Paying Off Over $100,000 of Credit Card Debt Together
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Are you two stressed out over a large amount of debt? Learn the key strategies and tactics Travis and Vonnie used to pay off over $100,000 of credit card debt together!
How to Pay Off a Large Debt Together
How invested are you in your marriage and your money?
I know, kind of a weird question to ask you considering you're a part of this community.
Hear me out though.
I'd love to say that merging your lives and finances is really easy. The truth is though, even if you two are deeply in love it can take time to find your rhythm.
It's even harder when you're dealing with debt.
Imagine you had to come clean to your husband or wife about having over a $100,000 of debt!
Kind of scary, right?
Travis found himself in this exact situation years ago and he had no idea what they could do.
What would you do if you were him? What would you do if you were her?
Listen to this week's podcast and see how Travis and Vonnie, not only dumped over $100,000 of debt, but made their marriage stronger!
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Resources to Pay Off a Mountain of Debt
If you two are ready to pay off your debt, here are some handy resources to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint, Zeta
- Jumpstart Your Marriage and Your Money
- Total Money Makeover
- Free Debt Snowball Template
- Trim: With Trim, you can cancel subscriptions and negotiate your bills.
- Billshark: They contact your service providers and negotiate the best price on your behalf.
- Paribus: Bought something and a week later the price drops? Paribus can get you back the difference.
- Attacking Debt: Which One First?
- Which Debt Payoff Method Is Right for You?
- The Great Debt Dump: Running Toward Financial Freedom with the Power of Community
- How to Stay Motivated with Paying Off Debt
Connect with Travis from Enemy of Debt
Travis Pizel is one of the big contributing voices of Enemy of Debt, a site and community focused on helping people become debt free.
Besides sharing his amazing story of how and his wife Vonnie paid over $100,000 of debt, Travis write about simplifying their lives, becoming better communications as a couple, and prioritizing family.
He has some fantastic articles, which you can find over here.
Overspending and In Debt
Travis Pizel: It was just continuous overspending.
Week after week, month after month, we didn't have a budget. We didn't talk about how well we were spending our money.
We didn't talk about our income versus our expenses and we just spent whatever we wanted whenever we wanted and when the money ran out there is always a credit card that we could depend upon to pick up the slack.
We always had this viewpoint that the next pay increase because we both had good jobs that the next pay increase would outpace our spending, get our income to outpace our spending.
And of course that never happened because spending money is a lot like the fish tank syndrome, right? You grow to the size of your tank – the more income you have, the more you spend.
So that that outpacing of income versus spending nope never happened and our debt just turned into a big snowball rolling down the hill.
In the beginning, we were both aware very aware right. We knew that we were accumulating debt together.
And again we always had these discussions while I'm going to get a raise next month and then we'll be able to start paying it down or you know how much is our debt now. Well, here we have this much on this card of this much on this card and adds up to about this.
Less Talking, More Debt
Travis: After a while as that number just continues to grow and grow I really got now kind of embarrassed about that number and embarrassed that we weren't doing anything about it.
And it got to the point where the amount of debt that we were having was really having an impact on the amount of money we actually had. I mean any minimum payment is going to affect the amount of money you actually had.
But you get to the point where you know where we're taking I was taking cash out of credit cards using credit cards just to be able to sustain what we had been doing and and and then some.
And at that point I started basically not communicating with my wife anymore that the most we talked about finances was her asking me are we doing okay financially. And they would, of course, say yes because to say no would be admitting that I was, you know at least in my mind at that time, admitting that I was a failure as both a husband and a father and I wasn't equipped to handle that. at that time.
So you know as we progressed through our our our debt accumulation years my wife became less and less aware of what our financial state really was.
Hit with Harsh Reality
It was June of 2009 and I remember the day I got the mail and we had five letters in there from a major credit card provider that we had.
Five accounts with and every letter was identical except for the account number on it. And basically, it was saying that they were changing their minimum payment policy from you know 1 percent of your balance monthly to two and a half percent.
That doesn't sound like you know a huge change but when you're not thousands and thousands of credit card debt. When I started to calculate what that was going to do to our minimum payments I knew that we were done. It was going to sink us financially.
There's no way that we were going to be able to make those payments. And at that point, I had a very very open and honest conversation with my wife about where our finances really were.
I think it was more of at least initially disbelief. I mean we knew she knew that we were in debt.
We knew that we had credit card debt but you know the first question was ‘Well how much credit card debt do we really have?'
