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

[Franklin]

My wife and I had some parallels with your situation, but some significant differences as well. We were 22 and 23 years old, 36 years ago.

I was just out of Engineering college, so I had a good income relative to most. I also had $6,000 cash and no debt, so I was planning on buying a house. She was a real estate agent and a part time waitress. Since her real estate career had not been established, she wasn’t making many commissions. She also had a significant debt to her Father. I think it was on the order of $3,000. We also agreed that she should quit her waitress job for various reasons.

We dated for about 3 months before we decided to live together. However, both of us expected that if the living together part went well, we would soon marry.

I bought a house about the time we got engaged. I knew at the time it was a stretch for me, but like you, I found out it was a bigger stretch with all of the bills, furniture, etc.

However, I loved my then girlfriend/fiancé dearly, and there was nothing that was going to stop us from moving towards marriage and the rest of our lives.

Yes, there were compromises. Several that I will not go into details on, but that is the choice we made with one salary significantly more than the other, and one person a natural saver and one person a natural spender.

We are now happily married for 35 years  So I would suggest you look long and hard at your SO, and decide if you want to move forward into a long-term relationship. Couples often have different incomes, financial goals, and family backgrounds. It can work, as we proved.

The question is, do you love him enough? Seems like I have not heard that, and if you did, none of this might not matter to you. Just my opinion. Good luck to you

plus 1. Been married under very simular circumstances for 32 year. Yes DW's financial habits drive me crazy, but that is called marriage. I am sure I've got things that drive her nuts as well. If u love him enough you can balance this out. The love is more important than $ (within reason!!). Student debt would not run me off. Most importantly you should talk it out and address the issue head on.

 

[Golden sunsets]

Sept. 1 he no longer pays rent on his apartment, so some portion of that money was likely figured into going towards the loan payments.

But Sept 1 he has to start splitting cost of the mortgage and home related expenses with the OP, so how will he be putting more than $1,400 toward the SD.

But IMHO, if the OP loves this SO, she should be accepting that his debts will be partially hers, when they combine their finances. If she can’t view their combined finances as joint, then they aren’t well matched. This can only work if they share debt AND live by the same LBYM lifestyle.

 

[pb4uski]

.... 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.....

Can you elaborate on this? I guess I don't see the situation as very dire... he owes $100k in student loans, $2k in credit card debt and $4.5k to you for the furniture (1/2 of $15k less $3k paid to date). No need to panic.

Based on the current payments and interest rate, when would his student loans be paid? How much is his monthly free cash flow?

Will he ba able to cover his 1/2 of housing costs and $1,400 student loan debt payments and whatever his other li costs are?

FWIW, DW brought student loans to our union (but only $10k) and I brought net assets. See the last item of my tag line.

 

[NYEXPAT]

I think you should just give him the house now and skip the marriage/arguing/hating/legal fee's/Divorce part!

 

[haha]

I wrote out a response to this incredible thread, but on second thought, how stupid of me to even consider posting it.

Carry on folks!

Ha

 

[Major Tom]

Well that's a shame. I enjoy reading your perspective on things, Ha. Although I don't always fully agree, the inherent humor in your comments carries the day for me. You have a knack for linguistically marching right up to the line of acceptability, without stumbling over it. A rare talent, for sure.

 

[imoldernu]

I wrote out a response to this incredible thread, But on second thought, how stupid of me to even consider posting it.

Carry on folks!

Ha

+1

 

[haha]

Well that's a shame. I enjoy reading your perspective on things, Ha. Although I don't always fully agree, the inherent humor in your comments carries the day for me. You have a knack for linguistically marching right up to the line of acceptability, without stumbling over it. A rare talent, for sure.

Never fear my good friend. I am not going anywhere, only remarking on what is maybe the most astounding example of overreaching that I can remember.

I only meant that while I may offer a meta-comment here and there, I don't think that I will venture onto the playfield, and this is definitely not to be missed.

Ha

 

[Dtail]

Well you can see the direction to probably head to.

 

[Luck_Club]

My Significant Other "SO" and I have moved in together after about 2.5 years of dating.

I've known since early on in our relationship that my SO has significant student loans (near $100k).


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.


