Debt can be a heavy burden, especially when you’re facing large amounts like student loans. My husband and I were no strangers to debt, but when we decided to combine our finances, we were able to make significant progress toward financial freedom. In just six months, we managed to pay off $47,000 in debt—and it wasn’t by accident. Here’s how combining our incomes helped us achieve this goal.
The Starting Point: Facing Our Financial Realities
When my husband and I first started dating, talking about money wasn’t exactly on the agenda. However, it became an unavoidable topic when I realized the extent of my student loan debt—around $78,000. On the other hand, my husband was debt-free, having paid off his student loans and even purchasing his car with cash. Naturally, I was apprehensive about sharing my financial situation, but to my surprise, he was understanding and supportive. He simply handed me a book that had helped him get out of debt.
That conversation was the catalyst for my desire to get serious about my finances. Over time, my focus shifted to becoming debt-free and finding ways to achieve that goal together.
Combining Our Finances: A Joint Effort
After a year of paying down my undergraduate student loans, I was engaged and gearing up for a serious conversation about money with my future husband. We needed to discuss not only our financial goals but also how we would combine our incomes and manage our money as a couple.
The decision to combine our finances wasn’t an easy one, but it was essential for our success. We realized that if we joined forces, we could tackle the debt much faster than if we tried to go it alone. This marked the beginning of our journey to pay off $47K in six months.
Step 1: Make it a Team Effort
The first key to our success was shifting our mindset. The debt was no longer just my responsibility; it became “our debt.” This mental shift was crucial. By treating it as a joint goal, we both felt equally motivated to put in the effort. It wasn’t about blaming anyone for accumulating the debt—it was about working together to eliminate it.
Step 2: Combine Our Finances
Next, we opened joint bank accounts and set up our direct deposits to go into those accounts. Combining our finances gave us a clearer picture of our income and expenses, allowing us to pool our resources to tackle the debt more efficiently. We also combined our bills, making a single payment for shared expenses like our cell phone plan and streaming subscriptions.
Additionally, any extra income, such as side hustles, tax refunds, or monetary gifts, was also directed into the joint account and put toward paying off the debt. Combining finances helped us streamline our cash flow and put more money toward our goal.
Step 3: Develop a Debt Repayment Plan
A solid plan was essential to our success. While debt payoff apps were not as popular at the time, we turned to an old-school solution: an Excel spreadsheet. We created an amortization schedule that mapped out exactly how long it would take to pay off the debt at our current rate.
Each pay period, we reviewed the plan to track our progress. This gave us clear goals to work toward and helped us stay on track. We also adopted a zero-based budget, which meant accounting for every penny that came in and going out. By focusing on where our money was going, we ensured that we were intentional with our spending and paying down debt as quickly as possible.
Step 4: Reduce Expenses
Cutting back on unnecessary expenses was key to our success. Even though we had combined incomes, we decided to live below our means to accelerate our debt repayment. We chose a more affordable apartment, kept our furniture simple, and stopped eating out as often. We also eliminated cable, which helped save money each month.
While we weren’t living like minimalists, we made conscious decisions to cut back on non-essential expenses. The less we spent, the more we could put toward our debt, speeding up the process of becoming debt-free.
The Moment of Relief
In October 2016, just six months after our wedding, we made the final payment on our $47K debt. The moment was anticlimactic—there wasn’t a celebratory fanfare when we hit “pay” for the last time—but the relief was immense. The real excitement came when we saw the balance in our bank account remain intact after the final payment.
Looking back, combining our finances and working as a team made all the difference. We not only paid off the debt quickly, but we also learned valuable lessons about teamwork, communication, and discipline in handling money. Today, we’re on track to pay off our first home using the same principles.
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