I received a question that I wanted to share my thoughts on:
My husband and I have around $50,000 of credit card debt. We have been married for 5 years. The only other debt is the house. Our household income is $95,000. My husband handles all of our finances and according to his plan we will have this paid of in approximately 4 years. Is this a reasonable amount of time?
First I just wanted to say that it is great that you both no longer want to be in a mess financially. Proverbs 27:12 says the rich rule over the poor and the borrower becomes the lender’s slave. Meaning I know the emotional burden, stress, pressure that this entails (similar emotions of being in slavery according to scripture) so I am thrilled that you guys want OUT!
You said that your husband handles all the finances and without knowing details it would be irresponsible for me to assume anything. Both of you need to be handling the finances, as a team. It is not a one man show, both of you have an equal vote. The two of you should sit down once a month and make a BUDGET and tell every dollar what to do before the month begins. You don’t have to be the one writing the checks but you both have to be in agreement with where your money goes.
To answer your question it should take you much less than 4 years to get rid of that $50,000 of credit card debt.
The average household income is normally around $40,000 a year. You guys make way more than that! It shouldn’t be a problem to downsize your lifestyle for the next couple years while you pay off that amount.
This is very doable. What I recommend you do is order those credit card balances from smallest to largest. Then pay all minimum payments expect on the little one. Then attack the little one with everything you’ve got and eliminate it. Cross it off the list and move on to the next one with all the firepower before but now it picked up a little more steam with the minimum payment you were paying on it before.
You should be crossing stuff off the list with a rapid pace and this will give you guys the intensity you need. This is referred to the debt snowball method. I will explain it more in detail tomorrow.