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

These are all common issues when starting out. Maybe not the volume of debt, and uneven distribution you are facing, but it is very common to see people just starting out with debt. It is also common for 1 person in a relationship to earn significantly more than the other. Usually the male (due to career choice vs salary gap). As a couple it isn't realistic to think his debts are his alone.

With that being said you need to ask yourself. Given his spending/work habits, his debts and your combined incomes, can you make a life together? Do you see a clear path to pay down the combined debt as a couple and still accomplish the goals you want for yourself?

You should review his work ethic. Personally, I would be working a second or 3rd job to pay down that debt. A few nights a week as a waiter or bartender could put an extra $1200 or so a month towards the household. If he isn't and hasn't been tackling the debt seriously for the past 2 years don't expect him to change any time soon.

Best of luck with a very tough decision.

 

[Badger]

Cheers!

 

[anethum]

I'm slightly amused that several posters have assumed that the OP is a woman. Maybe she is, but maybe he's not.

As far as the OP's situation is concerned, my only advice is for the two parties to frankly communicate their concerns with each other.

 

[MarieIG]

I'm slightly amused that several posters have assumed that the OP is a woman. Maybe she is, but maybe he's not.

As far as the OP's situation is concerned, my only advice is for the two parties to frankly communicate their concerns with each other.

Um, not. But OP worded carefully for a reason, probably afraid of being criticized.

Agree, some frank communication is warranted. I suspect that OP's SO is not quite as budget conscious as OP.

If possible, these two need to get on the same page financially so that resentment doesn't rip them apart.

 

[joeea]

I'm slightly amused that several posters have assumed that the OP is a woman. Maybe she is, but maybe he's not.

It is amusing.
Particularly since the Profile indicates otherwise:

About younginvestor2013
Gender
Male
State
Illinois

 

[athena53]

Communication is the key.
<snip>
Not sure you are asking for advice, but here is mine: Sit down together and thoroughly review both of your finances--Income, savings, debt, monthly costs. Discuss both of your money goals and plans for your future (do you see each other together 5-10, or 30 years hence?). Make a plan of how to get there, make a budget, and stick to it. It is not uncommon for one member of a couple to be a higher wage earner, what matters is how you , as a couple, decide to spend and save and what goals you have.

Totally agreed, and this is a very good test of the relationship. If he doesn't want to discuss it, or if he just nods and says, "Yeah, whatever you want" or he agrees to a plan but then does something different without talking it over first... those are bad signs.

Having said that- my sister married a guy who had a VERY dysfunctional family life. He and his Dad lived in a car for awhile after his mother left them. When he and my sister married, he told her to "hide" money in savings accounts and not tell him because he'd be tempted to spend it. He later worked 2 and 3 jobs to support the family (3 grade-school age daughters) when she decided she wanted to go to Med school at age 30, and now manages their investments, with some consultation with my brothers, who are both accountants.

And one rule that DH and I had was that neither of us would commit to spending more than maybe $200 or $300 without consulting the other. That was a tiny amount compared to our resources and we never had an argument over it- it was more to keep the other informed. You may have a different threshold, but it would avoid nasty surprises such as half of a $15,000 furniture bill.

 

[MichaelB]

I'm slightly amused that several posters have assumed that the OP is a woman. Maybe she is, but maybe he's not.

Exactly. And it should not matter or make any difference in the advice OP receives.

 

[flintnational]

Exactly. And it should not matter or make any difference in the advice OP receives.

My response over in the "Thank the mods for a clean forum" thread.

I think many of us can be described as apolitical, agnostic, asexual, gender neutral, investing experts!

Assuming a pronoun here or there is probably one of the least harmful assumptions we make when responding to questions.

 

[pb4uski]

Exactly. And it should not matter or make any difference in the advice OP receives.

+1

 

[bclover]

One of the best things that ever happened to me was finding someone that felt similarly about spending, saving and investing. That did not happen by accident, though it might seem cold or calculating. Love really is blind, but it changes over time.

but change doesn't always equal resentment or bad.

so a couple of questions.

Op, first why are you living together if you still have a mine/yours mentality??

My late husband and I were polar opposites when it came to money. He was definitely a saver and I was a spender. We figured out how to bring out the best in both of us.

