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We have a lot of debt…. Wow. I didn’t think I would just come out and say that to the Internet.
People are SO weird when it comes to the topic of money & I’m over it. Like, you want to know how much I pay for car insurance each month? $180 bucks. I don’t get the big deal?! Why is money such a secretive topic?
From personal experience, my best guess is that many of us feel a lot of shame around money and shame is something we keep in the dark. Personally, I have felt a lot of shame and regret around the financial choices I’ve made.
I wrote an entire blog post about money being one of my biggest insecurities. I’ve worked really hard on bettering my relationship with money since I wrote that post. Things are finally turning around for us. It’s required a lot of hard work and sacrifice, and we are nowhere near where we would like to be, but we are getting there!
U.S. Debt Statistics
I found this 2019 survey data from nerdwallet particularly interesting. And in total transparency, it actually made me feel a smidgen better about my debt situation (minus the credit card statistics). The numbers displayed below demonstrate the total owed by an average U.S. household.
- Any kind of debt: $136,355
- Credit card debt: $6,849
- Mortgages: $189,586
- Auto loans: $27,804
- Student loan debt: $46,822
Turns out, the average American household carries A LOT of debt. If you have debt, you aren’t alone. But, just because you got yourself into this mess, doesn’t mean you can’t get out (preaches to self).
Our Credit Card History
When I graduated college I had a $300 dollar secured credit card. The bank froze $300 in my savings account so I could “practice” using credit responsibly. This did NOT set me up for credit success after college.
When I started my first big girl job, I didn’t have a car. I had to borrow my parent’s extra car until I could buy one. I went from dealership to dealership, but no one would give me a car loan because I had no credit at all. All I had to show was a $40k stack of student loan debt.
I knew I needed to get a real credit card to start building my credit profile, so I went to the bank and got one. I think that card started off with a $4,000 credit limit. Next thing you know, the bank raises my limit to $6,000, then $8,000, and now my limit is $12,000 on that card alone.
Want to know something really crazy?! Andrew doesn’t have a credit card. He’s never had one! Our plan is to add him to all my credit cards once they are paid down to zero so they can help him build credit.
How We Got Into Debt
My husband and I dug a pretty big hole when we planned our destination wedding. We are STILL paying for it months later, but we are climbing out at a steady pace. Present day me would go back and shake wedding planning me! Our courthouse wedding would have been more than enough!
From the time we got engaged to the time we walked down the aisle ALL of our money was going into an account to pay for the wedding. Meanwhile, our credit card debt grew and grew and grew. If we wanted to pay for our wedding, we had to ignore the surmounting credit card debt.
Let’s not forget that I opened a brick and mortar storefront literally as we left for our destination wedding. There were a lot of up-front costs that I wasn’t expecting and a good chunk of cash had to be invested.
We left our wedding in Mexico with not a dollar to our names, THREE maxed out credit cards, and a $10,000 diamond ring that we didn’t own… yet. OUCH. We were in a financial mess and it was causing me (& our relationship) extreme distress and anxiety. Not something you want to be stressing over as fresh newlyweds.
Getting Our Shit Together
This was the final straw. We had to get our financial shit together. I was sick and tired of living under a blanket of debt, desperately waiting every other week for our paychecks.
I decided to take out a $10,000 personal loan to consolidate some of the debt. With that, I paid off my engagement ring and one of the credit cards. Next, we used our income to pay off the second highest credit card over time. I believe it was maxed out at $6,000.
Once we got that card down to $2,000 (using our normal income), the bank rolled out an interest free balance transfer offer, so I transferred around $4,000 to that card from the $12,000 limit card (Balance transfers can be a great way to save on interest).
Mind you, I also have a car loan and student loans. I just bought my car in August of 2019, so I haven’t given much thought to paying it off. I’m much more concerned with the high interest debt at the moment, and NOW getting qualified to purchase a house (which literally changes everything)!
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Our Current Plan of Attack
At the moment, we are focusing on paying off the $12,000 limit card since we aren’t getting hit with interest on the $6,000 card. I am happy to report that the $12k limit card is now down to $2,550. We literally throw every single dollar we can at it when we get paid. Andrew has been picking up extra urgent care shifts on the weekend to help make the payoff go faster. We also haven’t charged anything to a credit card in probably 6 months.
All of that said, we are currently consulting a home lender to see if it makes more sense for us to be saving money to buy a house versus paying off our debt at this time. We are a little nervous going into the pre-approval process as we ran into some snags in the fall. Please say a prayer for us!
This is simply our personal story and not advice. Please consult a professional if you are seeking financial advice!
Photography: Emily DeKoster Photography