Money is one topic that Mark and I always struggled to talk about without a truckload of emotion. We come from very different backgrounds in our approach to money and back when we first got together there were a lot of arguments and a lot of tears.
I came into our relationship with a lot of debt including a massive student loan. Mark came into our relationship with no debt and savings.
We could never see ‘eye-to-eye’ about money and often could not even find a safe ‘middle’ ground to discuss money. We tried going to a money manager and we tracked our spending for over a month and we were still no closer to finding a happy medium.
Somewhere along the line we managed to get on-track with money and I reduced my debt.
When I was at university I got a credit card with a $500 limit for emergencies, suffice to say, my credit card was always up at the limit and I only ever paid a very small amount. I had store cards (Farmers was my downfall) and hire purchases etc. Gradually I started to reduce my debt, as I paid one thing off I added that payment to my next debt and so on. I finally started making in-roads on paying my student loan when the government stopped charging interest. Honestly, I make no apology for being glad that my loan was interest free as I paid interest on it for years including while I was studying. I still remember the day that I made my final payment on my loan and the sense of freedom and relief was incredible.
Then I made a huge error and decided to get a credit card with our current bank and get rid of my old one. I remember standing in the kitchen of our first flat when I opened the letter and had a limit of $4000 and Mark told me to reduce it straightway; I did not. I managed to rack up a massive amount of debt on my credit card and was only paying minimal amounts. My boss explained to me that a credit card limit “was not to spend up to” and I realised that I would have to just get rid of the card.
At the start of 2008 (the year we got married) I decided to get a personal loan to consolidate any debt I still had which would also include my credit card debt. This meant a monthly loan repayment, but then I could not spend that money once it had been paid and therefore my debt would reduce. In retrospect, it was not probably not the wisest thing to do in the lead up to our wedding as we were under a huge time constraint to get married and therefore struggled financially. However, I did manage to clear my debt before our wedding.
Since I got rid of my credit card, I have always been reluctant to get another because I felt that I would end up in debt again. We pushed back when the bank offered us credit cards and I made do using my debit card to make online purchases etc. Then 9 years later I had to get a personal credit card for work. I was absolutely petrified! A few weeks ago, I had an epiphany about my credit card and turned to Mark and said “I realise that if I want to buy something on my credit card and I cannot afford to pay it off in full when I get my statement then I probably should not be buying it”. Mark was blown away and so was I. It has only taken me 9 years to be comfortable to use a credit card in the way that I believe it should be used.
Mark and I have come a long way with our finances and are happy with the position that we are in. However, it took us a long time to get where we are!
The things that I would have told me younger self in relation to money:
- Learn to save for things
- Try not to practice emotional spending
- If you cannot pay the amount on your credit card in full then consider whether you need to put that purchase on your card
- Use your student loan wisely
- Sign up to Kiwisaver when it first started instead of listening your husband!
- Always divide the total hire purchase amount by the number of interest free months i.e. do not pay the minimum (I kind of did this)
- Do not get store cards, they are the devil!