When Bill and I got married, we opted to keep our finances separate for a couple of reasons. The first is that, as a non-custodial father, he has child support obligations every month that must be paid. I didn't want my money mixed in to that. The second is that I brought with me a good amount of credit card debt to the marriage, and I didn't want his money mixed in with that. Therefore, we divided up our co-expenses what we both thought was pretty equally, and that has worked pretty well for us.
Last week, Bill took a look at what we were each paying into things and became concerned that he was getting the short end of the stick. When looking at a ration of what he pays to what I pay, compared to what he makes and what I make, he thought that perhaps he was paying more than would be fair considering our original plan. Therefore, yesterday we had a little economic summit to set things straight.
The first thing that happened is that we discovered that we are, in fact, paying the correct amount toward our household expenses. He makes about 40% more than I do and pays about 40% more than I do. The second thing that happened is that we wrote down all of our credit card debt and set a plan for how to deal with it.
I had not ever put a real number on what I owe to credit card companies, although I had an idea in my mind. I also had never told Bill what the true number was, or even a ballpark figure. Because I was so intent on it being my debt for my to deal with, I didn't even want to get into it with him. However, yesterday, we laid it all out on the table. It was an ugly picture, but at least we are on the same page about it now.
I really would like to cash in one some of our home equity and deal with this Right Now. However, everything I have read suggests that option is merely a band-aid and that it is important first to learn to live without credit cards. After all, if you use home equity to pay off debt, what is to stop you from running the debt right back up? Instead, it is best to learn not to incur more debt so that using home equity to pay it off can be more of a solution, as opposed to a temporary fix. Therefore, this year, we will use a snowball method to pay off our smaller debts, while chipping away at the larger ones. And next year, we will look into a home equity loan to pay off some or all of the rest, after having learned to live without credit cards.
Regardless, it feels good to be on the same page and to have a plan with my husband as my partner. This must be what being a grown up feels like...