At that point I had gone into survival mode, trying to get to the next paycheck to be it you know how am I going to get through the next two weeks.
And I didn't even know you know I had I didn't want to know.
we added them up together and we're both shocked to see that number – $109,000 – at that point.
I really didn't know what was going to happen.
I wouldn't have blamed her. She could have packed up her stuff and walked out the door to be honest with you because you know marriage is all about trust.
And I broke that trust for a lot of years to get us in the situation that we were in. Luckily she stayed and and and we are together we started our road to recovery.
Why Travis Was Afraid to Come Clean About the Debt
Elle: Before Travis went on and gave the details about how he and his wife finally managed to get on their debt journey, I had to ask him – why exactly he waited that long to tell her how bad it was?
After all, they had acquired this debt over a decade of being married. At any point, he could've come clean and it would have been a much smaller number to deal with.
Travis' answer had nothing to do with the numbers but instead how he felt about this situation.
Travis: Right. Exactly. You know as you can call it machismo you can call it whatever you want but as as as as a father and as a husband feeling that I'm supposed to ensure that everything is OK I'm supposed to make sure that my family as well. Well provided for me and to admit that we had and the way that our society as a whole is built is to say that you can't afford something is to admit that you're a failure and to to now to have my wife for my kids asked me Can we do this can we go on vacation. Can can we have this new thing or whatever to say no. In my mind at the time was saying you know I was failing them as as as their provider and that that attitude in that perspective was was the first thing that really needed to change for us to to turn our finances around that realization and the changes that needed to follow didn't happen overnight.
Paying Off a Mountain of Debt Together
Travis Pizel: You know we talked about how bankruptcy was an option. We really wanted to avoid that if possible.
The next idea was talking to our bank and see if there is some sort of consolidation loan some way that they could help us. And that was kind of a humorous meeting in its own way.
Basically, the the the bank employee that we talked to representative told us that his advice says was to sink all of our available funds into paying our second mortgage down so that we could use a home equity loan to consolidate our debt.
And we just kind of stared at him and I said ‘I'm not going to be able to make my payments next month.'
You know basically, he said there's nothing that he can do.
And I said ‘there's a chance and I'm going to default on my mortgage if we can't do anything.' And he had no advice for us. He had absolutely no advice for us.
I don't know what he could have told us but I think he was as shocked as we were about our situation at that point to make a bad situation even more stressful.
Elle: Travis and Bonnie had less than two weeks to come up with the plan to fix their finances.
Travis: It really was probably about 10 days because you know it was the next month's payment that was going to going to sink us.
There's no way we're going to make the next payment. As soon as we got home I remember coming home for that appointment I said we got to figure something out. There's got to be some other options.
And that's when we started searching the Internet you know because at that time the whole economy was and there are lots of people having debt problems maybe not quite to the same extent but there were people that were having financial difficulties across the country.
And you heard these commercials on the radio for debt reduction and debt relief plans and I didn't know anything about them so I started searching on the Internet.
We started searching on the Internet and really over the next 48 hours took a crash course in debt management plans and debt settlement plans.
[We were] checking the better business bureau and reading reviews online and we'd kind of narrow the search down to two to three debt relief providers and over the next probably another day really kind of narrowed it down to one that we were going to give a call.
I remember it was actually our anniversary, it was June 29 2009.
We called our debt relief provider that we ended up going with and had about an hour and a half discussion with someone on the phone about how it works and asking questions.
You know people in debt relief providers kind of get a bad rap and rightfully so in some instances because there are some shady characters out there but there are also some legitimate debt relief providers.
And luckily we got hooked up with what's a legitimate one and there's no pressure.
He answered all of our questions and he – the representative – talked to us actually suggested it take time to think about it. ‘I don't want you to rush into anything.'
And we thought about it for about five days at that point. And I remember spending hours and hours reading through their online community reading reviews or doing research.
And when we call them back five days later we have had about another 90-minute conversation with the same representative. And that's when we signed up for our debt management plan.
Elle: They decided to go with Care One step management program. I asked Travis how the payment system worked out for their family.
So with a debt management program, the payments are usually about the same as what your minimum payments were prior to enrolling in the program.
The difference though is that the interest rate you know for example you know we had several credit cards that had interest rates now 24 percent 27 percent and those dropped all the way down to five and six percent.
