In the LearnVest Personal Stories series, everyday people share the details of their money lives, discussing the individual choices they’ve made and how it’s impacted their financial journey.
Today, one man explains how tying the knot helped him gain a new perspective on money, refocus his spending priorities and start making financial progress.
I’ve heard that money can be a leading cause of tension in a marriage, but it’s actually brought my wife, Jillian, and I closer together. Ever since we exchanged "I dos," I’ve adopted a completely different approach to finances because I now have a partner to help me get on track financially. By working together, Jillian and I have made drastic and strategic changes to our lifestyle, allowing us to pay down debt and save more.
Get started with a free financial assessment.
Get started with a free financial assessment.
Before I got married, my biggest financial problem was not having any goals for my money. Basically, if I had $2,000 in my bank account, I saw it as money to spend on whatever I wanted, with no real regard for a budget. Because I was contributing 4% to my company’s 401(k) plan and I had a company match, I also didn’t see the need to put any more effort into planning for my future.
Then I started dating Jillian.
We first met in college, but didn't start dating until after running into each other at a concert many years later. When we officially started seeing each other several years ago, she knew that I liked to spend money on eating out together and purchasing gifts for her. And I knew she was more thrifty than me, but money was never really an issue. It wasn't until after we got engaged that I realized just how opposite we were when it came to money—and how that might affect our future together.
From Spendthrift Bachelor to Budget-Minded Hubby
Just before getting married, we took a premarital course that included a lesson on finances that revealed a lot. Namely, I learned that while Jillian was working part-time and going to school full-time, she had managed to save almost $10,000 of her income for a financial cushion post-graduation.
By contrast, we realized just how much money I was wasting. In my bachelor days, eating out made up a huge chunk of my expenses. During the first five months of the year, before I was married, I calculated that I had spent $5,300 on restaurants and another $1,380 on fast food—with only $980 spent on groceries. That came to $7,660 for less than half the year!
The more we talked through our money goals in that class, the more I knew that I would have to rethink how I managed my finances—starting with a commitment to reduce my wasteful spending.
To help get me on track, Jillian encouraged me to spend more money at the grocery store, make dinner from scratch and eat the leftovers for lunch. When we did the math, the difference was monumental: During my first five months as a married man, I spent $840 on restaurants, $460 on fast food and $1,230 on groceries—saving me more than $5,000 compared to my bachelor days!
While breaking our lease cost us $600, we're now only paying $200 a month on rent—giving us an extra $12,000 to $13,000 a year to save for other goals.
She also taught me to how to scale back on impulse purchases. As long as I had the money in the bank, I thought anything was fair game. Jillian, on the other hand, will stop and ask herself whether a purchase is absolutely needed.
Her carefulness has definitely rubbed off on me, but I'd like to think that I rubbed off on her too. Case in point: She's finally agreed that the occasional small luxury, like a nice watch, is OK—as long as it's a planned expense and falls within our budget.
To trim our day-to-day household costs, Jillian decided that we should start clipping coupons. When we first married, she was only working part-time and saw it as a way to "contribute" more to our income, as well as bump up our ability to save, if even just a little.
Her couponing regularly shaves 30% to 40% off our grocery bills, and it has helped us save $300 on clothes and home shopping this year. And to save on entertainment costs, we also purchase tickets at a discounted price through the air conditioning and heating supply company we both work for now. It's a free employee perk that allows us, for instance, to buy movie tickets for $7 as opposed to $15.
But much of our cost savings happened once we moved in with my father-in-law, after deciding that we needed the money more than we needed to have our own place. Moving in with Jillian's dad did require some adjustment, but we make it work by establishing boundaries and keeping open lines of communication. And we converted the garage into a living room so we have our own getaway when we need it.
When we lived in an apartment in Orange County, California, we were spending between $1,200 and $1,300 on rent and utilities each month. And while breaking our lease cost us $600, we're now paying only $200 a month on rent—giving us an extra $12,000 to $13,000 a year to save for other goals.
Married ... to the Same Financial Mission
The two major goals that Jillian and I decided to focus on were to get rid of the more than $30,000 we had in combined debt and to save up to buy a house. And we’re aggressive with those goals—we want to accomplish both within one year—which is part of the reason why we’ve worked so diligently to cut down on our expenses.
As a business development manager, I make about $50,000, and Jillian makes about $42,000 as a marketing editor. We set aside $2,000 to cover most of our living expenses, and the rest is divided up in this manner: 40% goes toward paying down debt, 40% goes to savings, 10% is for fun spending, and 10% is set aside for charity.
We came up with these allocations together after sitting down to discuss what was most important to us. We wanted to give equal weight to our debt and savings, but we also wanted to have a small portion for ourselves and others. In fact, my favorite thing that came out of our budget conversation was deciding to allocate money to help those in need. Our 40/40/10/10 came naturally out of those discussions and has really worked well in motivating us.
We also automate $75 every week from our paychecks into a savings account earmarked for our home-buying fund. Since getting married, we’ve been able to save $10,000 for that future purchase, and should have around $20,000 by the end of this year. Our goal is to save 20% for a down payment, which means at least $75,000 for homes in our area. We expect to be near our goal by the end of next year.
Meanwhile, the debt we’re trying to tackle is a combination of auto and student loans. When we got married, I had $15,000 and my wife had $18,000 in combined auto and student loans for a total of $33,000 of debt.
To help make paying down our total debt seem more manageable, I suggested we break it down into several short-term goals, focusing on the debt with the highest interest rate first. To date, we've paid off about $11,000, which took care of Jillian's student loan and my car loan.
In my bachelor days, I never would have thought I’d be able to keep to the budget we have now—much less save for a big goal like owning a home.
Our plan for the remaining $22,000 is divided into five mini goals: my four student loans and our car loan. By July, we plan to pay off my first student loan and then tackle the subsequent ones about every two months thereafter. We should have our car paid off this year and early next year, my student loans should be paid off. This would allow us to be completely debt-free by the end of next year!
My New Money Life
I’ve made some drastic changes during the past nine months, and it hasn’t always been easy. There are days when I have to use one of our twice-a-month eat-out nights to help me feel like I’m in familiar territory again.
But seeing how much we are saving, and how much debt we are paying off, has motivated me to keep doing what we are doing. In my bachelor days, I never would have thought I’d be able to keep to the type of budget we have now—much less save for a big goal like owning a home.
I've also thought more about the far-off future, with a new goal of soon increasing my retirement contribution to 9%. And once Jillian is eligible to start her 401(k) in October, she'll begin investing 4%, which is enough to receive the company match.
For me, tying the knot has been the catalyst for getting my finances straight. I understand now what it means to manage my money with purpose. As we’ve set financial goals and steadily achieved them, Jillian and I have realized that we are in control of making our money work for us as a team.