How This Couple Paid Off Debt and Saved $10K After Hitting Rock Bottom
In 2013, the apartment Tyler Philbrook shared with his wife, Ashley, started to flood from the vacant unit upstairs.
He called his landlord, who told him to rent the equipment to fix it and take it off the next month’s rent. The cost was $50, and he didn’t have it.
Their credit cards were maxed out. He didn’t have $50 in the bank to stop the flooding.
Standing in Home Depot with only minutes before closing, he called family and friends and begged them for money to stop his possessions from being destroyed.
“My dad came through and paid with a Home Depot credit card, which was the only kind of credit card they would take over the phone,” he said.
Fast forward to the end of 2018: Tyler and Ashley have paid off $6,000 of the $25,000-plus they had in credit card and student loan debt, and put away over $10,000 in savings.
But those financial accomplishments didn’t happen immediately. It took another financial rock bottom for the couple to finally start working together to solve their spending problem.
Why They Got Into Debt
Tyler, an advertising manager, and Ashley, a restaurant server, married in February 2012. A short time later, Ashley became unemployed for a month.
“We started putting a bunch of things on credit cards then, [but] that wasn’t the problem,” Tyler said.” “The problem was then we’d get used to putting things on the credit card. And so it kind of built these bad habits.”
They refinanced their debt in 2015, but they didn’t change their habits. They ended up with even more debt.
Tyler watched as they slipped deeper and deeper into their financial mess. He tried to budget, but Ashley didn’t share his concern about their personal finances.
“I thought [he was] trying to be controlling over me and the money I spend,” she said.
The tension reached a head at the end of 2017. That’s when Tyler put Ashley in charge of the finances.
At first, she was against it. But when she realized she could finally spend without recourse, she embraced it. And at the end of the month, there was no money left for rent.
Unbeknownst to her, Tyler had set aside about two to three months of expenses in an account he didn’t tell Ashley about. So when Ashley asked for help, he was able to pull from that account to pay their bills.
The next month, she shopped more, and again, they didn’t have enough for rent. But this time, she came to Tyler and confessed there was a problem. For the first time, she was on board with fixing it.
“Those two months were very expensive months for me,” Tyler said. “It wasn’t like I wasn’t looking at the finances. I was seeing it, [and] I was cringing the whole time.”
It was a rough time for Ashley, too. She realized she’d been blocking out the effect her spending had. Being confronted with it was humbling. “I didn’t like being wrong,” she said.
But those costly two months were worth it. For the first time in their marriage, they were on the same page about finances.
So, Where Was Their Money Going?
The couple brings in around $60,000 combined, so they don’t have a lot of disposable income every month.
Tyler thought they stuck to a budget pretty well and that they weren’t making expensive purchases. But still, they somehow found themselves living paycheck to paycheck.
To find more money to pay off their debt, they first needed to understand where their money was going.
Tyler created an Excel spreadsheet. After tracking all their individual purchases on the spreadsheet, he learned a hard lesson: “We were spending way more on things that we didn’t realize,” he said.
The $200 monthly grocery budget they thought they stuck to? It was closer to $800, because they weren’t tracking the extra trips to pick up random items. Plus, they were spending way more on eating out than they thought.
Tyler and Ashley got a budgeting journal to help them stay on top of their daily transactions. It helped them identify where they were overspending.
The journal has drastically cut how much they spend, especially on eating out.
Now, because Tyler loves the show “Chopped,” Ashley will often pull items out of the pantry and challenge him to make dinner with them. “[It’s] been really great, because she usually picks stuff that we’ve been avoiding making something with,” he said.
Making lunch at home has saved them a lot, too. They still go out occasionally or fall back on ordering a pizza on busy nights. But because they have a budget, they can see as soon as those indulgences get out of hand.
How They’re Keeping Their Spending in Check
Ashley is still in charge of paying the bills.
She even did a saving challenge in 2018 to contribute to their debt payoff. She saved almost $1,400 over 52 weeks.
“Going from someone who’s overspending by $1,400 a month to saving and then, you know, paying off debt in one big chunk… that was huge,” Tyler said.
With their spending in check, they’re making headway on paying off debt.
They refinanced their debt again, though they hesitated at first. But once they knew they’d both changed their habits, they did so using their car as collateral. They were able to consolidate $25,000 of credit card debt — some of which had a 23% interest rate — down to 4% interest.
They now have less than $16,000 left on their consolidation loan and $3,400 left on Ashley’s student loans. Tyler now documents their debt-free journey on his blog, I Am the Future Me.
Their goal is to be debt-free by the end of 2019 so they can volunteer overseas full time in 2020. And at this rate, they’ll be able to afford it — by working together.
Jen Smith is a former staff writer at The Penny Hoarder.