S.O. With High Debt / What to do?

[jmp470]

When I first got married, my wife was about $25K in debt total, CCs, student loans, etc. I remember it to this day, as I got my first bonus that year, which was exactly $25K after taxes and it wiped out my bonus!!

I paid her debt off, and it was emotionally hard to do. However, it was then and is still to this day, the right decision. It set us up on our path to independence and a great financial relationship.

But, in order to do it, I made us combine money into 1 account and go from there. I never liked having separate accounts, even though I understand why people do it. To me, I made the commitment to marry her, for richer or poorer, I might as well knock out the debt...

By combining our finances it made us talk more about what we wanted. It also made us prioritize how we spent our money. This helped us achieve FIRE part 1 by 43 for me and 39 for her.

 

[Oakster]

My Significant Other "SO" and I have moved in together after about 2.5 years of dating. To be more specific, I ended up buying a new home for us to live in together (with my own funds for the down payment, taking out the loan in my name and receiving the deed in my name). We are dating and not married. I've known since early on in our relationship that my SO has significant student loans (near $100k). I was OK with buying the place on my own given that we would plan to split the monthly housing costs. Even though he already moved in with me, he has not yet made any monthly payments because his lease on his old place does not expire until Sept 1. This was known in advance and I am OK with this. The plan is that we will split the monthly "all-in" costs even beginning September 1.

Since we now live in a bigger place, we needed to buy new furniture, decor, etc. I have spent close to $15k on all of the above, plus some minor rehab costs, paint, etc. We agreed to split all of such costs even and track them in a spreadsheet. As of now, he has only paid about about $3k of the total $15k because he can't swing it, given his monthly student loan payment of $1400 plus other living expenses. In fact, he told me he has accrued approximately $2k in credit card debt recently and he doesn't feel he will be able to pay me for any portion of the furniture/etc expenses for quite a while, until he pays off his credit card debt. His "free" monthly cash flow is tight and any large expense can really set him back for a while.

My thought with us moving in was that he would be splitting the monthly housing cost with me, and we would keep our finances separate and everything would be fine, despite his student loans.

I am really stumped as to how to proceed now, because it has hit me that I am effectively going to be subsidizing his student loans unless something changes.

Admittedly, we both like to travel, have fun experiences, etc. Generally, I am comfortable spending more money than he is largely because I have more money and because I don't have student loans. I am not judging him for having loans and not putting myself on a pedestal, but this is the reality. We have very different financial situations.

I am starting to realize that, we as a couple, aren't going to be able to continue living the lifestyle we like to live (travel, eating out, doing fun things, furnishing our new place, etc.) unless some changes occur: A) he somehow pays off his loans overnight B) he gets a huge raise C) we cut back on lifestyle choices.

Of course, I don't wish to change my lifestyle, but maybe that is the solution to the dilemma I am facing. Unless any of the 3 changes occur above, the only path I see for the future is that I am going to effectively be carrying the bulk of our housing expenses, unless he continues to get into credit card debt, but I feel we would both resent that in the future.

I am not really sure what to do, but it is certainly bothering me. Upon learning of his high student loans when we first started dating, it was never a game changer and I always felt that it wouldn't bother me as long as I wasn't sharing the tab with him. But now I feel that I am doing just that....

Unfortunately, I believe his student loans likely won't be paid in full for another 5+ years.

I have not read all the replies, just finished reading this original post. This is tough, because now is a bad time to determine the reality of the situation that has been created. Living together as a married couple (sharing living expenses, furniture etc) is very challenging when you are not truly married. Who gets what if you split up? Does he get half the equity in the home since you both agreed that he would pay half? Who gets the furniture etc? Money is the #1 problem faced by married couples and is a primary cause of divorce. Both parties have to agree on the couple money goals and uses. By not being married, you will most likely not have common goals and uses.

Imagine the tough spot your SO is in. They have a financial mess to clean up, but also have to pay for your choice in home, home repairs and furnishing and have to live up to your lifestyle. They make less money and need it all to clean up their mess but have basically created a big debt to you which is already creating hurt feelings.

I think that the best chance for success is to both work together to understand each others finances and keeping the money separate, work a plan to reach your common goals.

Does your SO have the power to stop the purchase of items that he cannot afford to pay for right now? It is really not fair to them if they cannot control the amount of debt that is created for them to pay for if they do not have the authority to not participate in the purchase. Your significant other should be working a plan to get rid of his debt and not spending any money.

Once you are married, their debt becomes your debt etc so you will work as a team to pay it off. How close are you to being married?

