Breaking up with your debt is hard to do. So is paying for a wedding. But it’s possible to do both at the same time…without going crazy.
Hmm, not sure about that.
Carmen Perez did it. In under three years. She’s a 32-year-old New Yorker who had big money goals: to pay off $57K of debt from a combo of student loans, credit card debt, and a car loan...and get married without adding to those balances.She started with a mini emergency fund of $1,200 and a budget. If you’ve never made one, try the 50/20/30 rule. It breaks down your take-home pay into three categories: wants, needs, and future goals. Laying it all out can help you decide where to cut back so you can save more and pay off debt faster.Related: How to Save for Emergencies While Paying Off Debt
Talk more about this ‘cutting back’ thing.
Carmen got a roommate to save on rent, meal-prepped to save on food, and cut WAY back on 'wants,' like cable, clothes, gifts, vacations, and nights out. Other savings tips you can try: dial back the data on your phone plan. Uber Pool instead of Uber X’ing it. Stop going to out-of-network ATMs, and save yourself the $5 fee. Little things add up. Related: theSkimm on Last-Minute Travel Without the Spending Hangover
Sounds good...in theory. But how do you actually stick with a new budget?
Carmen used the envelope method...when you set spending limits for every budget category you can pay for in cash. Think: groceries, happy hour, drugstore runs, etc. Label an envelope, add cash, then stop spending when you run out.
Does debt get an envelope?
No, you submit those payments online. But there are other smart ways to organize your debt. Carmen went for the snowball method. That’s when you order your balances from smallest to largest. Knocking out small balances helps you build momentum as you work up to bigger ones. Another option: the avalanche method.
More debt repayment tips, please.
Try to boost your income. Even if you aren’t super entrepreneurial, you probably have something people want...from event planning skills to stuff sitting in your closet that you could resell online. Carmen started a small photography business, which brought in about $3K that she put toward her debt. And whenever she got an extra little something (hi, work bonus), she added that to her payments, too.Lowering the interest rate on your credit card or refinancing your student loans can also help you get to ‘debt-free’ faster.
Didn’t you mention a wedding?
Yep. Carmen and her partner spent about $32K on their wedding. More than their original budget...but a lot less than the avg $44K price tag. They saved money by DIYing centerpieces, negotiating with vendors, and finding a liquor supplier who agreed to accept returns for anything her guests didn’t drink.A few other wedding savings tricks:
Pick a venue that doesn’t make you use their preferred vendors. And ask your friends and family to help out in lieu of a gift. Maybe they have a secret skill. Or know someone who knows someone.
Go for the buffet. When guests serve themselves, you save about $13 a person.
Get married on a Sunday. Or Friday. Or Thursday. There’s a high markup to get married on Saturday.
Goals and prioritizing: name a more iconic duo. When you have a lot on your plate, you may have to make some tough choices. Learning from people who’ve been in your shoes can help. So can a little planning. Pick the strategies that work for you, and stick with them. No matter what comes up. Asking for a Friend videos highlight one woman's story. They do not necessarily reflect theSkimm's point of view.
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