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

[younginvestor2013]

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.

 

[Souschef]

I am sorry you are in such a dilemma. My first reaction is to tell you to dump him, regardless of the emotional toll. The resentment of subsidizing his student loans will definitely boil up.
I cannot see why you should have to change your lifestyle to support his debt. He is apparently incapable of managing his money, while you are. This can cause some tremendous conflicts.

 

[travelover]

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.

 

[FIRED2018]

OP, do you have questions or just looking to get your frustrations off your chest?

I have a few thoughts. You say as a couple you’re limited due to his high expenses. It seems you’re not really a couple in the most meaningful sense of that concept. To me, a couple is when two become one. At that point mine is yours and yours is mine - maybe this doesn’t work in the world of “let’s play house”, i.e., shacking up.

Your biggest mistake was ignoring his debt - it does matter and for his future wife and children (if any) it will have life long repercussions, especially considering it seems like he’s not lazer focused on earning an income commensurate with such an expensive education. To overcome this I suggest you hold hom to the agreement or evict him. If he can’t cover his rent he needs to cut expenses and increase income. Don’t make his problem into your problem.

If you think the relationship is important to both of you then sit down and tell him how you feel. And make sure to say what is necessary for him to do to continue the relationship.

Oh and don’t ever buy a house with a friend. Either buy it by yourself or with a lifetime commitment partner as is supposed to exist in a legal marriage.

 

[younginvestor2013]

Thanks all. I don’t really have a specific question, more so just looking for advice/input.

Part of the decision if we were to break up is that I wouldn’t feel comfortable covering such a large mortgage on my own indefinitely. The plan was that we would split it.

I don’t think he foresees it as an issue...it seems the norm in his family - he has made comments before about his parents living paycheck to paycheck as they collectively bring in $65k living in a $400k house.

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).

 

[younginvestor2013]

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.

 

[FIRED2018]

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.

You bought it on your own. He had no skin in the game and no contractual obligations. You are not evaluating this with disinterested eyes. You made a mistake and you alone are on the hook for the house. Unless you want to spend your life being dragged down to his level of financial norms you need to elevate him or disengage. If the relationship is worth it I would lay it on the table with him. I would not compromise my financial norms for a paycheck to paycheck partner.

 

[daylatedollarshort]

I am not a Dave Ramsey fan overall, but I think he has good advice on paying off huge student loans. You can search for his shows on youtube with student loan debt titles. Basically Dave's advice is to really take that debt seriously, view it as an emergency and eat beans and rice and no extras like going out to eat until it is paid off. I don't recommend the beans and rice literally, but what one of our kids' friends refers to it as "financial veganism".

Part of the issue here seems to be you took on a 30 year mortgage and don't necessarily see a 30 year future with your SO, but you need his income to pay the mortgage comfortably. Ask yourself is your SO a life and financial partner or a roommate who can't pay his half of the bills? I think how you proceed from here depends on the answer to that question.

 

[Travelfreek]

I don’t think him being on the hook to split $15k in furnishing the house budget is appropriate considering his debt level. It seems you were not thinking of his situation when you came up with this big idea. It’s like you are on 2 different financial pages and you are all confused as to why he can’t afford to furnish a house he can’t afford. He probably can’t afford to split the rent with you either considering his $1400 loan payments. You had blinders on when you came up with this plan. He shouldn’t have agreed to it either since he needs to live as cheap as possible while paying off his loans. It seems like neither of you were thinking straight. If you marry, the debt essentially (not legally) becomes yours and it makes sense to get rid of it sooner than later.

 

[CaliKid]

Sounds like you bought too expensive of a house without thinking it all the way through. That is, sure you can "afford it" but not without altering your lifestyle. You need to make more money it seems to me.

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.

If you like him then who cares about some student loan debt. That would be a silly reason to break up with someone. Sure it's a fine excuse but not a real reason since you already knew about it.

Just think things through a little more next time you jump in on a big purchase.

 

[O2Bfree]

I have to wonder why he took on more credit card debt. Does he think his private expenses, whatever those are, are more important than the expenses you two agreed to share? Is he at all concerned about your shared financial situation?

 

[gayl]

Just a few random thoughts:
(1) he could pay rent
(2) take a set % of both incomes to cover all household bills
(3) your excess = investments + splurges. His excess covers SL + 10%+ remainder to retirement to fully funding IRA or at least 401k to match + anything left to splurges
(4) 5 yrs go fast and I think you said it would take that long to pay his off

 

[Jerry1]

Ask yourself is your SO a life and financial partner or a roommate who can't pay his half of the bills? I think how you proceed from here depends on the answer to that question.

Bolded above is the key question. Marriage or not, is this a committed relationship or a temporary arrangement. Once you’ve figured that out for yourself, find out what he’s figured out. The answers to your situation are very different depending on how you view the relationship.

My very unknowing of you opinion is that this is not a permanent arrangement and therefore you should just agree on a fixed amount for rent and accept him and the situation for what it is.

