When my husband and I got married, we didn't want to take on new debt until we got rid of the old debt. Our new debt was what financial experts call "good debt" because it would be for our first home together. However, our old debt was all bad debt related to credit cards and car loans.
By having an inexpensive wedding that cost us less than $500, we were able to focus our attention on our consumer debt as well as save for a down payment for our first home.
Receiving wedding gifts
Most of our wedding gifts included cash and gift certificates. We used the money and gift certificates for necessities so that we could put aside any extra money for paying off debt. We also avoided the temptation to go out and buy all new things. I was able to sell many of my furniture and household items at a yard sale and on consignment. I used all the proceeds from our yard sales to pay off my car loan.
Moving in with dad
According to experts, multigenerational living is rising. A recent article by The American Society of Aging points out that the concept of several generations sharing a home is not new. In fact, according to Pew Research, 57 percent of people over the age of 65 lived in a home with children or grandchildren in 1900. In order to get rid of our debt as newlyweds, my husband and I shared a home with my father-in-law. We lived under the same roof as we waited for our new construction home to be built. By living together, we were able to share cars, utilities and food costs.
Pretending to be single
Another way we dug ourselves out of our newlywed debt was by pretending to still only have one income. With two incomes, we dramatically increased our spending power. However, we used our power to eradicate debt instead of buying things we didn't need. We followed a strict budget so that we could be debt free by the time our new house was built. Because it was during the housing boom, the construction time was longer than usual. We had to wait more than one year for our home to be ready, which gave us plenty of time to get out of debt.
Paying off the high-interest rate cards
Although we had an equal amount of credit card debt, we had a mixture of interest rates on our credit cards. We made a list of the different interest rates and then paid down the one with the highest interest rate first. We paid of one of my husband's high-interest rate credit cards before paying off two of my bills with higher interest rates. Then we paid off one of his bills with a moderate interest rate before finally paying off my zero interest rate credit cards.
After getting rid of our newlywed debt, we made a vow to remain debt free, with the exception of a low-interest rate car loan and mortgage. Being open and honest about our finances provided a solid foundation for our marriage.
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