In May 2013, my dearly beloved opened a credit card account with the Commonwealth Bank of Australia.
The primary point of this credit card was for “emergencies”. At the time, we didn’t have an emergency fund. In fact, we didn’t have any savings. So, it seemed logical, and rather responsible, to have some kind of easy access emergency fund.
This worked well for a little while and the credit card just sat in my beloved’s wallet collecting dust. However, this didn’t last long.
You see, the problem with having a shiny card with a $6000 limit in your wallet is that it’s hard not to use. Somehow, credit becomes cash in your mind and you forget that you don’t actually have that money at all.
A compounding problem
Our credit card debt didn’t really pick up until we were engaged and planning our wedding. For those of you that have been married, you’d be well aware that weddings are crazy expensive… Just mention the word “wedding” and I swear everything becomes 3 times more expensive!
At the time of our wedding, we were okay with putting a couple of thousand dollars on our credit card to be able to cover a few of the expenses. After all, our plan was to pay it off over the next few months anyway.
However, a couple of months after we got married, my beloved received a job offer about 800km away from home. It was one of those ‘too good to turn down’ opportunities as we knew it would kickstart her career. So, she said yes.
At the time, the plan was for me to try to get a job in the same location and for us to relocate permanently. We thought this would take no longer than 3 months. However, things didn’t go to plan and I didn’t get a job in the same location. So, we lived separate lives for 11 months.
What we discovered during this period was that not only does a long-distance marriage suck from a relationship perspective, but it mega sucks from a financial perspective. We went from having one lot of rent, electricity, internet and travel costs, to having two of these. So, we essentially doubled our living expenses.
During this time we had very little spare money after our living expenses were covered. In fact, during many of my pay cycles I couldn’t even afford to buy myself one beer to enjoy on a Friday night as a reward for my week of work.
During this time, our daily expenses often exceeded our income, so we put a few things here and there on the credit card. We went from having $2000 of credit card debt after our wedding, to over $5000 a year later.
Adjusting to having money again
In November of 2015, my beloved obtained a job back in our home city of Brisbane and moved home the following month. This meant that we were back to having only one lot of costs again… Which meant, we had money to spare.
As we had spent our first year of marriage separated and broke, we took advantage of our new found ‘fortune’ and enjoyed ourselves as much as possible. This lead to some pretty serious Lifestyle Creep.
During this time, we weren’t putting extra debt on the credit card, but we weren’t really paying it off either. So we held onto the $5000 debt for about a year before paying it down to $4000.
We then bought our first house and were not in a position to save or pay off debt. In fact, it took us about 6 months to adjust to being home owners financially, at which time we slowly paid our credit card debt down to $3000 in September of 2017.
In January of this year, I made the New Year’s Resolution to pay off our high interest debt by the end of the year. This included our car loan and credit card debt, of which we had just over $13,000 left in total.
We decided to focus on our car loan first as I could no longer handle paying an exorbitant amount of interest on a depreciating asset. So, with heads down and bums up, we got in and tackled this debt, and finished paying it off in June.
After this, we decided it was action time on the credit card. So, we started putting any extra funds we had onto this debt. We also decided that our tax returns would go straight onto this debt this year, rather than helping fund a holiday.
On the 11th of September we received our tax returns back and decided it was time to kill off the credit card debt once and for all.
We had just over $1000 of debt left. So, we swiftly transferred our tax returns and part of our pays onto the card to pay it off. My beloved then removed the card from her wallet and set about getting rid of it.
The credit card and car loan were our only high interest debts. Consequently, the only interest bearing debts we now have left are our HECs debts and mortgage.
Once we have higher savings and emergency funds, I’d like to start paying more off my HECs debt.
Perhaps this can be a New Years Resolution for 2019. But for now, paying off our credit card debt in full is another 2018 resolution achieved successfully.
To summarise… I’m so excited and I just can’t hide it!