Debt Free in 2013

Last weekend, Mike and I went out to dinner to celebrate a momentous occasion. Tucking into a plate of tater tots at Cambridge Common, we smiled goofily at each other, utterly giddy at what we'd just accomplished. You see, we had just reached a major life milestone shared by many people of our generation.

What could it be you ask? Did one of us get a big promotion? Did we buy a home? Did we hit the lotto?!? No, friends. It was better.

We paid off all of our student loan debt.

I know, I know. Not really that sexy. But work with me here. Mike and I will never have to write another check send another electronic payment to chip away at the debt we acquired getting the degrees that are now 10+ years old. We no longer have to pay thousands of dollars of interest to a bank. WE. ARE. FREE.

How did we get here? It started, as most things in our life do, with me getting a little obsessed. You see, after an expensive 2012 (our wedding, other peoples' weddings, vacations, kitchen island, not sticking to christmas gift limits, etc.) I started to take stock of our financial health. With no big expenditures on the horizon, what was the best thing to do with the little bit of extra money we had in our accounts at each month's end? Sock it away in an emergency fund? Save or invest it so we could buy a place? Contribute more towards our 401ks? Open up Roth IRAs? Start a college fund for our future children? Go on another vacation? Buy even more Apple products? Up Oscar's treat budget? The options were overwhelming.

My first thought was to see a financial panther planner. And we still may at some point. But I felt like I needed to get a hold on our basic financial strategy before I went to see someone who will likely just want me to invest my money. So I did a lot of Googling. And looked at savings interest rates. And retirement calculators. And home prices in our area (which was painful to say the least). And college costs in 2033 (perhaps even more painful). But none of that gave me any direction of what to do when. Then I went to brunch with a friend who mentioned she was attending a financial planning class based on Dave Ramsey's philosophy about paying off debt. And I was intrigued. So, I ran home from brunch, downloaded his book on my Kindle, and read it straight through.

You see, while I don't think Dave and I would get along personally (socially I suspect he leans further to the right than I'm generally comfortable with), we do have a shared hatred of debt. And paying interest. So his philosophy really appealed to me. You can read about his 7 Baby Steps here.

He outlines a clear plan to what he calls "Financial Freedom." Doesn't that have a nice ring to it? His path to this financial freedom can be a bit extreme, so I can't say we are following his plan to the letter. BUT, we did take one big step which put us in position to make the big student loan payoff. We sold Mike's car. And we took that money, and some savings, and we made the last payments on our loans. We decided to prioritize paying off debt over everything else. And I gotta say, it feels good.

Next step for us is paying off my car, which we are hoping to do in the next 6 months. Turns out you have a lot more money when you aren't making two student loan payments each month! Then, once we are completely debt free (in 2013!) we'll start our emergency fund and then start saving for our own little house or condo (Well, maybe. But that is a debate for another blog post. Is buying a house worth it anymore?)

It feels really good to be digging our way out of debt. And it feels even better to have a clear plan. So while 2013 won't be as exciting as our 2012, I think it will set us up for a better future. So here's hoping the sacrifice is worth it. I think it will be.

Five Reasons Why Being Married Is Different

I was golfing the other day with my good friend, Walter, and he asked me if it felt different. "What? Being married?"

"Yeah," he said. "Or is it just basically the same thing?"

I thought about it for a while. Then I missed my putt by a good four feet. Then I answered: "Dude, it is completely different."

I honestly wasn't sure if it would be. There are obviously two schools of thought here. Some people say it's the exact same thing -- you go back to eating the same meals, going out with the same people, and emptying the same dishwasher. Others, on the other hand, think it's a whole new world. After 2.5 months of matrimony, I've decided that I attend the latter school. And here are five reasons why:

1. The ring. I don't wear rings. I mean, I did when I was 15 and trying to look cool, but those days are long gone. The positive here is that I have something to play with when I get bored. Spinning, tapping, tossing -- it's like a new toy. The negative? Having a ring gives me another thing to remember. It used to be phone, wallet, keys, watch. Now it's phone, wallet, keys, watch, ring. This may seem small, but my responsibility just increased by 20%. Don't tell Bridget, but I've found my ring at the bottom of my gym bag more than once.

