Before I got married, I managed to run up some serious credit card debt and so did my wife. Part of it was just paying our way through college, but a larger part was just reckless spending with the mindset that we would be able to pay it back later. About six months after my wife and I got married, we found out that my wife was pregnant. Suddenly the debt that we had been putting off became a much larger issue because we had a child on the way and that would mean a whole new set of expenses. After the realisation that we were going to be parents set in, we realised that we needed to get a handle on our finances.
Admittedly, at the beginning of our marriage, we were sort of “winging it” financially. We didn’t have a budget. Our bill conversations went something along the lines of “Who HAS to be paid this month and who can we pay with what’s leftover?” After I found out we were expecting, we both agreed that wasn’t going to cut it any more now that we were starting a family. We couldn’t keep living pay check to pay check without any kind of fund for baby expenses. Even if I hadn’t been pregnant, but of us were getting tired of the “rob Peter to pay Paul” game we were playing.
We sat down together and created household budget first, then individual budgets to cover our personal expenses. Seeing the numbers laid out in front of us made it very clear that we were really living beyond our incomes. Not only that, but we could see areas where we were spending excessive amounts of money that we really didn’t have. It really made us start to re-evaluate how we were spending money and how we were being “wasteful” with money that we would soon need for other purposes.
Living La Vida Frugal
My husband read on that cell phone bills have risen by over 10% since 2007, so the first thing we did was get rid of our contract phones and switch to a cheaper prepaid plans. We also decided we didn’t really need a land line either. The next thing we did was stop eating out two to three times a week, which included lunches too. We prepared all our food at home and took lunches to work. We also made a weekly routine of clipping coupons together, which actually turned out to be fun, and placed “bets” on who could save more money each week.
By making a game out of cutting back our expenses, we were able to trim quite a bit of the fat off our budget. We didn’t starve and we didn’t suffer, but we started thinking twice before making impulse buys and realised that every unnecessary cent we spent was taking away from the funds we needed to get out of debt. Suddenly, we didn’t want things such as new clothes or new electronics as much as we used to. What we wanted was to get our debts paid down before we incurred even more debt after the baby was born.
One Debt at a Time
I had heard Dave Ramsey talk about his Debt Snowball Plan, but I never really gave it much thought until my wife started doing it without thinking about it. First we targeted the credit cards with the lowest balances and paid them off. That was a wonderful feeling of accomplishment that inspired us to do more. Once we knocked those bills out of the way, we started increasing our payments on the next highest debts to pay them off. We continued that way, knocking off debts like bowling pins.
While we didn’t get debt free right away, our method of paying of smaller debts until we could pay off the larger ones worked out well. By the time our first child was born, we could both breathe a little easier because we had reduced our debt levels to manageable amounts and we were putting a little aside in savings every month. It took a lot to pay off that much debt in less than nine months, but every little sacrifice we made was worth it.
Hindsight is Always 20/20
If I could go back and talk to my college-age self, I would tell him to stop spending money like there’s no tomorrow, because there is a tomorrow and you never know what might happen. Many happy years of marriage and three kids later, I look back on our debt-crunching days with a bit of a smile and a bit of a frown. I smile because, outside of our mortgage, we’re now debt-free and we manage to pay the bills without figuring out who is yelling the loudest and will cut services or send us to collections if we don’t pay.
The frown comes in because it really wasn’t the best way to start a marriage. Yes, we made it through it, but many couples aren’t always that lucky. The number one cause of divorce is money trouble and we were fortunate to make it through our financial problems with our marriage intact. Now, we live based on the very simple philosophy that we spend less than we earn. We’re not quite as frugal as we were when we were deep in credit card debt, but we don’t spend wildly any more either.
The best way to deal with debt is to avoid it. Draw a line between buying things you need as opposed to buying things that you just want. There will be time for the wants after the bills are paid and you have some money in the bank to cover unexpected expenses, and believe me, if I’ve learned anything as a husband and father, it’s that there will always be expenses you didn’t plan for. Even if you’re already struggling with debt, it’s not too late to start making some cut backs and working your way out. It takes time and patience, but it’s definitely worth it.