I am an extremely frugal person and I was brought up this way. I have been dating someone for the past six years with severe spending problems and debt, that I had no idea about, up until we moved in together December 2015. I did not know that he was able to "afford" the majority of things he had by taking out student loans and credit cards. Since he has always made the minimum payments, he has fantastic credit (Meanwhile having to pay thousands extra to cover the interest alone...)!
It's been hell, but it's finally over.
I don't want to make this post about our relationship though. I want this post to be about the changes he's been continuously making to change his spending habits and pay off debt. Over-spending is like an addiction. Shopping can be an addiction. Getting your priorities straightened out and understanding why you are spending money is key. Live within your means.
At least $10,000 in credit card debt, and $25,000 of student loan debt has been paid off.
Time it took: December 2015 - April 2018.
(His pay is $20/hour so his take home pay is around $2500 a month, works in IT.)
Here are what I would say are the top 10 bad habits he had:
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Taking out student loans to pay for whatever the hell he wants despite his government job offering 75% tuition reimbursement.
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Opening new credit cards and only paying the minimum required payment + constantly deferring student loan payments by only taking one class per term.
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Buying bulk foods from Costco, 90% of which has been in the freezer and pantry for SEVERAL YEARS past best/sell by date.
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Eating out at restaurants and fast food places several times a week rather than eating what is already available.
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Going out to see movies on a regular basis and buying their overpriced condiments - or going out anywhere like strip clubs and bars.
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Buying the latest and greatest items without ever getting rid of or trying to sell back older gadgets. Shell out several hundred for a brand new Samsung Galaxy Note whatever when he just bought the previous version a year ago.
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Shopping at Fred Meyers and Bed Bath & Beyond for everything rather than salvage grocery stores or Winco/Walmart. AKA never "shopping around" and paying full price for everything he buys.
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Not only buying things that he doesn't NEED, but things that he buys and never even uses. I can't tell you how many brand new CDs he's never listened to and games he's never played let alone opened.
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Never negotiating prices on plans, whether it being TV, Internet, or phone plans.
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Going on a dream vacation to Japan via his student loan money. Also applies to any anime conventions he would go to on the west coast.
Not all of these habits are bad, but these are ultimately the things that drained his money. It's okay to spend money. It is one thing if you can afford it, but another if you are taking out loans and lines of credit to pay for it. He has a $10,000 (yes TEN THOUSAND) dollar TV he took out a loan to pay for. I want to say he has spent around $20,000 on his Japanese music, anime, manga, fanart, figure collection.
Here is what we have done:
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Get priorities straightened out. Talk about life goals. Talk about what's important. What's okay spending money on. What's worth spending money on. What do we actually need vs. what we want - he had issues understanding the difference.
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Start making payments. I mean REAL payments. He was now contributing at least $1,000 a month every month on his debt rather than the <$100. First paid off credit cards, and then student loans.
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Get a cheaper apartment. We now live in a cheap ($1200 including utilities) apartment is a terrible neighborhood filled with crime, but at least it's cheap here. Cost of living is high here and $1200 is very cheap. We will be saving for a house, so the current situation isn't permanent.
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Eat all of the food he already had, even if it means bland shitty meals. Almost all freezer food had been blackened with burns so we threw it out. Canned food that had expiration dates from early 2000s? Open and smell test. Dry foods? Stale, but not poisonous.
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Start getting rid of his stuff. He was not a hoarder in that he was messy. Rather, he had dozens of storage bins filled with what I would call garbage. Receipts from 2000-2010, checkbooks from banks that don't exist anymore, garbage magazines and old mail. We are talking about someone who would just put everything in storage bins (minus actual garbage like food).
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We don't go out on dates/We don't do any social activities that cost money. We are both introverted people who like to play video games and watch anime. Why not watch/play what we already have, or what's available for free?
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Go to places that are cheap to buy things. Instead of Fred Meyers, go to Grocery Outlet or a different salvage grocery store. Instead of going to Bed Bath & Beyond, go to places like TJ Maxx, Ross, Tuesday Morning, or Walmart. We have easily saved thousands by going to these places rather than Fred Meyers or Bed Bath & Beyond for the same stuff.
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Going from a $100+/month unlimited phone plan to $30 a month using a VOIP service like TextNow, not buying cable/Netflix/Hulu, and negotiating Internet Service Plans from $100+/month to $40/month.
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Begin selling off his stuff he will never use again. Electronics, music, anime, manga, figures, etc. I am sure some people out there would find value in those things, or are collectors.
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Save money. This is something that he has never done because he's all about spending and taking out loans and lines of credit.
We never saw any therapists or financial advisers for help on this. To me, all of this was common sense. I paid my way through school with zero debt. I lived my college years with nearly no social life and ate microwave dinners and top ramen. I offered to pay off all of his debt with money I have saved up, but he refused. He wanted to change. I didn't make him change. He put in the work. I only motivated him.
We had some road bumps along the way:
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His first vehicle's head gaskets blew out ($1,000). A week later, transmission went out ($3,000) - we got $500 for selling the car AS-IS.
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Bought a used Toyota SUV and a month later needed engine work ($3,000). Paid it. A year later, transmission went out ($3,000). We sold the car AS-IS for $1,000.
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Participated in sleep study and he was diagnosed with severe sleep apnea (50+ AHI, meaning he stops breathing in his sleep 50 times an hour on average). Got a CPAP, medical expenses were $2,000+.
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Our cat began having problems. We spent about $1,000 on her to keep her alive for two more weeks but the issue did not get better and we put her to sleep.
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Owing more taxes ($1,500) due to him getting bumped up into a higher tax bracket after getting a new job with slightly higher pay.
My personal advice:
What are you saving money for? House, retirement, etc...? Understand it's okay to spend money on things. Moderation is key, but get your priorities straightened out! Figure out where your money is going and how you're spending it. Keep an excel spreadsheet or get a journal to write down your monthly spending. Think about the things you regularly buy - Do you really need it or just want it, how long will it last, can you get it somewhere cheaper, will you actually use it or will it just be sitting somewhere gathering dust?
Thanks for reading and I hoped this helped someone!
April 28, 2018 at 06:34PM
