How combining finances is helping this couple pay off nearly $300,000 in debt

Josh and Lauren HastingsLauren and Josh Hastings, pictured, combined their debt before they got married.
  • Money is often a source of conflict in a relationship.
  • Josh Hastings, a financial educator and blogger, said combining his debt with his wife Lauren is helping them pay off nearly 300,000 in debt.
  • The debt is actually helping their relationship by forcing them to communicate regularly about their financial future.
  • Visit Business Insider’s homepage for more stories.

Money is often a primary source of conflict within a relationship.

In fact, a 2018 study by Ramsey Solutions found that money is the No. 1 issue couples fight about and the second leading cause of divorce, after infidelity. Two primary causes of money-related stress were high levels of debt and a lack of communication.

In addition, the study found that 86% of couples married five years or less started off in debt.

“Marriage is a serious financial decision that shouldn’t be taken lightly,” Chris Jackson, a financial planner and CEO and founder of Lionshare Partners, told Business Insider. “Your best stance is to talk to your partner about finances before you get married.”

Read more:
8 ways to talk to your partner about money, especially when you just started dating

For example, if the person with the higher amount of debt wants to be a stay-at-home parent, this needs to be communicated immediately, Jackson said.

“The next step is to accept the reality of your debt constraint and hit it dead-on,” he said.

This can mean using the snowball method(tackling the small balance debt first and moving up), using one partner’s entire salary to pay down debt and only live off the other’s salary, using any family gifting to go toward debt, or even moving somewhere with a lower cost of living (such as a place with no state taxes).

We spoke to Josh Hastings, a financial writer who combined his debt with that of his wife Lauren Hastings. Here’s how it’s gone for them so far.

When Josh and Lauren Hastings got married, they had almost $US300,000 in combined debt

When Josh and Lauren Hastings got married about three years ago, Josh had $US21,000 in debt – $US14,000 from student loans, $US5,000 on his car, and $US2,000 on a small personal loan that he used to make a down payment on an investment property.

Meanwhile, Lauren had more than $US276,000 in debt – over $US270,000 from student loans and $US6,000 on her car. Neither of them had credit card debt, as they paid off their cards monthly. They also had $US165,000 to pay toward the townhome Josh already had purchased six years prior.

When they got married, the Hastings decided to combine their debt.

“At first, knowing that she would have student loan debt wasn’t a big deal,” Josh Hastings, a financial educator who runs the personal-finance blog Money Life Wax, told Business Insider. “I was under the impression that, with a doctorate, she would come out making $US125,000 a year.”

However, as their relationship progressed, he said it became more apparent that six figures of student loan debt was going to be a big part of their financial future together.

That debt was initially “a source of friction” in their relationship, he said.

“Having very minimal debt and marrying someone with tons of student loan debt can sometimes make you a bit spiteful,” he said.

Hastings said while he doesn’t recommend refinancing or consolidating debt, he does recommend treating your finances as one: one marriage, one house.

“Ultimately, if you go to buy a car or house together, it is yours – both of yours,” he said. “So once I looked past the student loans, we decided to get serious about paying them off – and now we’re a team.”

The key to paying off their debt was operating on a strict budget

Hastings said that the key to paying off their debt is operating on a pretty strict budget. For instance, he said that when they first got married and went to refinance the townhome that he owned prior to meeting Lauren, their debt-to-income ratio was a little imbalanced. But then they figured out an amount that worked for them to pay toward the student loans each month.

“It worked out that we could live off my salary while using her salary to pay off her student loans,” Hastings said. “So, now that we have paid off so much of the student loan debt and we no longer have car payments, our debt-to-income ratio is in great shape.”

However, Hastings said they are fine-tuning their debt management all the time. For instance, they didn’t refinance their student loans until it was financially advantageous.

“In 2015, we just sort of paid extra here and there,” he said. “Starting in 2016, we started attacking individual loans and saving for our wedding. And in 2017, we started using a home equity line of credit to pay off our student loans so we could get ahead of interest and attack the principal balance quicker.”

Debt has actually helped their relationship

“This might sound crazy, but debt has helped our relationship,” Hastings said. “We work together and communicate regularly about our future.”

As of this writing, the Hastings have $US123,000 left to pay for their student loans, $US9,000 in a home equity line of credit, and $US125,000 remaining on their townhome.

For other couples who want to combine their debt, Hastings suggests seeking out pre-marriage financial counseling.

“When you get married, your partner’s debt is now your debt,” he said. “Before ever tying the knot, make sure that the two of you figure out financial goals – come up with a plan and make sure you both compromise and agree.”

He added that if one person goes into a marriage thinking one thing, while the other thinks something else, it can be a recipe for disaster.

“And if one partner has debt while the other doesn’t, don’t make them feel bad or say things like, ‘Well, it isn’t my debt,'” he said.

“Remember, money and communication are often the root of all issues in a marriage. So my simple mindset was, and still is, ‘Let’s talk about money in our relationship to make sure we are always on the same page.'”

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