21 September 2010

Debt and relationships

By: Jessica B.

I’m not an avid New York Times reader but sometimes, I find some thought-provoking articles that inspire blog posts. Case in point, a recent article about how debt can doom a relationship. Oh this one hit close to home.

The article features several stories about women and men, all engaged or in long-term relationships, ready to take that step to marriage or a serious commitment, except one thing looms over them: debt. Each are heavily in debt (mostly from school loans or credit card debt) and the article asks the question: When and should you tell your significant other about the amount of debt you carry.

For me, the answers are, once you’re in a long-term, committed relationship and absolutely yes you should.

And, I would not marry a man unless he had made serious headway at paying down his debt.

I’m not the only one of my friends that feels this way too.

Debt is a reality for a lot of people right now. If it’s not school or car loans, it’s credit card debt, easy to accumulate when you are trying to find a stable job and have non-stop household expenses.

I am very fortunate that I have a small amount of student loan debt (under $20,000) and no credit card debt. Yes, I do not have a lot of established credit, but it’s solid.

And, debt doesn’t go away when you do get married because that debt ownership falls on both of you and could affect the partner’s credit score.

Yes, I’m obsessed with credit scores, it’s important!

When I talked to friends about this, they were very adamant that they would not marry someone with a high amount of debt as well, especially if he/she won’t be able to pay it off for a long time.

One friend said that her boyfriend has bad credit right now and lots of school/credit card debt and she made it clear that they won’t be getting married until that’s under control. Another friend said that he’s helping his girlfriend pay her debt down so they can get married sooner than later. Very interesting.

One example in the article was about a woman who told her fiance she was $100k in debt due to school when in reality, she found she was more like $170k in debt, causing his to call off the wedding because he felt she “lied to him.”

She admitted that she didn’t lie to him, she lied to herself by not finding out the true balance earlier. This I believe because I think at some point, no one wants to really know how much debt they have.

As great as college was, I’m so glad I’m not in school now. Costs and admission standards are truly on another level and many people are walking out with more debt than grads did five years ago. College is worth it but…damn that’s a lot of money. The fear of more debt is what’s keeping me from going back for my Masters.

What about you? How do you feel about having the debt discussion in relationships?

36 Comments

  1. Craig says:

    Hi all-

    Great comments. I am recently engaged and found out in the last few weeks (after pushing for an answer) that my finace’ has around 70k in student loans (knew there were student loans but she never really leveled with me) and 10k in Credit card debt. I never even knew about the CC debt- only that she had “some credit card debt”. It is really on my mind now that I know. Not only the issue of paying but that she was never straight forward about it. We were dating for 2 1/2 years before getting engaged.

    She is now very good with money and seems to have some sort of a plan but not really. Last night I had to level with her about it let her know we need to get a plan together to pay it off (especially cc debt- 1st).

    Has anyone found out later in a long term relationship about the actually debt load and found it scary and confusing that their partner was not straight foward about the amount and type of debt? If so, I would really love some advice on how you dealt with it! Thanks!!

  2. Matt says:

    I agree with you that all should be on the table. I just had to end a relationship with someone because of this after 10 months, she has had $5000/$6000 in debt for the last 5 yrs. from going on a spending spree and hasn’t paid one penny back. I think this is a reflection of her general attitude and can’t trust her with money. This along with no savings and a lack luster attitude towards getting help with her debt, I had to end it.

  3. I’m so touchy about money in relationships for exactly this reason– my ex had tremendous debt, and after his parents bailed him out, he managed to get in massive debt again. In fact, he still owes me money, years and years later. I’m a stickler on being financially independent now and keeping everything separate because it made me so paranoid.

  4. Janalee says:

    I’m actually bad for overestimating my debt. I check my credit card statements and stuff but until last week I didn’t know the exact balance of my government student loan. I just make sure I have enough for the payments each month. Turns out hte balance is $1000 less than I thought!

  5. Elizabeth says:

    My husband and I were both very fortunate to not have any debt–we got together when we were in high school, and both of our parents paid for our degrees. If and when we decide to go to grad school, that will be on us, but at least we’ll go into that knowingly.