If you think different, you’ve got a lot to think about. Life partners, again, in my opinion, don’t have separate financial lives. Many a relationship has deteriorated due to partners not being on the same page as far as finances are concerned.

You don’t need to answer it here, but for your own good, answer it for yourself. What type of relationship is this? And, is he in sincere agreement with you on this core question.

 

[skipro33]

I too was thinking 5 years and his school loans would be paid off isn't that long of time to figure out how to make ends meet.

But, I was also thinking the guy just may be a dead beat. Albeit able to fly under the radar and not seem so in your eyes.

I think you need to ask some very close girl friends or family what they think of the guy without them knowing the financial arrangements you two have made. Hope they are honest and forth coming if they think he may be a player at some level.


Personally, if I were that guy, I would not be able to look myself in the mirror after making those commitments to the financial part of your union. I would hustle up a second job, uber driver, bar tending, etc, cash in any investments, sell off personal property or other assets, etc. in order to meet my obligations. I'd also try to renegotiate the need to furnish the house at this time, or shop used for stuff to fill the place up.

 

[chris2008]

Does cohabitating and sharing cost of the house give him any right to the house? Check the law of the state you live in.

Have him pay rent at least as high as his previous rent, get a contract in writing on it set up by a lawyer to make sure that you can evict if he does not pay.

Do not subsidise his lifestyle. If he cant buy or do something without increasing his debt, do not buy or do.


The facts that he does not honor your agreement on the purchase of house stuff and has credit card debt and has parents with bad financial habits gives more than enough reason to be concerned.

Don't be the lady that finds herself without house and savings and him but with a kid in 5 years time.

 

[Helen]

Don't be the lady that finds herself without house and savings and him but with a kid in 5 years time.

^^^This!

 

[MarieIG]

Have you and your SO shared your monthly income and expenses? If not, you need to do so.

It sounds as if your SO can't afford to pay 1/2 of the full in living costs on the home - including the renos and the furniture. Did he rack up those 2k trying to pay for that?

Anyway, if you want to stay together, the contribution from him has to be realistic taking in mind his income and expenses - and those student loans are mandatory expenses.

It sounds as if he over estimated what he could afford; and you over estimated what he could afford. I would leave him alone regarding the renos and furniture, and agree if you brake up you will keep it. (Obviously, you are "keeping" the renos.)

You two need to come to a realistic expectation of what he can afford to contribute based upon his finances - perhaps an amount equal to his prior rent?

And if you feel that you are partially subsidizing his expenses: it won't be the first time or the last a SO has done so. Typically, SOs don't all have equal income/expenses. It did seem that the initial deal with him concerning him paying for 1/2 of all expenses would be something expected of someone who would be gaining equity in the house/ not a SO with no equity interest.

It sounds as if some conversations are in your future. And yes, if you two stay together, you may need to make some sacrifices.

 

[racy]

... 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.....

Kick him out of your house. He has a place to live till September. You can still date. However, having seen this guy's sense of obligation/responsibility, maybe you should play the field!

 

[donheff]

Seems like you are either having buyer's remorse (both mortgage and boyfriend) or you are fretting too much about a relatively minor matter. It sounds like your BF can afford half the mortgage, just not much else. Go with that and discuss finances in more detail. Since you say you could afford the whole mortgage by yourself, you should be able to afford the furniture you bought. Tell him you will take over sole ownership of the furniture. That way if the relationship goes south you can send him packing with a clean break - no squabbles over dividing the furniture.

You situation is not a lot different than my wife and mine 37 years ago. While we were dating she bought a house and I moved in with her. I covered half the mortgage while she owned everything except some furniture I brought with me. She made more money than I did and I had a son by a previous marriage who I paid child support for (equivalent to significant student debt). We did fine: got married a couple of years later, combined our finances completely, had a daughter, saved and ER'd.

It strikes me that the important thing to figure out is whether this guy is really less disciplined and frugal than you or just has less income coupled with student debt. Get the CCs paid off and agree that all CCs will be paid in full every month. Adjust your travel to meet his capabilities or face the fact that he will be constantly strapped to keep up. Eventually figure out whether you love this guy and want to marry him. If not, move on. If you conclude that marriage is right for you decide how your finances will work. My opinion is that you can and should cover more of the budget if you make more money. Few object to the reverse when the man makes more. On the other hand, others here will counsel you to keep everything separate throughout life. Your choice but you should be on the same page is your husband.

 

[joesxm3]

When I first bought my house, one friend quickly convinced me to take him in as a roommate (not a romantic partner). He had lots of credit card debt that he eventually dumped by filing bankruptcy, so the arrangement was that I would pay the $1800/month mortgage and he would pay $125/mo rent. However, he would mow the lawn, shop for groceries etc. The lawn mowing lasted about two months. I eventually had to kick him out after a year for reasons that went beyond the unequal financial arrangement.