2. You feel older. You just do. When you hear about "getting married" when you're young, you think those people are old. They are. And now I am. (I actually like being old, so I'm fine with this.)

3. You have a deeper connection. It's not just about the institution of marriage. To me, it's about the experience of sharing your vows and your intentions in front of close friends and family. Think about it: How often do you cry in front of 50, 100, or 200 people? (Watching Rudy sack the Georgia Teach quarterback in a movie theater is obviously the exception here.) A public display of affection and love instantly makes you closer to your partner.

4. The money thing. Bridget covered this on our blog last week. I may retort with my own account (get it?) at some point. Suffice it to say that figuring out a joint account, going on the same health insurance/car insurance, and taxes are significant changes.

5. You're generally happier. Whenever you have a bad day or get in an argument or the dog poops on the floor, it's just not as bad. You always have support, which gives you more confidence and more joy. It's good stuff.

And those are just five reasons. I believe there are hundreds. Feel free to chime in, if you have any of your own.

Saver vs. Spender. Round 1.

For my maiden blog post, I’d like to take this opportunity to talk a bit about A Joint Account and why I find it such a fitting name for a blog about marriage. And it isn’t just because I love puns.

Of all the ways our lives have changed since March 31, 2012, the opening of our joint checking and savings accounts (hereafter to be referred to as “The Joint Account”) has made the most immediate and impactful difference. It is a daily reminder that our lives are blended, shared, and inextricably intertwined. And while there is great comfort in that, it also poses some challenges.  

But let me back up a bit.

I have been earning my own money since I was 11 years old and making a small fortune in West Newbury’s booming babysitting industry. I don’t know if I’ve ever had so much disposable income! Life was good. And even though I’ve since grown up and now clock in at a regular 9-5 gig, the one constant in my life has always been the control I’ve had over how I chose to spend my meager income. And how I’ve chose to spend it is sometimes unorthodox. For example, over the past two years I’ve spent an obscene amount of my money on trips to India, Australia, and Fiji, and developed a pretty serious laser hair removal habit. But who cares? It was my money and I could spend it as I saw fit.  

You see, I like to go out to nice restaurants and order an appetizer AND dessert. I’m addicted to online shopping (remember the 15 wedding dress?). I have an Amazon Prime membership and I’m not afraid to use it (seriously, it is amazing. Check it out). I prefer to buy lunch at my work cafeteria instead of brown bagging it. I am powerless to a good sale. I am physically incapable of going into a grocery store and spending less than $50. And then there is the aforementioned weakness for travel and hair removal. While I don’t have any debt besides my car and a small student loan, I’m also not winning any saving awards. I am a spender.

Mike, on the other hand, has been nominated for a lifetime achievement award in saving. He buys the same ¾ lb of deli meat and ½ lb of cheese each week for lunch and is never tempted by the cafes of Harvard Square. Mike has been known to transfer $0.12 to his checking account to ensure he has a nice, round, even number in there. Mike takes out $20.00 at the beginning of the week and by Friday still has $19.99 (I’m not sure where that damn penny goes). Mike was wearing the same suit his mother bought him for his National Honor Society induction to job interviews until I expressed my horror and subsequently guilted him into upgrading (and it was a brown suit. Brown!). Mike has fiscal willpower the likes of which have not been seen since the Great Depression. Mike is a saver.

So, as you can imagine, the decision to combine our finances was not one either of us came to lightly. In fact, as is my tendency, I did a fair bit of research on the topic of marital finance. I found an article about newlyweds managing their finances quite helpful. I wanted Mike and me to be partners. Especially since we plan on having kids at some point, it just didn’t make sense to me to have separate accounts. It seemed like too much work. It seemed like we wouldn’t be “all in”.

On the other hand, I didn’t feel ready to have to justify my boot-collecting habit to Mike. As a compromise, we decided that we would keep our individual accounts, but open The Joint Account into which we would both transfer money at each paycheck and from which we would pay all of our shared expenses.

The Joint Account has been a real eye-opener for both of us. It is a constant reminder of the need for us to compromise. To respect each other’s differences. To talk directly and honestly about money and about our wants and needs. This is difficult, especially for someone who has spent the last twenty years making these decisions alone.  But it is has also been a profoundly useful way for us to practice the art of being married.