New Marriage Thrives 

How tightening the purse strings secures the future.

by Thomas Litchford

Danielle and I started life together approximately $50,000 in debt.  About $30,000 of that consisted of student loans.  The other $20,000 belonged to credit cards.  There are a lot of things on which I could blame this situation – inexperience, aggressive credit card marketing, high tuition – but at the center of them all is a grand illusion we’ve all faced and believed in at one time or another.  This is the illusion of the Money Tree.

“Money trees” come in many forms: a new, steady paycheck for the newly enlisted or commissioned; a reenlistment/commitment bonus; tax-free pay; hazardous duty pay; a spouse’s new job; or a pay raise.  Essentially, anything that represents the promise of more money arriving at some future date is a money tree.  I think the most seductive of these is the New Paycheck.  Here’s why: when you’re just starting out in life, and you’ve never had a sizeable steady income, it’s hard to imagine what it will be like to suddenly be able to count on that much money. 

For Danielle and me, these fantasies started in our last two years of college.  We were about to become adults and make real money, and we would no longer have to scrimp and save to get by on our loans and our part-time jobs.  The more we fantasized, the more difficult it was to wait for our money tree to sprout.

So we fertilized it.

We started using our credit cards to pay for things more and more often, and we stopped worrying about whether we could pay the whole balance at the end of the month.  In our imagination, Danielle’s bimonthly paycheck would be so big that we’d be able to pay off the balance in no time.  But that paycheck was two years off, and we underestimated the amount of debt we would accrue as we continued living the kind of lifestyle we got used to by using our credit cards.

The danger, of course, is that once you fertilize your money tree, the temptation to do so will be there again and again, even after your tree is sprouting regularly.  It doesn’t take long for the soil to get exhausted.  Your tree won’t even produce enough money to buy the fertilizer.

In our quest to keep our tree alive, we threw all the money we could at our debt, including a sizeable chunk of our wedding gift money.  We also did the Credit Card Balance Refinancing Shuffle, moving the debt from one credit card to another and another.  But the balances remained.

Ultimately, the only way we could save our little tree was to stop fertilizing it.  The hard advice to follow was the only advice that worked for us: cut up your credit cards.  We saved one card for emergencies, but that was it.  We created a budget we could both agree on, and we stuck to it (for the most part).  We kept each other pretty honest, and we paid down our balances as aggressively as we could.  At the time, I didn’t make much money, but we designed our budget so that we used Danielle’s income for day-to-day expenses and paid off the debt with mine.  Within a year, we had no credit card debt.

Now we only use credit cards on very rare occasions.  We budget our expenses and plan for big purchases so we can pay for them immediately.  Whether you’re in the enlisted or officer community, this is the only way to keep your money tree healthy.  Over time, it will grow, but trying to speed up this growth with fertilizer is just likely to kill it.