I'm back!  The wedding is over and life has calmed down slightly (but only for a brief moment since I start grad school while working full time next month).

Tonight we are sitting down looking at our debt  and expenses.  It's the first time my significant other has budgeted in his life – this could be interesting.

We have quite a bit of debt together but were incredibly blessed with generous wedding gifts so we will be able to pay a large chunk of that down.  It's sad to see that money go towards credit cards instead of a down payment…but that's reality and we have been given an amazing opportunity to head towards freedom from debt.

Together, we will be looking at:

- how much debt can we clear right away

- how can we finish paying off the rest of our debt

- what's next? (work on mortgage or save for down payment of a house in a couple years…or for a car that is going to be needed in the near future)

- what spending can we cut back on to save even more?

- is it possible to live off one of our incomes and save the other?

Any tips or advice for us as we work towards becoming debt free and joining our finances?

We are in our second month now of working with Matt on getting our combined budget in order and a good financial plan in place.  It has been interesting…but good.

For example, my husband realized (after we first met with Matt and set our budget) that he wouldn't be getting a paycheque until the middle of September (he had an injury and was on disability until the beginning of September, and also they had accidently cut off his disability cheques too soon!).  We deal with that.  Now, he just realized that when he gave me his monthly income (after tax, without any overtime), he overestimated.  When I ask him “so how did you come up with that number then?”, he couldn't explain it.  Haha.  His guess wasn't that off, but it definitely makes a difference in the extra amount we can put towards debt reduction this month.

Aside from that, he's doing pretty well for a guy who has never budgeted before (and used to have a sort of negative attitude towards budgeting).  I think he's better than I am (mostly because he's more disciplined).  I feel good now that we are fully combining our finances (and have a joint credit card) – we'll be able to keep each other more on track.  It's definitely a learning experience, but a good one.  I'm glad we decided to fully combine our finances and it's made me feel like we are more united as a couple.  He'll still have whatever money he makes working overtime as his money for his fancy car and motorcycles (for now ) so that keeps him happy.

From my questions in my original post, we have these answers so far:

How much debt can we clear right away?  We were so blessed with generous cash gifts from our wedding and have the option of cutting our debt (other than mortgage) pretty much in half right away.  Best gift we could get at this point in our lives.

How can we finish paying off the rest of our debt?  Thanks to Matt, we have a plan for that!  If we stick to this plan, our non-mortgage debts could be paid off at the end of next year!  Imagine that!

What's next?  We have a plan that will allow us to save for a newer car for me (needed in the next year or two) as well as start putting away some money for a down payment (should take about 2 years after we have our debts cleared).  Putting more into our retirement savings will also be next.

What spending can we cut back on to save even more?  Well, it turns out, we can have a pretty livable budget without having to cut back on things too much.  We really will have to watch our eating out.  We cut our cable (more because we don't watch that much tv, but it also saves us a little each month) and we are looking into combining our cell phone plans (we have some of the most expensive cell plans in the world in Canada!).

Is it possible to live off one of our incomes and save the other?  The short answer: no.  However, it might be possible in the future once we pay off our debt, depending on what sort of mortgage we end up having.

I'll make updates every once in a while as we work through this pile of debt!…in case anyone is interested or finds it helpful!

ajgrifdog – You are asking how to get a man to sit down and talk about something he doesn't seem like he wants to talk about?  If you figure out how to do that, please, let me know! Haha!  I can relate though, sometimes getting my husband to talk about things is like pulling teeth; sometimes I just have to say “if you are serious about this, we need to talk about it”.  If your boyfriend thinks his budget is fine, maybe you could do up your budget and say that you want to talk about YOUR budget with him and hope that might lead into some more detailed talks about his budget.

My husband and I moved in together before we got married.  We set up a joint account to pay for costs that we shared (electrical bill, tv/internet/home phone, mortgage payments) and we had our own accounts for our own costs (car insurance, gas, clothes, etc.).  When it came to the 'grey areas' (groceries, eating out, gifts given jointly) we would sort of mentally keep track and, if I was struggling with money more in one month, he would make sure that he paid more than normal for these things.  So, each month we would transfer the money for our share of the bills in our joint account, and the rest stayed separate until we were married.  We transferred a bit extra into our joint account each month and that would be used if we needed something like a new furniture item.  I think it worked okay.  I would not have been comfortable totally combining finances before we were married (even though we lived together for 3 years prior to our wedding and had dated 3 years before moving in together).  Even though I was pretty sure marriage was in our cards, I wanted to 'protect' myself financially in case I was wrong.  If we had combined everything financially and things didn't work out as planned, it would have been a heck of a headache to figure out the financial part of things.

