Like many Americans, Ashley and Brandon turned to a debt consolidation company to help them get their growing credit card debt under control. Unfortunately, the consolidation led them to accumulate even more debt.
“We took out a debt consolidation loan, paid off our credit cards, and then maxed out our credit cards again,” Ashley said on Ramit Sethi’s podcast. I will teach you to become rich“I mean every single one of them.”
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In total, her credit card debt alone amounts to over $100,000, which is less than half of her total debt load.
The couple’s story illustrates the devastating consequences that a financially unbalanced partnership can have.
Ashley’s disproportionate financial responsibility
Sethi said the couple’s problems stemmed from their inability to agree on family finances.
Ashley earns $95,000 a year gross and is primarily responsible for managing the household budget. Brandon earns $65,000 and admits that he only brings up the subject of money when he wants to buy something.
“Ashley wants to pay off her debt faster and you want to enjoy your life – is that the bottom line?” Sethi asked Brandon, and Brandon agreed. “Guys, this is not a working financial partnership.”
According to a 2023 Pew Research Center report, women were the primary breadwinners in 16% of marriages in the U.S. At the same time, 49% of women said they considered themselves the financial leaders of the household, and 51% said they were more financially savvy than their husbands, according to the 2023 Women Money Power study by Allianz Life Insurance Company of North America.
Couples who struggle to share financial responsibilities run the risk of stretching the family budget in different directions. Brandon’s reckless spending and lack of financial commitment have led to the couple owning too many recreational vehicles: a truck, a snowmobile, a motocross bike, a boat, and an ATV.
“Is this a joke?” Sethi said incredulously.
Brandon’s desire for cars is not unusual. Auto loans have become a larger share of non-housing debt nationwide in recent years. In the second quarter of 2024, auto loans were worth $1.63 trillion – more than total student loan debt, which is $1.58 trillion, according to the Federal Reserve.
The ever-growing mountain of car loans and credit card debt is keeping Ashley and Brandon from making an important life decision: having a child.
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Costs of surrogacy
Part of the couple’s debt is related to a failed surrogacy attempt.
“The money was gone and there was no baby,” Ashley said. “So we pay off the loan and have no baby.”
Despite her disappointment, she added that they are willing to try again. She estimates the process could cost between $20,000 and $40,000.
That’s at the lower end of the expected costs. Stephanie Levich, founder and president of Family Match Consulting, tells Today that the average cost of surrogacy can range from $125,000 to $175,000.
To improve their financial situation, Sethi asked Ashley and Brandon if they wanted to make “no changes, small changes, or really big changes.”
Big changes
Sethi recommended couples therapy to help them come to an agreement about their family’s finances. Nearly half of all couples surveyed by Empower in 2023 said they do not discuss money matters with their spouse. Better communication would lead to better outcomes, according to Sethi. Debt counseling would also help in this case.
The first step is to get rid of the recreational vehicles and lower the monthly payments to make room in the budget for debt repayment. Then use budgeting techniques like the envelope method to keep spending under control. Or you can download a budgeting app with spending alerts.
Meanwhile, Ashley said she feels Brandon needs to take on more responsibility and take a more active role in the couple’s finances.
“I don’t want you to rely on me to make all the money,” she told him. “I don’t expect you to ever make a certain amount, but I also don’t want you to go into any work situation and think, ‘Oh, Ashley will do the work, that’s OK because Ashley makes enough money; I’ll just take a cut because Ashley makes enough.’ I want you to have the ambition to say, ‘I want to do this for my family.'”
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This article is for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.
