My husband had more money but I had better credit: Here’s how we evened the odds
Which is harder building credit from scratch or savings from zero? It depends...
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I’ll be honest, my marriage/relationship is far from perfect. My husband and I have known each other for 11 years, been together for 9 years, and married for almost 2 years. We met when we had just turned 19 and didn’t start dating until we were 21. We’ve argued about a lot of things, but the one thing we haven’t ever fought about? Money.
But that’s not because we see eye to eye on everything. We actually have very different views on money. I’m much more aggressive, generous and opportunistic and he’s much more cautious and wary. I’m a dreamer, he’s a doer. He’s a great saver and I’m a great… deal hunter.
You would think that would lead to a lot of fights about money but it never has. A lot of that comes down to respecting each other’s knowledge and strengths with money which was founded in one of our very first outings as a couple…
How a trip to Chipotle forced us to be fully-transparent about our money habits
It was a sunny Sunday of summer 2011. My husband (then boyfriend) and I had just started dating and were on our way to lunch at Chipotle when he told me he wouldn’t have enough money to cover the meal.
My first thought was something like “you invited me to Chipotle and now I have to pay for us?” as the song Scrubs by TLC started playing in my head.
He quickly clarified that he meant he had enough money for his meal but not to pay for mine, something he felt bad about but asked if he could “get me back” the following week.
I’m a modern, self-sufficient woman and didn’t mind splitting the bill at all. However, out of curiosity, I asked him “How much money DO you have?” To which he replied, “eight dollars.”
“TO YOUR NAME??” I exclaimed.
(As you can guess from the title of this article, he had more than $8 to his name.)
After he was done laughing he explained he only had that much cash and the bank wasn’t open on Sunday.
As it turned out, he didn’t have a credit card or even a debit card. This young man was cash only, and, honestly, I admired that. What he did have was five figures safely saved away from a job he’d had since he was 16 years old. And, no, he had never heard of the envelope method or Dave Ramsey.
Having no money was nothing new to me
Something I want to point out about this conversation is the fact that I could fully comprehend the reality of someone having only $8 to their name. That’s because being that broke was a reality I was all too familiar with up to that point during college.
While that may make me look like I was bad with money, the truth is it’s pretty impossible to be good with money when you don’t have a job or steady income—especially when everyone around you does have money and lots of it.
What I did have going for me was an excellent credit score. At 18, I had opened an account and credit card so, by 21, my credit score was above 700. This card helped me survive college during those $8 net worth times. But it was the first bill I paid when my student loans came through. Who needs textbooks anyway, right?
Building a life and learning how to be financially responsible after college
Contrary to what many people will tell you about relationships, being good at different things doesn’t necessarily mean you should stay in your respective lanes of strength. We wouldn’t have gotten to where we are today if my husband did all the saving but never built his credit or if I grew my credit score higher and higher but didn’t save a dime.
What we did in our first years as a couple—which also happened to be our first years as independent adults—was help each other grow up in countless ways. For the sake of this article, let’s look at how we “grew up” financially.
Building my savings was pretty straightforward
For me, “growing up” financially meant being more disciplined and structured. I had held down jobs throughout high school and college and by the end of my senior year, I was able to fully support myself financially and cover all of my expenses plus start saving some money!
My savings planning wasn’t rocket science but it did involve a few hacks
In a lot of ways, just having a job made it easy for me to become a good saver but there were a few changes I made to keep myself on track:
- Having my paychecks directly deposited into my savings account, not my checking
- Using a budget spreadsheet and taking the time to go through exactly how much income I had, how many expenses I needed to cover, and how much I’d have left over
- Setting savings goals and tracking them on separate spreadsheets
- Following the 50/30/20 rule:
Spend 50% of your income on living necessities (housing, food and health), spend 30% on fun (going out, vacations, entertainment), and save the remaining 20%.
The thing that helped me the most when it came to budgeting and saving was making it a positive experience. Understanding your money and seeing your savings grow is empowering. Having fun goals and watching my vision for our future become reality made it all worthwhile.
Building credit starting from scratch as a post-grad on the other hand, took time
For my husband, “growing up” financially required a bit more research, strategy, and patience to build his credit score. Not everyone starts with the same credit score. Luckily, because he had a job and some stellar financial habits, his credit score didn’t start at zero (which doesn’t exist) or even at the bottom of the credit range (300).
Here are a few things that help you have decent credit even if you’re just starting out:
- Employment (having a job already signals to creditors you have money)
- Student loans (a manageable amount of this type of college debt can help your credit)
- Becoming an authorized user on someone else’s credit card (this shows creditors that someone else trusts you with their credit liability—a financially secure relative is a great option)
This is what helped my husband through his first phase of having excellent credit. At this point, we were able to buy a house based on our combined credit scores, savings, and solid debt-to-income ratio.
For phase two of building his credit, he needed to be a bit more active. He did a lot of research to figure this out and sought out advice. Some advice was good—credit card suggestions and recommendations. Other advice on building excellent credit was a little out of our comfort zone—such as taking out a personal loan to build credit. Ultimately, here’s what he did to get his credit score to excellent status:
- Getting the right credit card (It pays to shop around and look for options with zero interest for the first 12 or 15 months)
- Ramp up credit usage (using your credit card for monthly expenses, online spending, and big purchases can fast track your credit score)
- Paying balances down to keep usage under 30% each month (this signals to credit bureaus you’re not spending outside of your means)
Right away, he started using this credit card for big purchases we already had saved for in our budget including the majority of our wedding expenses and a few home renovations. Each month, he was able to pay off most of those large bills and carry a small balance over at zero interest.
Your contributions in your marriage should be equal, not identical
In many ways, I feel like the people you absorb into your life—mainly significant others and close friends—are the people you’re meant to learn the most from. In this case, my husband and I became more well-rounded in our pursuit of wealth because of each other.
- I learned the value of saving and having a nest egg
- He learned that credit cards can be a great financial tool when used responsibly
Knowing what we both know now, I’m sure we’d each go back and think about our money differently but I’m glad we shared the experience. Helping each other grow financially has set our foundation for learning together as we continue building our financial future as a couple.