, it is not what income you are bringing in that counts; it is what you are not spending. For us living in the outback, there were no shops or special deals.
- Get used to being bored and socialise or holiday at home to avoid the costs of venturing out.
- Have a great conversation under the stars, take up reading finance news, books and blogs while you are sitting in the garden.
- Know the difference between good and bad debt: putting your holiday on a credit card at 16 per cent interest, versus taking out a low-interest mortgage and watching your home go up in value.
- Don't let the banks upsell you into pulling equity out of your home, getting personal loans and credit cards.
- Constantly seek better deals on your phone and internet bills, water, electricity, mortgage etc and do this regularly.