Congratulations on your marriage. You spent 7K on a boat? What about the whole stickie note pep talk about spending 13K last year on other stuff that could have gone to paying off debt? You spent about half that amount on just 1 item just now.

With the way things popping up, your estimate of paying off all the loans in 3 years seems - optimistic. I could be off, but it's almost like making these estimates of time to be debt free makes you feel better about your financial situation, enough so your other hand is spending the money for the debt on other stuff. It's like you are spending your money twice.

A little bit, yeah.

I just didn't want to start off our marriage with "OK, now we're on lockdown and you can't spend any money." We talked it over last night and after the holidays we're going to be banking her paycheck (for debt repayment), and living off my paycheck alone.

Hey again Adam,

I can totally appreciate your reasoning. As someone who's been there, I just want to mention that the habits and lifestyle you establish right now, at the beginning of your marriage, will become much more firmly entrenched than you probably expect. Waiting until after the holidays to address your household budget will give you 3 months to get into a particular routine with respect to dining out, subscribing to expensive TV packages, establishing shopping habits, and many other money-related facets of your new lives together.

If you wait until January to approach this, you're going to find it very difficult to lower the lifestyle you've been living for the preceding 3 months.

Right now is a once-in-a-lifetime opportunity for you. You're young, you have no kids, and no pre-established routines or lifestyle. You've got a golden opportunity to make some tough decisions right now that could set you on a path to prosperity down the road. But let's be honest, after the holidays, it'll be "let's wait until we pay off all the debt we racked up during the holidays," and then it'll be "let's wait until after [insert excuse here]" - there will always be a reason to put off the tough choices.

The real benefit of these money journals is the advice, encouragement, and accountability they provide, to help propel you toward your goals. So consider mine and Partgypsy's posts to be a little bit of that gentle accountability. Why not sit down with your new wife now and create a household budget? Sure, it won't be perfect, and you'll need to tweak it a little over the next few months as you get a better idea of what your various expenses will be, but at least you'll be starting with a plan, instead of just barreling forward willy-nilly, spending at will "until after the holidays."

Just some friendly advice.

As much as I dislike posting to you for writing on deaf ears, I can't resist.

"I just didn't want to start off our marriage with "OK, now we're on lockdown and you can't spend any money." "

I think you should start off the marriage with 'OK, now I'M on lockdown and I can't spend any money.'

She's not the one with the spending problem. You are. Have you gone back to reread this thread? There's a lot of excess spending on your part, not hers.

Like kombat implied, it's time to get a grip before things are WAY more out of control.

Despite what you may think, I do read all of your replies.

He's not over-spending, he's stimulating the economy.

Car/Truck/Boat balances updated. Still waiting on her student loan statement. Down to five figures!

BOA: $5,561.94
Consolidation: $15,357.78
My Student Loan: $12,695.15
Her Student Loan: $40,866.96*
Truck: $9,570.23
Car: $8,019.62
Boat: $6,899.66
-------------------------------------
$98,971.34

Hey Adam,

Have you two decided on a plan as far as paying down the debts?Are you just automating the bare minimum payments until after the holidays? Do you have interest rates and minimum payments for each loan them?

I think that even if you don't choose to pay the debt down agressively throughout the holiday season, you should allocate an extra bit towards each even if it is 20$.

Adam,

You listed your liabilities, but what does your "Assets" column look like? What have you got in cash savings and retirement accounts? Where's the other half of your balance sheet?

This is really the key. Debt can be a tool when used properly (though I will avoid it if at all possible) as you still have equity in the things that are collateral on the loans but able to purchase them on (ideally) managable monthly terms. They have a value that offsets the debt.

I don't consider the debt a particularly bad thing, except most people 1) get interest rates that are ridiculous, and 2) accumulate far larger amounts than are reasonable or sustainable. Remember that if the interest rate is decent, and you have a good downstroke (i.e. down payment), a small debt on something could make sense as you could sell it and pay off the loan. I.e. if you borrow 5 grand at 3% on a new 15,000 dollar car, you have $10,000 in equity (roughly) from the get-go, and really not be out much in interest in exchange for the security of $5k in liquid cash. If it gets worse, you are right-side up in the car and can sell it if need be.

Back to the balance sheet, you really could include things like computers, furniture, electronics, etc... as we spend considerable amounts of money on these things. However, for simplicity, most people lists things they can sell for a good chunk of change relatively easily (cars, houses, boats) as well as their liquid and long-term savings.

Like this:




I wouldn't be all too worried at this point about the enormity of the $50k in student loans, but the other $45k in stuff needs killed pronto, especially if you are anywhere close to being upside down on the vehicles.

We are no longer upside down on the vehicles. If need be we could sell both and wipe out the car, truck, and consolidation loans. I've got somewhere around $60k in retirement, but I'm not counting that because I can't/won't touch it. My house is underwater about 20k, but her house is probably about even. I think there's about $1000 in the savings account.

We're continuing the $2000 snowball. I'm waiting for my paycheck... tomorrow then we'll knock the car down closer to $6k.

Worst case scenario and we had to sell everything, her house, the two cars, the boat. We would end up a few grand ahead. Then we'd have the BOA and student loans and my house. My total would be around $17k, hers would be $40k. That and a house that is underwater, but we could eventually move back into that when my renter's contract is up.

Car is paid off.
I traded my car down and am getting a $12k check for the equity to pay off the consolidation.

We financed an 05 Sequoia separately at 4.29% rather than roll the equity into the trade because the consolidation is at 11.75%. Its going to feel good to get rid of that.

That being said...
We haven't really made as much of a dent in the total as I was hoping. I finally convinced the wife that we cannot continue spending as we have been, and she is now on board, so I'm hoping things accelerate from here. While we added one new loan for the Toyota, we paid 3 off (technically: her car, my car, my consolidation), and that may provide the motivation she needed.

Do you still have the boat? Why did you get a Sequoia? How many cars do you have now? I am confused .

Still have the boat, owe about $5300. We have two vehicles, her car is paid off, the Sequoia we got when I traded down on the Trailblazer. It wasn't a straight trade though, I got the difference in value on the Trailblazer in a check paid to me so I could use it for a higher interest debt. All in all it cut $5k in total debt, and will trade $763 in min payments (between two loans) for $333 (for one). Of course I pushed the number of years that $333 will be due (5) out 2 more than it would have been if I kept paying $763 (3 left), but we plan on paying it off before then anyway.