I don't want the essential bits lost in the fluff.
He prob thinks we are around 120 000 in debt but its closer to 150 000 unsecured. I have no one I can really talk to about this
I would rather he didn't see the extent of my deception. Crazy I know but...
Most money problems aren't, at their core, money problems. The money issue is just an outward sign of something else.
You and your husband need to sit down and you need to tell the whole story and show him exactly where things stand. Only then can you (both of you) come up with a solid plan to move forward. If he doesn't know how much debt you guys actually have, he's working with a false set of numbers when making spending decisions. Maybe if he had known the actual situation, he wouldn't have bought that car, for example.
You've been married 30 years. That's quite an accomplishment. Surely, the two of you have been through lots of ups and downs during that time. I know my wife and I have as we approach our 25th anniversary this year. What got us through the hard times was working together and being there to support each other.
This is very doable. Here's my story:
$74,000 Auto debt
$500,000 mortgage on a house that was worth $380,000
Income - $219,000 / year
Savings - $0
Net Worth - negative a metric boat load
Expenses - $168,000 / year (about $30k more than my net pay, so we were adding $30,000 / year to our debt)
Debt - $423,000 mortgage and house is now worth $500k, so that's nice
Income - a lot
Savings - $600k, adding $280k / year to this now
Expenses: $168k / year, living quite well
Like you, in 2010, I got a pretty good raise. We spent it all. Then we started to get a good bonus and stock. Spent it all. We pretty much stayed at the same debt level until I stopped by SA and got some religion. I was much more belligerent than you are and thought everyone here was stupid.
In late 2013, when my wife and I finally decided we would die broke and destitute, we put a plan together. Sold the horse, horse trailer, camper, extra car, stopped eating out, cnx magazine subscriptions, reduced cable to minimum, got rid of home phone, no vacations (just short, local trips or staycations), stopped getting her nails done, and a lot of other little stuff. The result was our monthly expenses dropped from $14k / month to $9k / mo. And no extra crap like cars or vacations. That got us from spending $3k more / month than we made to $2k less. $3k of that was mortgage, $3k of that was car and CC payments. So we had to live on $3k / month. And stop buying stuff. That sucked. But it was the only way to stop the madness.
Step 2 is to put ALL the extra money towards debt. ALL of it. With your income, you can be out of debt in 3 years without trying too hard.
And please stick with SA. They saved me. No kidding.
You've given me hope .. When you see another couple in similar circumstances (pertaining to debt) and you managed to turn it around pay it all off and get to the level of finical stability you've achieved. Your savings are very impressive. Great accomplishment.
I would love to get where your at...I was thinking what we owed was just too much and it would be nearly impossible. ..There might be some light at the end of the tunnel. I hate being in Debt.
Please read the book The Millionaire Next Door. And have your husband read it. That provided the clarity we needed to focus on spending less and getting out of debt.
And stop looking back. What's done is done and it is what it is.
My wife graduated with 176k worth of student loan debt at 6.8% interest.
Our combined income was about 230k/year gross.
Even though she had to give her parents 1k/month for a year...we managed to pay all of her student loans off in 2.5 years. I had her dump 100% (minus that thousand) into the student loans for 2.5 years straight. I took care of the mortgage/utilities/food. My mortgage was about 150k at the time.
I dumped about 45k/year into my mortgage/property tax, and we both lived off about 30k/year.
So in about 3 years, we were -~320-330k in total debt(mortgage included)
3 years later, our total debt was down to 0.
Of course we didn't have any kids needing money for college and etc.
But you have a really good income so your debt can be tackled with ease. Just need to start reducing expenses!
This is what I told my wife when she was paying for gas.
I said "since your interest is 6.8%, the 40 dollars you put into your tank would actually cost about $305 in 30 years if you decide to pay off your loan in 30 years".
Every dollar you are spending from now on without any necessary needs is a dollar that could be used paying off your loan with an interest rate.
Reduce your expenses and we'll hear your debt free call in 3 years
Regarding the statement "I would rather he didn't see the extent of my deception."
What would you want if the shoe were on the other foot? Would you want him to continue to hide things from you, or come clean so that the two of you could move on?
From here on out, the two of you are going to need to work together as a team. If he doesn't know the truth about where your finances are starting out, he won't be able to accurately gauge the progress you're making.
If he doesn't know the truth about where your finances are starting out, he won't be able to accurately gauge the progress you're making.
In fact, one thing you might consider doing is putting up a whiteboard somewhere visible like the kitchen. List all of the debts with the starting balances. Each month as you make payments, update the board with the current balances so that you can clearly see the progress. Each time a debt is repaid, do something to celebrate together. Maybe go out to dinner or to a movie, then come home and cross that debt off the board together. Make it a game, a challenge. The more motivated you can get, the more dedicated you will be.
It happens to many people. At least you are here. That's the first step. Acknowledging the problem and facing the truth. I personally think that's harder than getting out of debt. It's so much easier to ignore the problem. But you here trying to solve it.
Now you have to face the music with your partner because no matter how horrible it is you have to do it.
I totally understand why it would be hard, but not wanting him to see the extent of the deception, is in itself, deception. Think of how much better you'll feel if you just lay it all on the line and allow him to take part in the process. Get rid of the guilt.
Maybe he'll decide he does want to keep his car, maybe he won't. You can work through it either way, but it's only fair for him to know the size of the hole you're in.
My biggest concern with your statement is that if you still feel the need to hide things from him, this might be a short lived endeavor to get debt free.
Thank- you to all who replied
I really appreciate all the constructive criticism, shared experiences, and incourgement. I know what I need to do..there is no easy fix.
Ill keep checking in to read posts ...Hopefully I cam start to implement some changes .I have to change my thought process... I can't imagine having this paid off in 3 years but even 5 would make me happy.
Thanks again everyone..I'll check in on a regular basis.
Trace, once you get motivated and start working at it, you'll find it will go a lot quicker than you think.
The post was a great motivator, but this....this is a cliffhanger. It's all I can see in the post now.
Trace, I also suggest staying active on this forum, and not just this thread you have started. Sure, people know your situation, but staying involved will help keep you focused on changing. I recently read an article that our brain is wired to think a certain way, as in the nerve grid in the brain is literally wired to process information in a certain way based on past choices and habits we create. This is why new years resolutions typically fail. People try, but almost always fall back into past habits. People don't do what it takes to rewire.
You need to stay involved here reading and soaking it in to rewire your brain to think differently. I also read it can take up to two months to change or break a habit, which to me sounds like it can take that long to rewire your thinking. Stay involved, read threads, ask questions. You will win with money.
to add to what everyone else has already said, once you figure out the numbers, I do think you should disclose it to him. This is your family's problem, hiding it from him will not help, and will anger him if he found out some other way.
I think when you start paying down your debts, you should use the "pay off the smallest balance first, while making minimum payments on everything else" method. That way you see measurable progress as you pay off your debts one by one. Living on a tight budget sucks, but every once in a while treat yourself to something nice, as sort of a pat on the back.
And at least you guys have a pretty high level of income. It affords you more flexibility whereas someone making less money with a equivalent income/debt ratio is in a much tighter spot. The reason for this is that basic living costs can only be cut so much, and someone making less money needs to pay a higher % of their income for necessities, whereas if a high income earner cut back their life style to ramen and beans like the poor person, their discretionary income to be applied to savings is considerable.