 

[Oakster]

And just to clarify, I can definitely “afford” my place on my own. There’s no concern I won’t be able to make the payments. It’s just that, had I known I would be covering everything on my own, I never would have bought it.

If you break up, will you buy out his share of the equity? It is very unclear what the arrangement was. If the intent was to buy the house together, in your name is he a partner in this? If you expected him to pay until the end (30 year commitment) that sounds more like rent. I think it is in your best interest to set a value and charge rent. If he can work through a plan to reduce his debt, then the rent can increase to a reasonable level. If he blows his money while not working the plan and living on reduced rent.... kick him out.

 

[Octogirl]

Holding similar financial habits/attitudes is very important in a relationship. That is my concern for you. It is often what the money represents.



When I got (re) married, DH had less $$ in IRAs/savings than me BUT I knew he had cautious spending habits and he had no debt. HIs divorce had cost him much of his savings.
DH and I talked about money and its use alot in our dating relationship before we EVER considered marriage. There were no surprises.

We now combine money into joint accounts . In my first marriage, we had separate accounts, and it really represented a lack of intimacy.

I am not sure you need to combine finances to maKe you talk more about it .

 

[BoodaGazelle]

Unfortunately, there is no way to fix this. You need to make sure that you completely disentangle your assets from him, and as someone else already pointed out, you need to be with someone who completely shares your goals and discipline.

 

[Murph]

And just to clarify, I can definitely “afford” my place on my own. There’s no concern I won’t be able to make the payments. It’s just that, had I known I would be covering everything on my own, I never would have bought it.

Sell it.

 

[klscaz]

I would have him pay rent. NOT half of all costs. Half of all costs sounds like a co-owner. I would keep the house as YOURS and let him pay rent to you. If you get married you can decide then if you want to make it a joint house.

I agree. The house is just in your name so he should pay a reasonable rent for your location--not half the mortgage. Also, he should not reimburse you for the furniture. Then if you were to break up, the house and everything in it would remain yours.

 

[SonofCohoes]

My Significant Other "SO" and I have moved in together after about 2.5 years of dating. To be more specific, I ended up buying a new home for us to live in together (with my own funds for the down payment, taking out the loan in my name and receiving the deed in my name). We are dating and not married. I've known since early on in our relationship that my SO has significant student loans (near $100k). I was OK with buying the place on my own given that we would plan to split the monthly housing costs. Even though he already moved in with me, he has not yet made any monthly payments because his lease on his old place does not expire until Sept 1. This was known in advance and I am OK with this. The plan is that we will split the monthly "all-in" costs even beginning September 1.

Since we now live in a bigger place, we needed to buy new furniture, decor, etc. I have spent close to $15k on all of the above, plus some minor rehab costs, paint, etc. We agreed to split all of such costs even and track them in a spreadsheet. As of now, he has only paid about about $3k of the total $15k because he can't swing it, given his monthly student loan payment of $1400 plus other living expenses. In fact, he told me he has accrued approximately $2k in credit card debt recently and he doesn't feel he will be able to pay me for any portion of the furniture/etc expenses for quite a while, until he pays off his credit card debt. His "free" monthly cash flow is tight and any large expense can really set him back for a while.

My thought with us moving in was that he would be splitting the monthly housing cost with me, and we would keep our finances separate and everything would be fine, despite his student loans.

I am really stumped as to how to proceed now, because it has hit me that I am effectively going to be subsidizing his student loans unless something changes.

Admittedly, we both like to travel, have fun experiences, etc. Generally, I am comfortable spending more money than he is largely because I have more money and because I don't have student loans. I am not judging him for having loans and not putting myself on a pedestal, but this is the reality. We have very different financial situations.

I am starting to realize that, we as a couple, aren't going to be able to continue living the lifestyle we like to live (travel, eating out, doing fun things, furnishing our new place, etc.) unless some changes occur: A) he somehow pays off his loans overnight B) he gets a huge raise C) we cut back on lifestyle choices.

Of course, I don't wish to change my lifestyle, but maybe that is the solution to the dilemma I am facing. Unless any of the 3 changes occur above, the only path I see for the future is that I am going to effectively be carrying the bulk of our housing expenses, unless he continues to get into credit card debt, but I feel we would both resent that in the future.

I am not really sure what to do, but it is certainly bothering me. Upon learning of his high student loans when we first started dating, it was never a game changer and I always felt that it wouldn't bother me as long as I wasn't sharing the tab with him. But now I feel that I am doing just that....