  6. Heidi Renée says:

    When Jason and I met, I was very up front about my finances. I didn’t have any credit card debt, just very small monthly student loan payments and my car lease, but I had to be honest about my modest nonprofit salary–especially when we moved in together a few months after getting serious. I don’t think having debt will doom a relationship, but lying about it will!

  7. Margarita says:

    I read the same article. It’s definitely a touchy subject – I don’t think it should be kept secret, but sometimes money issues are private. I keep my finances seperate from my man, but he knows my business and I know his.

  8. Mega says:

    I think its perfectly fine to discuss things like debt when getting into a longer term relationship. If that relationship turns into marriage, then her debt turns into our debt. $20k is a managable debt. I would probably use part of my savings and just pay that off and get it out of the way.

  9. Jaime says:

    I haven’t had to deal with this yet…but I can imagine it’s a touchy subject. ;/

  10. Maki says:

    I’m an embarrassingly over spender, so I could never be with another over spender. My husband can budget every thing fairy well – the way he handles me is to tell me, “We don’t have money..” I think both party needs to be honest and fair, otherwise, they can ruin their financial stability all together..

  11. katelin says:

    i’m so fortunate when it comes to debt and matt is too, but we both definitely discussed it before even moving in together and how much each of us owes and what not. it would definitely be a deal breaker if he had a ton of debt and was making no effort to pay it off.

  12. I’d be pissed if I found out later on that my spouse had a big debt he hadn’t told me about.

    I’ve always kept my financial stuff separate from my husbands. My debts are my debts and his debts are his. My bank accounts are mine and his are his. I expect him to pay half the bills. If he can’t, he’s better get a second and third job or cut down his spending.

  13. Stevie says:

    We’ve both been wide open about our debt/financial situation. We both made some poor decisions when we were younger which are still affecting us now. But the fact that we’ve both been completely honest with each other about our situations has made us much more determined to work through it together and make better decisions in the future.

  14. Grace says:

    I think it’s very important to talk about it. Having a lot of debt is ok for me as long as I feel it is legitimate. If someone has a ton of debt because they overspent I’m not likely to marry them until it’s paid off and I know that they have changed their ways. I am very careful with my finances. I have a good amount of debt from school but I pay it on time and over the minimum balance.

  15. Katie Rainer says:

    Hmm this is a very interesting point. Sure money is important as nobody likes to be in debt and feeling like they owe someone something. As you say it also depends how much debt and how long they would take to pay it off… but would I be willing to give up someone perfect for me if they had a lot of debt? I’d like to say I’d look past it and find a way to deal with it – to just cope and help pay it off if they meant that much to me.

  16. Marjolein says:

    I think talking about money in general is quite important in a relationship. You need to know how much money your SO has so you know about each other’s budgets – and spending habits. For example, I have much less money now than my boyfriend so he picks up the grocery bills for me. I’m better with money than he is though so I keep a close eye on our joint bank account to see how we’re making ends meet and whether we should change anything in our spending habits. He has already paid off his study debt, I need to start paying back mine in January so we’re already budgeting for that. I think talking about debt and money is just another part of opening up to each other and sharing your lives.

  17. Kate says:

    Talking about money in a long-term relationship is so important! It’s important to talk about it even if neither of you is in debt. Brian and I talk about money a lot, and my mom and dad (but my mom especially) talked about it all the time growing up. My mom always wanted my brother and I to have a good understanding of money and how it can dramatically affect your life. Now that I’m married, Brian and I know I am better at handling our collective funds so I handle all of the bills and savings. We live off Brian’s salary and save the bulk of mine. Being in control of how most of our money is being spent and saved makes me feel good and it makes Brian happy, too. Anyway, I guess my point is that when you are in a relationship, you need to be on the same page regarding finances. So many relationships end due to money problems — it’s an issue you can’t ignore. It’s not going anywhere anytime soon.

  18. steph anne says:

    I never really thought about it only because my husband and I were high school sweethearts. We both have debt and we knew that by getting married would technically double the debt. But to think about it if I wasn’t with him and found someone else now at this age, I would care and want to know and let him know of my debt too.

