Finances, Second Marriage, and Becoming Debt - Free

[Guest post by Herbert Wattenbarger, HAW Financial Coaching]

My clients are a couple who had a realization that they needed to make some changes. Both of them had come out of previous marriages and didn’t come out financially ahead. Both of them had children with their past partners as well. While dating, they obviously had their separate houses, money and expenses, but money was never discussed in terms of their financial success with their future together. After marriage, they agreed upon expenses that were paid by whom. Fast forward, not budgeting together and not having a mutual financial goal started to put additional stress on the marriage. However, success was achieved in the end.

Following the wife’s past marriage, she struggled to make ends meet and provide for her children, while also trying to ensure they were happy. Unfortunately, this was difficult with only one income coming in. Support from her ex-spouse was hit or miss, but not consistent. So, she leaned on credit cards and loans to help her along. At this point she still has a large student loan hovering overhead. To keep himself motivated for her stressful hours at work and taking care of the kids, she would splurge on herself. Most times on common business cards like Macy’s, JC Penny etc. She was not getting financially ahead as she would like it to be, but she managed to make it work and ensure her kids were happy.

The husband discussed his story regarding his past marriage and it didn’t really pan out well, frankly mentally and financially. His ex-spouse dragged along divorce, child custody etc., therefore, he had accrued a lot of lawyer fees. At first, he thought he was going to be fine, because he had put money away in different accounts to save, which he thought was the right thing to do. However, he still had credit cards and loans himself. Although he had saved money, that was quickly exhausted to pay lawyer fees. Again, he thought he was going to be ok, but his child support payments were more than he expected and his expenses started to be a little harder to pay at times. After it was all said and done, he thought it would work out and that spending on credit cards on his kids and soon to be wife years later would slowly improve overtime. Obviously, he was mistaken.

After the couple had gotten married, they soon started to realize both of them were in financial trouble and had to make some sort of change. Initially, the husband attempted to make things better going through a debt relief program to help them along. Seeing this shiny relief process, which they thought, didn’t pan out as graciously as they wanted. The process took over a year to get some relief, creditors calling and sending letters. It was not a fun journey for them. Meanwhile, the husband was still battling additional court procedures with ex-spouse. This household became very stressful for them. Again, something had to change.

Subsequently they reached out for help and started to learn more about budgeting, not just attempting to pay the bills. That included them being more transparent with each other’s debt’s, like credit cards and loans (both car and student loans). This was a big moment for them as they were still newly married for about three years. So, they took the time to gather their information and consolidated it into one place to start developing a plan. This was overwhelming for them and support was needed to guide them along. They were shocked to realize they were paying nearly $3000 a month on minimum payments, excluding the mortgage. This seemed like an impossible challenge for them to pay off over $100,000 worth of debt. Things started to become clearer as a financial goal when both of them started working together and communicating.

After putting their money together and organizing their minimum payments, a little extra money was there to start their emergency fund, then soon tackling their first debt. The debt snowball seemed to work really well with them. They began to see the light at the end of the tunnel. They started to realize they had stuff around the house they no longer used and started selling things to expedite the debt payoff. Now, their motivation set in and they were focused on their goal. This was not overnight as it took months of intentionality and focus. Two plus years later, this couple was debt free. Their financial stress levels lowered and now have new financial goals. New Home, build wealth, travel and live financially stress free.