Unfortunately, I believe his student loans likely won't be paid in full for another 5+ years.

This is De Ja Vu for me. My daughter was in the exact same position you’re in a few years ago. Her situation was rectified with a breakup and sale of the house.

 

[Ablatus]

I suggest one or all of 4 simple things to maybe get him on track.

1. The little Book "The Richest Man in Babylon.
2. The Dominguez book "Your money or your Life"
3. Netflix: Marie Kondo or an audio of her book "The Joy of Tidying" (doing with less)
4. I love Dave Ramsey's radio show and how he deals with relationships and money. (Too Baptist Christian for this gay guy but I never hear him putting down other denominations or non-Christians...I am so glad when good people can get along and respect each other)

My Significant
Other "SO" and I have moved in together after about 2.5 years of dating. To be more specific, I ended up buying a new home for us to live in together (with my own funds for the down payment, taking out the loan in my name and receiving the deed in my name). We are dating and not married. I've known since early on in our relationship that my SO has significant student loans (near $100k). I was OK with buying the place on my own given that we would plan to split the monthly housing costs. Even though he already moved in with me, he has not yet made any monthly payments because his lease on his old place does not expire until Sept 1. This was known in advance and I am OK with this. The plan is that we will split the monthly "all-in" costs even beginning September 1.

Since we now live in a bigger place, we needed to buy new furniture, decor, etc. I have spent close to $15k on all of the above, plus some minor rehab costs, paint, etc. We agreed to split all of such costs even and track them in a spreadsheet. As of now, he has only paid about about $3k of the total $15k because he can't swing it, given his monthly student loan payment of $1400 plus other living expenses. In fact, he told me he has accrued approximately $2k in credit card debt recently and he doesn't feel he will be able to pay me for any portion of the furniture/etc expenses for quite a while, until he pays off his credit card debt. His "free" monthly cash flow is tight and any large expense can really set him back for a while.

My thought with us moving in was that he would be splitting the monthly housing cost with me, and we would keep our finances separate and everything would be fine, despite his student loans.

I am really stumped as to how to proceed now, because it has hit me that I am effectively going to be subsidizing his student loans unless something changes.

Admittedly, we both like to travel, have fun experiences, etc. Generally, I am comfortable spending more money than he is largely because I have more money and because I don't have student loans. I am not judging him for having loans and not putting myself on a pedestal, but this is the reality. We have very different financial situations.

I am starting to realize that, we as a couple, aren't going to be able to continue living the lifestyle we like to live (travel, eating out, doing fun things, furnishing our new place, etc.) unless some changes occur: A) he somehow pays off his loans overnight B) he gets a huge raise C) we cut back on lifestyle choices.

Of course, I don't wish to change my lifestyle, but maybe that is the solution to the dilemma I am facing. Unless any of the 3 changes occur above, the only path I see for the future is that I am going to effectively be carrying the bulk of our housing expenses, unless he continues to get into credit card debt, but I feel we would both resent that in the future.

I am not really sure what to do, but it is certainly bothering me. Upon learning of his high student loans when we first started dating, it was never a game changer and I always felt that it wouldn't bother me as long as I wasn't sharing the tab with him. But now I feel that I am doing just that....

Unfortunately, I believe his student loans likely won't be paid in full for another 5+ years.

 

[trumpeting_angel]

I’m in a relationship in which I have substantial assets (and just retired) and my SO has much less. He is also 7 years younger and still working. Fortunately he is not carrying any debt and lives pretty frugally.

This is a later-life relationship for both of us. We’ve been together for two years. This aspect of our lives (managing financial decisions) is more difficult than it would be if we were more similar financially. We know that, in the flush of love early in a relationship, we sometimes act and commit to things that seem like they will work out but turn out to be more difficult.

In our case, although we aren’t yet married, we have made a solemn commitment to work together on the hard parts of this partnership. This, and not finances or how expensive our lifestyle choices are, is what holds us together. If we weren’t working hard on our financial differences, we would be addressing something else. And we are, come to think of it! Commitment for a lifetime means work. And being open, and working things through. Talking about the future, plans, values, and how to get there together - if you can do this, you can forge a relationship that works for the long haul. Best of luck!

 

[dand76]

Again, I’m not judging people based on their financial status. He and his family are great people. but it’s just starting to hit me that I’m going to be footing the majority of the tab indefinitely, (or at least until his student loans are paid off).

