The Background: My husband and I are recent law school graduates, we both have student loans, and we’re newlyweds. We both accumulated a fair amount of credit card debt during law school. To top it off, my husband is a JAG Officer and we live abroad, which has severely restricted my income. That being said, when my husband got his assignment, we knew we had to get serious about paying down debt. The question was how to get our finances under control.
We had about six months to get a good start on our finances before we moved abroad. As we already had a small savings account that grew with each paycheck, we decided to create a budget and focus on the credit card debt. Enter a complication—since my husband and I would be living separately while he was in training, we needed two household budgets! One is hard enough, but two!!
So, we got creative and figured out where to make cuts. This didn’t mean that we only ate ramen, but we’re not perfect. When we seriously looked at our expenses, we were able to identify several areas that we could cut back without drastic changes. For example, one area where I spent a lot of money was books. I discovered that I could sell the thousands of books (I’m not exaggerating!) that were cluttering shelves and go to the library. Another big part of our plan was that we consolidated all our non-student loan debt into a 2% interest, fixed payment loan through our bank. This means that we pay less each month, and most of our payment pays principal, so the balance is rapidly shrinking! We still have our student loans to contend with, but there is a LOT less financial pressure. We have dwindling balances for our other debt and our savings account is growing rapidly.
Our “abroad” budget is still being determined, but at this rate we’ll be debt free in less than 5 years. That is a great feeling!
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