Before tying the knot, my wife, Kim, and I never discussed money. It wasn't an intentional choice to be secretive — we just never prioritized sharing details about our income, spending habits or debt when we were dating.
But I had financial skeletons in my closet. With $18,000 in student loans and another $18,000 from an auto loan, I brought a significant amount of debt into our marriage.
I guess I didn't worry about fessing up to Kim because I wasn't too concerned myself. I figured, with a little discipline, I'd get around to paying it off at some point. What did alarm me, however, was an incident that happened shortly after our wedding.
In the course of one month, Kim charged $600 of new clothing and designer handbags to our joint credit card — a fact I discovered while looking over the statement one day.
I was truly shocked, and it got me thinking: Did we have a spending problem? In just a few months' time, we'd run up a $7,000 balance on our credit cards, thanks to a combination of Kim's shopping, my overspending on everyday expenses and our $1,400 honeymoon cruise.
When I combined that balance with my own debt and Kim's outstanding $9,000 in student loans, I realized we were on the hook for $52,000 — plus another $350,000 for our mortgage.
At the time, Kim was just kicking off her career as a high school teacher, and I was selling flooring. Our combined annual income landed at just around $70,000 — and we had no savings to speak of.
I knew it was time to get real — and Kim agreed. So we started hashing out a plan that would put us on the path to financial freedom.
Our Debt-Repayment Plan of Attack
I set out to find inspiration from people who knew a thing or two about money management, devouring personal finance blogs and books for strategies on getting out of debt. We also enrolled in a 13-week personal finance class through our church, which focused on how to better manage money as a couple.
The first thing we did was write down all of our assets, debts, income and expenses on one sheet of paper to see the big picture — and immediately realized we needed to slash our expenses.
Once the momentum was in full swing, we were putting anywhere from $1,000 to $5,000 a month toward our debt.
Next, I painstakingly reviewed every line item in our budget, and found a lot of opportunities to save. I negotiated our internet bill to under $20, and canceled our cable package, freeing up another $70 a month. We also scaled back restaurant visits to just a few times a month and started clipping coupons.
These measures put an extra $400 to $500 in our pockets each month that we could throw toward debt repayment. And we also took steps to bring more money in.
I started with my brand-new Nissan Altima, which I sold for $16,000, and replaced with a 12-year-old used car for $2,500. Sure, the passenger-side door didn’t open from the outside, but I was bettering our financial picture — and that made it worth it.
Selling large household odds and ends online, like our Nintendo Wii and a few of Kim’s designer purses, also became part of our routine. And Kim completed some professional development coursework that resulted in a $1,500 raise.
Any time extra money fell in our lap — whether through a pay boost, a hefty tax return or an item sold online — we automatically earmarked it for debt repayment. Once the momentum was in full swing, we were putting anywhere from $1,000 to $5,000 a month toward our debt.
To stay on track, Kim and I had weekly money talks to review a comprehensive spreadsheet we’d made detailing our finances from month to month. Clicking from one tab to the next, we could literally see our debt gradually shrinking, which served as a powerful visual reminder of our progress.
I remember a few months when we didn't make as much progress because I hadn't earned as much commission from work. But talking through such issues reenergized us to keep going, making our relationship even stronger.
Finally, after 18 months, we became debt-free.
The Debt-Free Life
Several years have passed since Kim and I began the new, financially-free chapter of our lives.
After climbing out of the hole, we prioritized building up our emergency fund to $15,000, which was about five months' worth of expenses — and started saving for a big international trip we'd dreamed about. After socking away $300 a month for two years, we finally embarked on a two-week trip to Singapore, Hong Kong and Indonesia. The best part: The vacation was 100% paid in cash.
As simple as it sounds, that’s probably the biggest lesson I learned from our financial journey: You can’t spend more than you make. It's an obvious rule of thumb, but it was something Kim and I needed to learn the hard way.
Speaking of income, a happy result of our experience is that I'm now generating two to three times more money than I was when we were swallowed in debt.
A happy result of our experience is that I'm now generating two to three times more money than I was when we were swallowed in debt.
Today, Kim and I have about $20,000 set aside for retirement, on top of our $15,000 emergency fund. We also have another $5,000 designated for travel and gifts, so we aren't blindsided by baby showers and birthdays.
What's more, after significantly paying down the mortgage on our condo, we sold it toward the end of 2014. Between our equity and an extra $8,000 we’d saved on our own, we were able to put a 20% down payment on a larger home.
And we’re going to need that extra space — we recently had our first child.