- Alli Williams, age 29, took on $154,000 of her husband's debt when they combined finances two years ago.
- Since then they've paid off $50,000 of the debt, including an auto loan, some student loans, and a credit card.
- They also paid for a wedding and college tuition and saved for a baby and a house.
- Williams doesn't believe in a bare-bones budget, but instead prioritizing expenses, such as bonding activities and savings goals.
Defying conventional dating rules, Alli Williams brought up money with her now husband on their third or fourth date.
She soon found out he had about $154,000 in debt, mostly from student loans. That amount was "shocking" at first, Williams said, but she was more interested in sussing out whether they could get, and stay, on the same page financially.
"People think what's weird is I never cared necessarily how much debt he had," said Williams, who is a financial coach. "It was more, 'Can we work this out together?' Because I think
The couple got engaged and combined their finances in December 2018, marking the beginning of their debt-free journey, she said.
"My philosophy as a financial coach is, I don't believe in deprivation, I don't believe in the bare-bones budgeting and having to cut everything," Williams said.
"I don't think it's sustainable, especially for millennials," she went on. "Who wants to cut everything they enjoy from their budget to pay off student-loan debt? No one wants to do that, and I don't think you have to do that."
Ambitious savings goals and loads of debt: a balancing act
In 2019 the Williamses paid off $36,000 in debt, including student loans and a credit card, and paid for about 95% of their wedding using savings and income. The rest came from family members.
This year they're putting $1,500 a month toward debt, while paying 0% interest on their federal student loans, thanks to government relief. They're also funneling money toward multiple savings goals, including a down payment. In October they made the last payment on a $13,000 auto loan.
Neither Williams nor her husband - who's in school to get his associate degree in mechatronics - earns a six-figure income on their own, she said.
Here are three strategies they're using to pay off their remaining debt without giving up their financial goals:
1. They make room in their budget for personal priorities.
Williams and her husband always make at least the minimum payment toward their debt. They put their leftover money toward expenses, savings goals, and a few nonnegotiables.
Williams is an alum of the University of South Carolina and a huge football fan. She has season tickets and doesn't plan on cutting them out of their budget anytime soon. Experiencing game day with her family and friends is worth it, she said, "even if it adds a month to our debt journey." They also prioritize date nights.
To maintain some independence, Williams said, the couple has separate spending accounts funded with $75 a month. It's "no-questions-asked money" they can use however they want.
"The amount may seem small to some, but it's what works for us right now, and of course one day we will get to increase that," she said. For more expensive purchases, they decide together whether it deserves a spot in their budget or might require its own sinking fund.
And to avoid adding to their student-loan debt, they will have paid a total of $14,000 out-of-pocket for Williams' husband's school tuition by next spring.
There are of course some sacrifices they make to free up cash for these expenses. They live in a 700-square-foot home in a low-cost area, don't have cable, share the cost of streaming subscriptions with family members, rarely buy beauty products or clothes, and don't exchange Christmas gifts - they celebrate birthdays instead.
2. They transfer money to savings and debt from each paycheck.
Williams' husband gets paid weekly and she gets paid twice monthly. Transfers to their debt balances and savings accounts are made from each paycheck, instead of on a monthly schedule.
"We make transfers all the time now because I need that money out of my account," Williams said. "Literally I'll get paid, and within 15 minutes everything is sent back out of the account."
When the money is out of sight, there's no temptation to spend it frivolously, she said.
The transfers don't go to the same place every month. Williams is constantly revising their goals to make sure they reflect the couple's current situation and priorities.
"That flexibility is key," she said, adding that her husband was out of a job for six weeks during the pandemic, but they shifted to an emergency-plan budget and didn't have to scramble to pay bills.
3. They set allocation limits for every windfall.
Williams has another trick for making sure the money coming into their accounts ends up in the right place: They set specific allocation limits for windfalls. This includes income from a tax refund, wedding gift, birthday money, or a bonus.
"I'll set percentages without knowing the amount," she said. Usually 50% will go toward debt, another 20% will go toward a savings goal, and so on. When the money hits their account, she applies the framework so that there's no time to linger over the dollar amounts.
This year these strategies have helped the couple save $7,500 for the arrival of their first child, in October, add at least $200 a month to sinking funds (for repairs and pet expenses), and save up to $1,000 a month toward a down payment on a home.
And when a pet emergency came up, a savings cushion enabled them to make decisions based not on cost but on what would be best for their pet.
"That's what I want everyone to experience," Williams said, taking money out of the decision wherever possible and making it based solely on "what's best for you emotionally or mentally or physically."