Friday, July 13, 2012
Newlywed Finances: The Misconceptions We Had About Money
Payments are a way of life.
When we first got married, we had a good chunk of credit card and student loan debt. Each month, we paid the minimum payment and went on our way. This is just what you do, right? Pay the payments until one day the loans disappear. What I hadn't realized was that we could pay more each month, get out of debt early, have more disposable income each month, and save a load on interest. I hadn't realized that we were in control of how long we had to be, as Dave Ramsey would put it via Scripture, "slave to the lender."
Credit cards are a necessity.
I'd been taught for so long that using credit cards would build up my credit score, and that having a high credit score was the only way we could make it in the world. The companies lured us in with their rewards and points programs, and we put all of our monthly purchases on a card. This is just what you do, right? You swipe your card to buy things. If you want it now but don't have the cash, you just pay later. It turns out, it's quite possible to live without a credit card. We now put most of our monthly budget items in cash envelopes and use our debit cards and bank account transfers for the rest. If we can't afford it, we don't buy it. No more credit. Dave Ramsey calls credit scores "I Love Debt" scores. They reward you for having debt and are just used to help you go into more debt. Well from now on, we're buying things in cash, so guess what? No need for a credit score.
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