So even though the payment amount is the same as such a greater amount of it is going towards your principal allowing you to make progress on your actual balance as opposed to just watching your money down the interest toilet every month.
Opening About Money and More
Elle: With that much money going towards your debt each month they are definitely knocking the balance down but that wasn't the only change that the family made with their finances.
If we didn't fix the underlying problem now we would just end up right back where we started.
And we realize that and luckily we realize that and we work tirelessly at how are we going to do this different.
And it really was an iterative process. You know it wasn't overnight.
It took us a while to really figure out how much our lifestyle had to change to fit within the confines of our budget.
Live within your means. What did we have to change to do that?
And you know, I look back to our lifestyle before now during our debt incurring phase and it's just crazy right.
I mean we would invite our neighborhood over for a party you know on the weekend and we would pay for everything.
If we wanted to go on vacation we would do it and you know the credit card would pay for it and know no vacations or out all weekend gatherings were out unless it was an all potluck sort of thing.
We had a hot tub in our backyard that that got sold. It was a constant evaluation of every expense that we had.
The first thing that got cut was basically all entertainment sort of things. And then we started looking at you know how you do that?
How do you get a handle on your grocery bill so that is the same every month and it and it fits within your budget?
Like I said just a constant evaluation of every expense that you have.
It's very important that you don't completely cut fun out of your life, right?
We did find very inexpensive or free ways to have entertainment and you know basically it was you know what. We've got a lot of things that we can do already inside of our house right. We can have a family movie night with Redbox and ice cream and that's good enough.
We can go for family bike rides and that's a great way to have family time and still have fun and get outside we can get together with our neighbors and have a potluck and it'll cost us nothing. Right.
I mean all of these things sound like common sense things to someone you know who is already living within their means but to someone that was living greatly outside of their means for so many years, it was quite an effort to figure that out.
So the first thing that we knew we had to do is we needed to to to start talking about finances period.
We tried a lot of different budget methods. We tried a lot of different systems. You know, kind of getting into the world of personal finance blogging there's a lot of ideas out there that I'd never heard of before.
We tried the envelope method, we tried zero-based budgeting.
We tried all kinds of different things. We tried different ways of sitting down and talking about our budget.
To be honest that it took us two and a half years to finally find the system that works for us.
For us that system is we talk two days each week.
Thursdays are before the weekend we sit down and review our financial information. Paying the bills that we need to pay. Talk about what resources we have available and how we're going to spend that money over the weekend.
And then Sunday evening we regroup and we talk about what we did with our spending how we stayed within our budget how we're doing what resources we have available what expenses we have coming up for the upcoming week make sure we're on the same page.
So Sundays and Thursdays are our days to sit down and talk. And you'll do that. Absolutely. You know if it works. Keep doing it yourself.
Becoming Debt Free, Together
Elle: The financial system has worked so well for them that they have paid off all one hundred eighty nine thousand dollars of their debt. With that behind them I asked Travis how they're spending their money now and what are their plans for the future.
Travis: Yes. So there's a couple of different things that you know once we get out of debt there are quite a few things that we had been kind of putting off because you know we couldn't afford it or we weren't able to do so.
The first was we needed to to refinance their mortgage because we had played the creative financing game when we built our house 10 years ago and we were on an adjustable rate mortgage which turned out to work out in our favor because interest rates just kept on dropping but now some start signs are that that's not always going to be the case.
We wanted to get that and in our second mortgage was interest only which is never a good thing.
So we wanted to get everything combined to get one to get our mortgage where we wanted it to be. That was the first thing that we did.
After that, we started looking you know what we're starting to look now at what's the right retirement strategy.
How do we invest our money for the future? What should we be doing to to to help get our kids ready for college?
You know some amount of sigh of relief okay. We can loosen the belt a little bit right. So you know one of the things that we did was I'm not a big fan of eating out.
And part of that is you know comes from our four and a half years of debt repayment of just how expensive it is to eat out.
But you know we figured if we increased our grocery budget and we buy better food to eat at home then that might reduce our temptation to go eat out at restaurants and actually be cheaper.
So you know we increased our grocery budget a little bit. So those are some of the things that we've done and we continue to re-evaluate all of our monthly expenses.
And you know we're just trying to get things to where we want to want them to be long term for the next 20 or 30 years
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Like the music in this episode? Our theme song is by Gentle Regime. Additional music by Logan from Music for Makers in this episode.
This episode was originally released in August 2017. Show notes have been updated on April 2019.