First, we had common goals. We knew we wanted a house so we made a plan on how to pay off his student debt and purchase a house. next we put every thing in both our names. electric bill, phone, etc. every thing except our credit cards.

We discussed ways to pay off debt quicker without jeopardizing the relationship and resentment. We also did not rag on each other for slipping up nor tear the other down.

sounds to me you've got more of a relationship problem than a debt problem.

33 years (I'm widowed now unfortunately) and we brought out the best in each other.

I'm a shopper, I can squeeze a quarter until it runs screaming down the block. so my hubby trusted me to get the best deals when we had to purchase cars, stuff for the kids and vacations. I've worked deals to stay at the ritz carlton in Paris for under 200 a night.
He's a saver, I trusted him when we set a goal to get us there.

Opposites does not automatically mean that you're fighting all the time.

 

[carnivalday]

I also assumed the OP was a woman, since the OP stated his so was a male. You know what they say about assumptions. Be that as it may, it doesnt change my opinion on this situation. Money issues can sink relationships, and do.

 

[DINKFIRE]

Since you two are not married, expenses should be divided equally, but investment (house price) doesn't need to be especially it is title to you solely. He should be paying half of the interest, tax, insurance, maintenance and utilities on the house but not the principal or improvements. As for the furniture, if he chose them, then you split the cost, otherwise it's your furniture and you should pay for it. He already has student debt and credit card debt, you should not nickle and dime him. Instead, encourage him to pay more towards his debts, so that he can be debt free soon, maybe even before you two tie the knot.

My SO moved into the house I bought three years before we got married, We shopped for the home together and I considered both of our inputs, but I carried the principal and improvements as I suggested above. We split the joint expenses equally until we wed. Afterward we share the joint expenses based on our income ratio, and we pay to our individually titled assets separately. By reducing expense burden, my SO saved up substantial amount from near zero when we met, and we are both debt free today. We have never had any argument about money.

My above suggestion is based on the assumption that, both of you are on the same page regarding your long-term savings and spending goals together as couple.

 

[Dtail]

+1

+2 except perhaps the getting pregnant comment....

 

[Amethyst]

and yet adoption, while not the immense and sometimes perilous physical commitment pregnancy is, is still a commitment. Supposing it to be in the picture at any point.

My comments could apply to same-sex couples just as much as to heterosexual ones.

+2 except perhaps the getting pregnant comment....

 

[Ian S]

As a gay man who married his husband in April (after living together for 17 years), I can see some parallels in the OP's relationship. My husband and I are different in our financial situations but always have been. However, that only refers to income/assets not our approach to spending/saving where we are definitely in sync. When he originally moved in with me from his apartment, we decided only to split household expenses separate from the mortgage and property taxes as the house was in my name. Frankly, he just didn't make enough money to split everything in half. But what he couldn't contribute in money, he made up for in other ways not the least of which has been keeping the home immaculate. His 15 y.o. Toyota actually looks like it came off the showroom floor!

I think the OP was a bit unrealistic in assuming all the costs could be split 50:50 and still have the SO's student loans paid off in 5+ years. While the additional credit card debt could be a red flag, I think it would depend on what the spending was for. If it was for medical expense that would be one thing, if it was a party/bar tab that would be another. Maybe it was just him trying to match the OP in splitting costs of things both of them enjoyed. We just don't know. As others have said, there needs to be some frank discussion and a realization by the OP that there may always be a mismatch financially i.e. it may never be reasonable to expect a 50:50 split of everything. I've accepted that in my marriage as I'm sure many straight folks have in theirs.

 

[HadEnuff]

the very best advice I ever read about relationships came from the book "The Last Lecture", by Randy Pausch. As he was dying of pancreatic cancer, knowing he wouldn't be around to advise his children when they reached the dating age, he wrote letters to them to be opened at various birthdays he would subsequently miss.
In one of them to his daughter, regarding boys, he advises, something along the lines of "ignore everything they say, and pay attention only to what they do"...I thought that was a gem.
To the OP, I'd suggest the same. What you have is what you will always have out of your SO. If that's acceptable, enjoy. If not, move on.