  19. Cass says:

    Debt is something that definitely needs to be discussed as the relationship progresses. My BF and I have been together almost 3 years and at this point communication and knowing the details is key. We’ve stressed that in every aspect of our relationship. He has nearly perfect credit and me, not so much. I don’t have massive debt (under $4k for school) but my credit is horrible. This is one of the reasons why the house we just moved into is under his name.

    I’ll be thankful down the line when we marry because he gets to be the one to manage the money. For some reason my math skills don’t translate well once you put a $ in front of it.

  20. Pam says:

    I am way more attuned to this than I was when I got married, but then it was a very different economic climate then.
    My (now ex) husband knew that I carried a “lot” of student loan debt into the marriage — $30K for my first degree — but he wasn’t clear about his credit card debt (I found out that he had 2 Visas, 1 Mastercard, and 4 store cards before he got out of university). Although I was the one with the debt to my name (and in the end it stayed with ME through the divorce) he was the one with the spending problems — which also caused debt AND attach to one’s spouse.
    I would not marry someone who has debt that they are not able to adequately deal with. My current boyfriend has debt in the form of mortgage… but then so do I. For now that means we can’t move forward… when things change we’ll have to sell at least one if not both our houses…

  21. My fiance definitely knew I had debt pretty early on in the relationship because we had to figure out how to afford the things we did when we went out. I was already on track to paying down my debt, and so he knew that was something I was working on almost immediately. He’s also been great for accountability. I’m more than halfway there!

  22. Arielle says:

    It’s not the debt that bothers me so much (or would bother me), it’s poor money management. The 2 often go hand-in-hand, and while I have no problem marrying someone who has significant debt, I have to be certain that they’re responsible about it. I have a ton of student loan debt from b-school but I’m very capable of managing it. I’d be okay with someone else being in a similar situation. But if they just couldn’t curb the unnecessary credit card spending? Not cool.

  23. Nora says:

    Definitely something that should be talked about when it’s a serious, committed relationship.

    I have a friend who has/had over 200K in debt from her three different degrees and her husband still married her and he’s helping to pay off the loans. (He’s a lawyer, but still! Big commitment!)

    I’ve only had the debt talk with one guy as the other relationships I’ve been in weren’t to that point (or I just didn’t have debt then) and I’m fortunate to not have much debt at all relative to most but the little that I do have bugs me. I want to pay it off myself! I’m just strong willed that way. Knowing the financial position of your significant other, especially if you want to go to the next step, is really important if you ask me.

  24. Money is such an important thing to talk about in serious relationships because it’s the root of so many failed marriages. The MLM and I talked about it right before we got engaged (I think — it may have been right after). I’m psycho about having a good credit score and no debt. I was very lucky to come out of school without debt, which had a lot to do with going to a state school, getting scholarships and having some money saved up. I also have been militant about not accruing credit card debt.

    I’m lucky because the MLM doesn’t have a lot of debt. He’s got some school debt that will be paid off in a couple of years because he’s teaching in a Title I school. He’s not great with money, but he quickly acknowledged I was and should be handling our finances. When we first talked money, I set up a budget for him that would allow him to pay off his credit card debt by the time we got married. So far so good. I think the key is to talk nonconfrontationally about money frequently enough that both people become comfortable with it and it doesn’t feel any different than talking about what to eat for dinner.

  25. Erin says:

    I’m not sure my husband and I really had this conversation before we got married. Of course, we got married relatively young so neither of us really had time to incur a lot of debt. We’re still pretty bad about talking about finances but both of us are responsible enough to pay our bills on time. To me, that’s the more important thing. Is the person responsible enough to pay their bills? Are they responsible enough to cut back on the spending if they won’t be able to pay their bills?

  26. Ray says:

    My husband and I had the discussion before we got married, and it was totally the right call. Knowing we were both carrying some student loans, and knowing we wanted zero credit card debt, the first thing we did is set up a budget (an excel spreadsheet, we’re nerds) and started aggressively paying down our student loans. And guess what? Not once in 2 years of marriage have we fought about money.

  27. If the relationship is going to become serious, I think the debt discussion is important. But, it’s more than just which person has debt and how much. It’s the kind of debt. And how they got into that debt. And whether they’re still accumulating debt. And what is their plan to reduce that debt.