When we first started working with Matt, it was the first time my husband had to write down all of his expenses and also what he made each month.  It took a lot of encouragement (prodding  ) but he did it.  We are two months in now and he's willingly sitting down and doing our budget each month with me…I think he sees the value in it and is really motivated to get out of debt.  Perhaps you can figure out some creative wording when proposing the budget conversation with your boyfriend that will highlight the value of the conversation for him?

Couldn't wait until the end of the month…just paid off our last credit card!  Yahooo!

The countdown is on….one loan ($10, 000) and two student loans left to pay off until we are debt free except for our mortgage!

February was a great month for us!  My husband got sent away for work for a week where he got slighlty higher pay and a ton of overtime.  In addition, his union settled on a new contract and he got some back pay.  We did really well with our budget and had just over $300 left that we didn't sepnd (so it went towards debt repayment).  Also, my husband sold his truck a while ago and bought a cheaper car a couple of months ago.  He had to do some maintenance work to the car and, now that that is all done, we put the remainder of the 'truck money' towards our debt repayment.  Apparently I may have dome some mathematical error inour budget in the past couple of months that left a bit of extra money in our account (at least, I hope that is what happenend, we couldn't explain it any other way; if I was wrong, then we have an emergency fund if we run short).  This allowed us to pay off 72% of our biggest debt left!!

We should be able to finish that off by mid-April and then start work on my student loans which should take 2 – 3 months (perhaps less once we figure out exactly what our new salaries will be and if my husband works any overtime).  What a nice sureprise!  I feel like money just magically appeared this month!  (Haha, wouldn't that be nice?)

Meeting with our investment advisor tomorrow for the first time — I'm really curious to hear what she suggests for us.

Matt — that is definitely something people need to be careful about!  We use our checking account for all of our transactions and we have a savings account that we use for our monthly savings for those expenses that come up once per year.  Using your savings allocation tab of our financial spreadsheet, I made sure all of the numbers matched up.  

I thought of big expenses we've had recently to make sure I didn't transfer money from savings to checking and forgot to put the money towards the payment or something but I couldn't find any evidence of something like that.  But we did discuss the possibility that there is something I overlooked and agreed that we will put all of the 'extra' money towards our debt because we have the safety net of our emergency fund.  I actually wanted to only put half of this mysterious extra money towards the debt and keep the rest in our account (just in case).  However, my husband pointed out that we already keep a 'buffer' in our checking account and since our goal was to pay off our debt as aggressively as possible, he didn't see the point of keeping any of the mystery money in the account.  He is likely right 

Just made the call to pay off the remainder of my credit line!  Wooohooo!  And now it's down to ONE debt left to pay – student loans.  We are trying to decide what to do about them.  Since I'm in school, they are just sitting there – no interest collection, no payments necessary.  They will stay this way until I'm done my Master's + 6 months (so at least for 2 more years, I figure).  Do we get aggressive and knock those off?  Or do we pay bit by bit over the next 2 years?  I'm tempted to just pay them off while we are on a roll and so that we can REALLY be debt free (except for our house).

We've recently been blessed with some financial…luck? karma?   

First of all, I'm getting a nice tax refund this year.  I know that it's not good that I'm getting a semi-significant chunk of money back but I think it's because I get some tax breaks for being a student again (since last year and the year before I got next to nothing and the only thing that really changed is that I went back to school).

Second of all, I was due for a raise (overdue, actually).  I kept following up to see when it would come into effect and I kept being reassured that it would be soon.  Well, it turns out that there was some confusion as to how much I'd be getting (some communication issues between levels of management).  Finally, my boss worked it out for me and I'm getting advanced to the next level of pay a year early!  This is great financially but also boosted my morale at work – it says to me that they value me and my work.  I'm so thankful.  Plus, since I was overdue, I'm getting a bit of retroactive pay as part of my raise will be backdated!  

It's funny how, when you stay dedicated to and focused on something, it all starts to fall into place!