I had a high paying contract programming job, but I bought a house much less than what the realtor told me that I could "afford". I paid off the mortgage in 8 years because I treated it like an "emergency" and diverted as much as possible to paying it off, partly because the rate was 9 1/8%.

Since you are reading this forum, I assume you hope to FIRE at some point. While there is a benefit to enjoying life and having experiences, if you plan on reaching FIRE, you need to live below your means.

I agree that you should clarify if this is just a step to a full marriage or lifetime commitment or just "living together". I have seen many couples that seemed like a solid arrangement that "lived together" split up, even if it took years. I guess that can happen with marriages too.

Unless it is a definite lifetime commitment, I think having him pay half of the renovations and house repairs is not a good idea, both from the point of view of being unfair since he pays and you reap benefits and from the point of view has him developing some common law claim on the house. Rent based either on half of the mortgage or a percentage of his income seems like a better idea.

If you really love each other and are going to make a lifetime of it, then I would put up with this and try to work out a plan to eliminate the student debt ASAP and to make sure not to grow the debt or waste money going forward. I know that we are in the modern pagan age, but over time, and having not followed this advice, have come to the conclusion that the time-tested "get married, raise a family, grow old together" is the model that works best.

Whatever you do, good luck.

p.s. If you cut back on the travel now and are able to ER at an early age there could be a lot of travel without worrying about the financial aspect of it.

 

[flintnational]

It sounds like the two of you are trying a hybrid relationship, part married couple part boyfriend/girlfriend. Each of these require different levels of commitment and engagement. I think the two of you need to determine which one the relationship is. That will make the guidelines and goals clearer. If he is a boyfriend, as others have said, have him pay rent. If OTOH he is a spouse, you will need to decide if you can live with his debt and his approach to money. Or he will need to decide if he is willing to change. Decide what you have/want and then you will know how to approach the other issues.

 

[RunningBum]

I agree with posts 9 & 10. You went on a spending spree for the house and stuff without a realistic look at your joint finances. You share the blame. You can't take nice trips when your SO can't afford it yet still expect him to pay his share.

 

[athena53]

I agree that you need to figure out if he's on the same page financially. I had a very good career (retired in 2014) and was married twice. One was to a spendthrift with splendid tastes who didn't have the income to pay for them and considered any money remaining on his credit line to be money he could spend. The second, 7 years after my divorce, was a match made in heaven. He made half what I did but was debt-free other than a manageable mortgage, and lived a fairly simple life. When we moved for my job, he was 65 and started on SS. Our big splurge was travel and we went to Europe at least once a year. He died in late 2016 and I'm still traveling and spoiling my grandchildren.

It bothers me that your SO ran up more credit card debt and then told you after the fact. Only you can decide if he has the potential and the discipline to pay off his debts and make whatever sacrifices are necessary to do so. I wouldn't get married unless he does. See the thread on things that derailed people's ER plans; a few had very expensive divorces.

 

[Amethyst]

This forum's members typically abhor debt, except as a means of making more money (e.g. loan to buy rental property). So pretty much all of us are going to be thinking, "Get rid of the debt, or get rid of the guy!" which may be harsher advice than you are looking for.

That said, real love is not that easy to find, even when you are young. The consequences of a breakup can haunt a person for years. In your shoes, I would follow joesxm3's advice. I would not leave him over his debts, but would expect him to step up and create, then follow, a joint plan to get out of his debt. That would be the absolute "floor" of maturity and caring that I would accept from a partner. If he couldn't manage that much, then I would be looking for a way out of the relationship.

Good luck!

Amethyst

If you really love each other and are going to make a lifetime of it, then I would put up with this and try to work out a plan to eliminate the student debt ASAP and to make sure not to grow the debt or waste money going forward.

 

[Aerides]

OP, a few things as if writing to my younger self. Not sure how old you are but assuming you are around 30?

First, don't make babies with your SO. At least not now. If you stay together, wait at least 2 years to let all this settle down.

As far as the furniture, SO may have underestimated how much that would cost, and is now coming clean. Fair enough. But your SO doesn't seem compelled to prioritize paying you back - RED flag.

Your SO is due to start paying "half" after Sept 1. I would bet you even odds that by Dec1 at least one month is behind. Start now on a financial plan that means you are absorbing 100% of the annual cost. If SO pays any, great, if not, you're not set back. It was silly to buy a place that depends on SO's paying half (I know you don't need it, but you said you would not have bought it otherwise). Lesson learned.

You aren't a match. You have very different values and feelings about money. That doesn't make SO bad, it just means this is a major area of difference. One that will show up in other areas. Housework, cooking, helping family, etc.

You aren't wrong to feel resentful. Your relationship is off balance. It always will be. After the student loans it will be something else. It's always something else. $2k in credit card debt out of nowhere? And that's the priority, not his commitment to you? - RED flag

You have a choice now. (No, it won't be better in 5 years.) You either have to accept your new reality as the character of your chosen lifelong partner, or start over, be single again, and figure out what, and who, adds to your life rather than subtracts from it.