    Both my husband and I had debt when we came into the relationship. I never once considered parting ways with him because of it. What mattered more to me was that he was committed to reducing his debt and was no longer living beyond his means.

  28. Sadly, I can relate. I was married to a man with debt and HORRIBLE credit. When it comes to buying a house, buying furniture for that house, getting credit cards – anything – even getting a PHONE – it all had to be done in my name because his credit is so bad.
    I am very strict with credit as well. Unfortunately, living with someone with no credit when they realize you can buy anything whenever because you have good credit – they take full advantage of that. So I am now in debt (still paying for the wedding IN FULL because he can’t control his money).
    Anyway – that was a long comment…

  29. mandy says:

    I wouldn’t discuss debt until the relationship was really longterm/serious. I put myself through school and have the student loan debt to prove it. That was a choice I made and today, kids usually can’t get through school without huge amounts of debt. Unless the other person is going to be affected by my debt I don’t really think its any of their concern.

  30. Debt is definitely an important thing to discuss in a relationship!! When me and Eric first started dating he was NOT good with money and was heading down the debt road. I managed to “teach” (through a lot of fights and nagging) him how to save and now – as far as I know – he’s on top of paying off his credit card and has a savings account that he feeds regularly.

    Neither of us have any major debt, yet. But with him going back to school this year there is a definite possibility of him building up some student loan debt. Though, I’d rather he have that then any other kind of debt!

  31. I really agree with most people- I would NOT marry someone if they had a lot of debt. I don’t have a lot of debt thankfully- same boat as you- under 20k in school loans, no CC debt (well, I don’t consider the $500 to be “debt” since it’s not that much). I do have a car loan, but again- don’t feel that is overwhelming. I comfortably pay my bills each month and have a fantastic credit score to the point it blew away the girl who I was working with for my car loan. I really give credit to my parents though who taught me how to manage money. I don’t budget every little penny, but some things that got me to where I am now:

    1. pay all bills on time
    2. never touch your savings unless absolutely necessary. I wasn’t actually allowed to touch my savings until I was 18.
    3. Credit cards are the devil. They are. I only have one and I can see it online from my bank. For awhile it was hard to pay off, but my tax return helped and now it’s manageable. I wasn’t allowed to have one of these either, but finally got one at the age of 20.

    I fear that conversation with a future fiance, but it’s completely necessary to know where things stand. I think you need a solid financial foundation before building that life together.

  32. Lil' Woman says:

    Me and Big Man have had the debt discussion…I’m only in minimal debt but were working through it together before we tie the knot. I’m paying off the bills with my checks while he is using his to save for the house. It’s a good compromise for us now.

  33. i think it is super important – i’ve worked hard to manage my debt and have a decent savings. so if i’m in a serious relationship headed towards marriage it will be a convo we’re having. i’d care more about credit card debt more though than college loans, but i think being honest about finances is super important in any relationship.

  34. A Super Girl says:

    I agree that this is really important. I’m more than grateful that neither DD or I have debt (whew!).

    Another aspect to this conversation is the idea of assets. I lived at home and saved the majority of my income for about 2 years. Since then, I’ve always lived well within my means, being extra frugal. This means I’ve got a nice rainy day fund. But, what happens when DD and I get married? How and where does that money fall into the marriage? What about his assets pre-marriage? It’s hard to strike the balance of sharing, but also protecting yourself.

  35. Maggie says:

    I think discussing finances is definitely important in relationships, although it’s not something worth discussing unless the relationship is serious. Luckily chris & I have no student loan debt and made it a point to pay off our credit card debt before we bought our house. Had either one of us been dishonest about our debts I would consider that to be a deal breaker.

  36. lbluca77 says:

    I think debt should be discussed once the relationship gets to that point of being serious. But I think it also depends on the kind of debt in determining how you feel about it being a part of your relationship. For me a lot of credit card debt I would have issue with. School loans not so much because you have that high debt at the cost of getting an education. People with huge credit card debt didn’t always spend wisely and really have nothing to show for that debt.

 

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