OP, please consider this scenario:

Young couple meet in college and date for 3 years then get married. During the marriage:
The love birds talk - decide to put extra payments on 'her' college loans as her interest rates are a little higher while making the minimum payment on 'his' college loan. Her loans get paid off. Awesome! progress toward freedom from debt.

The love birds talk - it is decided that she will quit working or work part time until she gets her masters degree. She gets her masters degree. Awesome! Higher potential earnings for their financial future.

All along they put away what they can in the bank to save up for a down payment on a house. Awesome! Seem to be doing all the things a young couple should do to move forward with their marriage and successful financial future.

She goes thru 3 or 4 jobs in her field of study and last year decided she doesn't like it. Recently gets job as office administrative assistant. Hmm... disappointing but love conquers all, right?

They're now 8 years into the marriage.

'He' comes home from work one day, she and all her personal belongs are gone. Half the house down payment money is gone from the joint bank acct. And she is ghosting him (no response to phone calls, texts, email, etc.) He finally gets one response - "I'm not happy and want a divorce. All future correspondence is to go thru my lawyer.

My wife and I are currently at my son's apartment helping him thru being blindsided by his love, figuring out the divorce proceedings and helping to find a new place for him to move into because he can't afford the current rent on his own.

Love is awesome, until it isn't.

OP, good luck with the decisions you need to make.

dand76

 

[daylatedollarshort]

4. I love Dave Ramsey's radio show and how he deals with relationships and money. (Too Baptist Christian for this gay guy but I never hear him putting down other denominations or non-Christians...I am so glad when good people can get along and respect each other)

There was a Canadian TV show, now on youtube, called "'Til Debt Do Us Part" that was secular. The host recommends tackling large non-mortgage debt in pretty much the same way as Dave Ramsey - as a debt emergency. It is a bit corny, but I used to try to get our kids watch it when they were teenagers so they didn't end up like the couples on the show. The host runs the numbers and makes budgets for couples, with dates they can either be out of debt if they cut back and follow her spending plan or how much they will owe in five years if they continue on the current spending trajectories.

If the OP is viewing their finances as a couple, I think they need a combined budget and financial plan. Or else just charge the SO rent and treat the finances more like roommates would. We subsidized one of our kids roommates in college as he was a nice kid and we had the means to do it, so going the roommate route with subsidization is a consideration for the OP since he has more means in this situation as well.

Here is one episode called Cash Poor, House Proud:

 

[winyaz]

Lots of good observations, seems the OP and SO are on different pages financially.

What's strikes me (that I have not seen posted) is why would the OP buy a house and spend $15K on furniture that they cannot afford by themself? This is a FIRE forum! I can't imagine buying a house that can't be paid for in < 20 years on one salary and I doubt I have spent much more than $15K on furniture in my life - and I know I am not among the most frugal here. 5 months after I married my contract position was ended early, and my wife and I had just bought a house. We were able to make the payments and live (frugally) on her smaller income without taking on debt for the 4 months it took me to find another good job. Not sure what we would have done if we needed both incomes to make the payments.

The OP can't afford the house themself and it seems the SO can't help with the payments as much as expected. Both seem like reasons to sell the house.

 

[Badger]

I am all for buying a house to live in but this seems to be "putting the cart before the horse" and as the OP has been reading it can be a financial nightmare. Even though it is now a done deal it may be a good idea to consider selling the house and start over with who is responsible for expenses. Better now before the housing market changes. Rent an apartment that you can afford with a contract in your name only and they can pay for their portion. No issue with equity etc. They have to live somewhere and pay rent so that should not be an issue. It may also be a good idea to have a revocable trust to insure your assets are protected. That can be changed in the future as the situation changes.


Cheers!

 

[Music Lover]

What's strikes me (that I have not seen posted) is why would the OP buy a house and spend $15K on furniture that they cannot afford by themself? This is a FIRE forum! I can't imagine buying a house that can't be paid for in < 20 years on one salary and I doubt I have spent much more than $15K on furniture in my life - and I know I am not among the most frugal here.

I'm 57 and haven't spent $15k on furniture in my life either. In fact, just 4 years ago I finally treated myself to a nice leather couch and recliner...$3k for both and even then it took me a while to pull the trigger due to my frugal nature. Twice over the years I bought very nice furniture from co-workers who wanted a different look...in one case $400 for a set they bought for $2500 a few years prior.

People give away decent furniture every single day and even the high quality stuff can be had for pennies on the dollar.

