After Their Wedding, The Spending Hit Home

Kim and George Colon racked up a lot of debt after their marriage in August.
Kim and George Colon racked up a lot of debt after their marriage in August. (By Giuliana Nakashima -- The Washington Post)
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Profiles by Michelle Singletary with contributions by research assistant Charity Brown
Sunday, February 17, 2008

Age: George is 52; Kim is 43.

Background: The newlyweds live in Dumfries and have been married for about six months. They share their home with Kim's 19-year-old daughter. George served in the Army for 22 years before retiring as sergeant first class. He now works as a contract manager for a security company in the District. Kim is a senior master sergeant in the Air Force. She's been in the military for almost 20 years.

Financial situation: Together the couple earn $191,000. Despite their high income, they only have about $1,000 in emergency savings.

They do, however, have three homes, including their primary residence in Virginia. George receives a pension of about $19,000 a year from his service in the Army. He has no other retirement savings. Kim has about $40,000 invested in the federal Thrift Savings Plan and $10,000 in an individual retirement account. She will be eligible for a pension once she retires.

My concern about this couple is their debt load. They owe a little more than $30,000 on eight credit accounts, including a line of credit. Kim has accumulated $40,000 in student loan debt while working on a doctorate.

The Col¿ns acquired a lot of the consumer debt after their wedding.

"My husband and I have bought a massive amount of material items since we got together, mainly for our townhome," Kim said.

The purchases started with $2,700 for blinds, then $2,800 for a washer and dryer, then $4,000 on an entertainment center. The spending got so high that Kim siphoned $8,000 from her student loan money to pay down their American Express bill.

"I am in a constant state of stress," Kim said.

Haunting George is an outstanding federal tax bill of $11,770 and a state tax debt of $3,368. The longer he has that debt, the more interest and penalties will accrue.

Their New Year's resolutions: The couple desperately want to stop living paycheck to paycheck, especially since they earn so much.

They've resolved to pay off the tax and consumer debts and build up an emergency fund. George wants to supplement his Army pension with more retirement savings. They also want to honeymoon in Puerto Rico as well as buy a home with a garage.

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