Debt can be a serious problem for young couples. As you get ready to make big financial decisions, like buying a house and having a child, having too much debt can really hold you back. Unfortunately, buying lottery tickets weekly isn't the most sound financial plan. You need to buckle down and get responsible if you want to get out of debt.
Depending on the amount of debt that you have, it could take years before you are finally debt-free. It's important to maintain a united front when it comes to bringing down debt. It won't work if one of you is being frugal while the other keeps spending. Creating a goal together for when you're out of debt will help you to stay committed. For example, you might plan a trip to Europe after you've paid off debt and saved enough money to for the trip in cash.
Setting Payment Priorities
If you're like most couples, you owe money to several different companies -- your student loans, your mortgage, credit card bills from different companies and so on. If you pay just the minimum balance due on this, it will be hard for you to get out of debt. Choose one to focus on paying off first, such as the one with the lowest balance or the one with the highest interest rate. Apply all extra money you have towards paying that off. Once you've paid it off, you can then apply all of that money towards the next debt on your priority list.
Budgeting or Not
Experts like Dave Ramsey will tell you that budgeting is essential for getting out of debt, but it's a bit of a drag. Some people thrive on being methodical about paying off debt. For these people, budgets are a great way to keep track of what you're spending. If you're not one of those people, try switching to a cash-only lifestyle. As soon as you get paid, designate as much as you can to paying off your debt, then take out the rest in cash. Use this cash to pay for your groceries and other items. When you run out of the cash, you must stop spending.
Decrease Spending or Increase Income
If you're struggling to pay off your debt right now, it's because you don't have enough money to pay towards it. Resolve this situation by increasing your income or decreasing your spending. Increase your income by taking on a second job, picking up a few odd jobs or selling items that you have but don't need. Decrease your spending by cooking at home, going out less or turning the thermostat down.
Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.