 

[MultiEventer]

As a former volunteer financial adviser, as well as being a long time money nerd, the most destructive thing that happens to a financially savvy person is to get emotionally connected to financially ignorant person. I've seen it a hundred times. One sacrifices for the greater good of the relationship while the other just can't control him/herself and splurges. The choices are for him to change or for you to move on. If neither of those things happen, then you will be putting in 75% while he contributes 25%. But depending on his honesty/integrity level, usually what happens is your portion will increase while his decreases. Miracles do happen. I've seen it. But like I said, it's rare and that's why it's called a miracle. God speed to you and I hope for the best.

 

[Travelfreek]

try seeing a counselor

Our son visited a marriage and family counselor for the first time in his life about 4 years ago after he broke off his engagement. The visit was a gift for he and his fiancee for their impending wedding from our daughter who also visited with her future husband before they married. Our son's fiancee at that time refused to go to a counselor.

Our son was guilt ridden for breaking off the engagement and his visit allowed him to air his concerns as to why he felt the marriage was a mistake. His concerns were confirmed by the counselor as far as can those issues be fixed easily?.the answer was no. He then dated another woman about 6 mos later where they eventually (after a year) ran into problems. So he started seeing the counselor again along w/ the then girlfriend with my son paying the bill since the gf owed a bunch of money to her folks for student loan payoff from 7 years earlier that hadn't been paid off. It turned out that relationship was not healthy at all for other reasons (gf jealous over EVERYTHING) and he broke it off. Another 4 mos transpired and he began dating a new girlfriend; they dated about 1 year and he proposed to her. They also went to see the counselor a few times because by this time, my son realizes that counseling is a healthy practice for all couples who are planning to merge their lives and live together under one roof. They were married 2 weeks ago and it appears to be a great and healthy relationship.

The OP in this case has issues (financial diffences w/ SO) that were not as black and white as my son's issues with his first fiancee (his issues were with her personality). The OP would benefit from a visit first by herself with a good counselor and then maybe adding SO in to see if there's hope for changed behavior in the area of financial behavior. I think both parties need to change behavior - OP needs to face reality and not drag her SO into situations where he's overspending based on his debt situation. The SO needs to face his budget challenge and get a plan in place and execute it. He also needs to be honest with OP and say, "I can't afford to furnish this house with you". Together they need to determine if they can live harmoniously or not. Best of luck to OP and her SO.

 

[Rianne]

I believe my frugal attitude comes from the fact my DF spent way more than he could afford and relied on my mom (dumb as a fox). She bought rental real estate, paid off the houses, collected the rent and always had a nice pile of cash set aside. DF used her houses for 2nd and 3rd mortgages and after his death nearly put our family on the streets. We were inches from homelessness. If anything teaches a lesson, it's living through it.
My DH is frugal and smart. I recognized that early on in our relationship. He was taught debt is bad. We have no debt. Cars, house and any travel, fun activities are paid off almost immediately.
OP, don't learn this lesson the hard way. There are so many smart posters here giving you great advice. Love is blind until you're broke. My mom was a loyal wife and mother, but she often cried at the way me DF blew money. I'm not talking about small amounts here. She would have been a wealthy woman if not for my DF.

 

[carnivalday]

Til Debt do Us Part.....what a great show, I had forgotten all about that show.

Ill have to see if I can find some reruns. It was really good.

 

[mystang52]

Maybe OP is reading all of these replies, but he hasn't posted any comments since the original couple of posts. I'd be curious about any updates or his thoughts on the many replies.

 

[Rianne]

Maybe OP, younginvestor does not like what she's reading. Valuable information for our members, regardless.

 

[Nemo2]

Maybe OP, younginvestor does not like what she's reading. Valuable information for our members, regardless.

'She' be 'he'.

 

[Rianne]

"Admittedly, we both like to travel, have fun experiences, etc. Generally, I am comfortable spending more money than he is largely because I have more money and because I don't have student loans."
"As of now, he has only paid about about $3k of the total $15k because he can't swing it, given his monthly student loan payment of $1400 plus other living expenses. In fact, he told me he has accrued approximately $2k in credit card debt recently and he doesn't feel he will be able to pay me for any portion of the furniture/etc expenses for quite a while, until he pays off his credit card debt. His "free" monthly cash flow is tight and any large expense can really set him back for a while."

Nope, a she, well maybe.

 

[JustCurious]

Maybe OP, younginvestor does not like what she's reading.

Maybe the OP did not like that so many people assumed he was a she.

 

[Rianne]

Maybe the OP did not like that so many people assumed he was a she.

True, sorry OP, I'm old and inconsiderate.