NewDirection Life Coaching

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Marrying into Debt

As a financial coach, I am often in discussions with couples in distress about their finances. There is too much debt, they can’t pay the bills, life’s unexpected adventures put “Murphy” on their doorstep. These money stresses are one of the biggest causes of separation and divorce these days.

When Pam and I met she was a divorced, single mom who had recently graduated from college. We met at my sister’s wedding, dated, fell in love, and married. When the commitment to get married was made, I purchased a townhome in my name for our new family. We had been very open in our conversations with each other about our past and felt comfortable there would be no surprises after marriage.

Then the first month of bills started to arrive and that’s when the unexpected adventures began. I discovered that Pam had brought a bunch of debt to the marriage. She was paying on a car she no longer owned (her ex took it and left her with the bill). She had past due medical bills she’d been told she didn’t have to pay because they couldn’t withhold medical services based on inability to pay. However, the hospital’s collectors were banging at our door. As a new blended family, we had lots of stresses, adding unexpected debt did not help.

More than 31 years later, we are still together and handling our money and stress situations just fine. We have learned some things that have been hugely helpful to us, our family, and our friends. I share these things with my coaching clients and with the class members in various venues in which I teach. These things are not new. In fact, they come from ancient scriptures and have been shared over the years by people like Larry Burkett, Ron Blue, and Dave Ramsey.

If you are stressing over money issues, keep these principles in mind:

  1. Talk about your beliefs about money with your spouse or significant other. Is money a tool to be used for your dreams or is it just to be consumed? Is it ok to be in debt? Is there good debt and bad debt? Is it ok to talk about money openly or do we only talk about it behind closed doors? Where does giving to others and saving show up on your priority list? You see, your beliefs about money will drive your behaviors with money. Ron Blue says, “behavior always follows a belief system.” Know what you believe about money.
  2. Plan to spend less than you make. With 75% of Americans living paycheck to paycheck, most people are struggling to make ends meet. Some of this we can blame on marketing, especially marketing of debt. Think about all of the commercials you are exposed to about lifestyle and credit cards. The marketers want you to believe this is normal in America, they want you to keep up with the Joneses, and unfortunately it is becoming normal. Let me tell you…the Joneses are broke. They may look good from the outside, but they are not good. You need to use this winning formula for your money: give 10%, save 10% live on the rest (80%). If your paycheck is $100, you give $10, you save $10, and you learn to live on the $80. That is the starting point. But try getting to the 15-20-65 formula; give 15%, save 20%, live on 65%. It can be done, and you will thank me later.
  3. Spending less than you make helps you to create margin. By that I mean have money set aside for the unexpected adventures. Some 60% of Americans cannot cover a $1000 financial emergency without using credit card debt. Margin is about having enough money set aside to be able to pay for financial emergencies like the hot water heater going, a flat tire, or a small medical emergency. Margin comes from that savings number above (10% of income minimally). Dave Ramsey says we should all have an emergency fund of at least $1000 and building to the range of 3 to 6 months of expenses.
  4. Finally, eliminate and avoid debt, especially consumer debt, i.e., credit card debt. If you carry debt like we did when we first got married, you will find yourself more stressed at work and in your relationships because you are focused on what you owe. Debt is a thief and it is looking to steal your joy and your future. Get rid of it as fast as you can. And when that company asks you, “what’s in your wallet?” tell them…CASH!

It took us a while to figure these things out in our marriage. The early years had some stress and tension that strained our family relationships for sure. Then we found some wise friends and mentors that helped us to get on track. There are a ton of resources available to help you…books, classes like Dave Ramsey’s Financial Peace University, and financial coaches like me that want to help you get on a budget (ok, I prefer to use “spending plan” as it doesn’t sound so restrictive and gives  permission to spend), eliminate debt, and build wealth.

You can do this. You just need to believe it!

*Jim is a finance coach.

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