Twyla and Todd have been married for nine months—but they say they're already in trouble. Although they make about $82,000 a year between the two of them, they're almost $50,000 in debt.
They say their troubles began after they charged most of their $22,000 dream wedding on credit cards. Not only did they have a beach wedding in Mexico, they flew some guests down, paid for their hotel rooms and spa treatments, served lobster and filet mignon, had an open bar—and followed it up later with a reception in Texas!

Two months after the wedding, Twyla discovered Todd had put $10,000 of the wedding expenses on his company credit card, and risked losing his job if it was not paid off immediately. "I don't understand how he could be so irresponsible," Twyla says. "I value our marriage, and I don't want anything to happen…but the financial situation makes it very difficult."

Expert Advice
Financial expert David Bach says the first thing every couple must do is to recognize and focus on the truth, and to stop beating each other up verbally. "You started your marriage in a financial hole because you had a rock-star wedding that you could not afford…You had a lobster wedding on a tuna-fish budget. That is the honest-to-God truth."

David says there is hope for Twyla and Todd to not only get out of debt, but to also save money for the future.

1. First, David advises them to pay yourself first"—before the government, before rent, before credit cards—by taking at the very least the first hour of income that they earn during the day and putting that it into a pre-tax retirement account. While Twyla and Todd already contribute to their 401k plans, David advises them to increase their contributions by $10/day. By adding this much, and assuming an average of a 10% return, they can have $2.9 million in 35 years. The key is that the money must automatically come out of their paychecks, without them touching it.

2. David also tells the couple to add an extra $10 a day to their credit card payments. If Twyla and Todd continue to pay just the minimum on their debt, they will not only end up paying for the next 50 years, they'll be paying $55,000 in interest, on top of their debt! "You'll never get out of this its financial quicksand," he says. By adding just $10 a day, they'll be out of debt in less than four years.

3. To help the couple find the extra $20 a day, David took a look at their "latte factor"—the idea that we spend a small amount of money on little things, such as coffee or cigarettes. In Twyla and Todd's case, about $526 a month was going to cable TV, cell phones, an unused motorcycle and organic groceries. "It may not be fun to give [them] up, but for the next year you need to give it up so you can get out of this financial hole," David says.

4. Lastly, David points out Todd's biggest mistake—using money from his 401k plan to pay for Twyla's engagement ring. If left alone, the $9,000 Todd borrowed out of his 401k plan could have grown to be $300,000 in 35 years. David says, don't take money out of your retirement account unless you have an emergency health issue. The only other reason to take it out is to buy a first home, and that would be borrowing out—not taking it out.


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