My partner is my high school sweetheart. We dated for four years before our year-long engagement. We knew each other’s families and knew how each family discussed or taught us about money.
My family was open about money, frequently offering advice on how to spend, how to invest, and how to avoid debt. His family also did well for themselves, modeling hard work and spending within one’s means. I was the one who pushed my partner into getting a credit card in his early 20s.
During college, we both lived in Los Angeles. I was in school, and he was working. We would spend our weekends driving all over Southern California checking out museums and coffee shops without worrying too much about paying bills. After I graduated, he moved away to take his first “real” job. After getting engaged, we knew we would be starting off our marriage a little tight financially, but thankfully, I didn’t have debt, and we planned on budgeting strictly. But six weeks before the wedding, that changed.
We were talking on the phone, dancing around the subject of his finances. He had always been vague about this topic, so I finally asked him point-blank about a credit card balance I knew he carried. Again, he was hesitant, so I started to worry it might be a couple of thousand dollars — not ideal, but also not the end of the world. After some stammering, he finally told me the number: $10,000.
We both started crying on the phone and, not being one to yell, I kept asking why he never told me. I could hear the shame in his response, knowing this would hurt me. We both spent the rest of the night wondering how on earth we got here, and how we were ever going to get out of this hole.
After taking some time to calm down, I jumped into action-planning mode. He was remorseful, having never kept a secret from me, and he knew this was a big one as it affected how we would start our life together. When it comes to marriage, our view was that everything was shared and “ours,” so I knew we would have to work together to overcome this.
We started with a budget.
We vowed to be completely open with each other about our expenses, savings, and debt in order to figure out how much money we actually had.
With a combined income of about $55,000 at the start of our marriage, we set out to lower our expenses and tackle this debt as quickly as possible. We came up with a strict budget that we would stick to for the foreseeable future.
We used this debt payoff “hack.”
Our first step was transferring the credit card debt to a balance transfer card with a 0% introductory interest rate. Credit card interest being so high, it can take years to get out of debt without paying well above the minimum amount due every month. Being able to pay down debt without interest makes it possible to actually pay the debt quickly. We were able to pay $500 a month, and any extra money we made went toward our debt.
Many credit cards offer a balance transfer with no fees and a 0% introductory interest rate. Thus, as a debt payoff “hack,” you can transfer your credit card debt to a new card that offers something like this. The introductory period allows you to pay off as much debt as you can without compounding interest. However, read the fine print. Be aware of the interest rate that will be applied after your credit card’s 0% introductory grace period has expired. Sometimes this interest rate is higher than your original card or loan, so you have to be careful and do the math to see if it’s worth it. When the introductory interest rate expired and we had to start paying the interest again, we were down to a balance of $6,000.
We borrowed money from family to avoid interest.
Using the Credit Karma debt repayment calculator, we calculated that paying off a balance of $6,000 with an interest rate around 22% at $500 a month would take 14 months and have us pay $839 in interest. (who said I wouldn’t use math in real life?) Making payments at such a high-interest rate felt like we were wasting our money. I was disappointed to see how little our total debt would go down each month. Seeing how long it would take sparked a fire. We wanted this debt — and the shame that came along with it — out of our life as soon as possible.
We ended up borrowing the remaining money from a family member to pay off the card immediately. We had never done this before, and thankfully it was a great experience for us, and one that we are grateful for. My advice about borrowing money from family: Choose someone you’re already able to talk about money with in a positive and constructive way and also get your repayment plan in writing. Paying off our remaining debt saved us almost $1,000 in interest. During that month, I also started a higher-paying job, so we kicked up our debt payment to $1,000 a month until we were officially free of credit card debt. Overall, it took us 14 months to pay off $10,000.
We made being debt-free a lifestyle.
Besides putting extra money toward our debt, we tried some other ways to lower expenses and stay on-budget as well, figuring out what worked best for us. During that time, we spent less than $200 a month on groceries (still not sure how we made that happen), limited our restaurant spending to $150 a month, and each budgeted $100 a month for individual spending on items like clothing, leisure, and anything we wanted just for ourselves.
We also tried the cash-only method, but considering most of our purchases are online, it became a hassle (and a lot of extra math), so we mainly used our debit card and kept a couple of my credit cards for expenses like travel. We cut up my partner’s credit card, so until he felt comfortable using a credit card again, he only paid for stuff with our debit card linked to a joint checking account. Having total accountability through joint bank accounts led to honest conversations about how we were each spending money and made it easier for me to start trusting him again with our finances.
That first year of marriage was not how I expected we would start. Living on a tight budget caused us to get real with money talk and make it a regular part of our conversation. I had to fight resentment anytime I could not buy clothing items I wanted or go to a fun new restaurant.
Seeing all of our extra money go towards debt was painful and often felt like a waste. Little did I know, this would kickstart all of our future financial goals. Having to lay bare our money mindsets and get on the same page with our finances so early on has set us up for success. We’ve proved that we can save more money than we thought possible on our entry-level incomes. This has inspired us, and we now work diligently towards big savings goals, like paying for graduate school, because we’ve seen the rewards of being debt-free and making our money work for us.
If we started debt-free, we could have stressed less about how much we were spending on groceries or luxuries and our savings account would currently be bigger. Yet, being on the other side of this challenge, I would not change the hardship early on for the fire it lit in us to be knowledgeable about finance. It truly empowered us to set and crush big goals together.
Tara Cater is currently living in Colorado, finishing up her Master of Arts in Counseling. When she is not studying, she is perusing the library for young adult fiction novels and planning her next vacation.
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