Marriage and Debt

npasquale16

Here's the article:
http://finance.yahoo.com/banking-budgeting/article/110604/how-debt-can-destroy-a-budding-relationship

So, what do you think?  Did you or FI/DH bring a large amount of debt into the relationship? When is it appropriate to disclose the amount?  What type of debt or amount (if any) would make you think twice about being with someone (i.e. school debt, CC debt, etc)?

Steph0871

I haven't read the article yet, but I will!

FI and I both are bringing quite a bit of debt into the relationship; but it's equal?  It was all accumulated while we were together, too.  It's almost entirely student loans, but a little bit of CC debt too.

We've fully disclosed; in fact we keep it all in a spreadsheet together.

aprovencher21

Eh FI brought a lot of debt to the relationship 5 years ago.  It was credit card debit and awful.  When we realized that we were in this for the long haul we disclosed all finances and debt to one another.  Though we don't have joint accounts I have access to his account and actually pay all of his bills.  He's just bad with money and understanding limits and paying things on time. Its his one major flaw and I've come to terms with it.  I've spent 5 years getting him to have little to no credit card debt (as in less than $1000) and learning to budget.

I would never hold student loan debt against someone.  I'll have quite a bit once I finally graduate. 

katiewhompus

I feel like I've read a thread about this

We moved in together early in the relationship and I took over finances. I had a student loan to my name and then we also purchased my car. Scott has his student loan, his bike and a credit card bill from when his car broke just before we started dating.

The credit card is now gone and the next thing on the list is paying down his bike. We have about $4k in student loans between us so that is also quickly disappearing.

number55

I have about two grand in student loans. He has more than fifteen. fifteen. He owes two grand on his truck. So he has pretty much 8 - 9 times as much debt as I do but our amount together isn't brutal. There wasn't so much to disclose really, these aren't things we would not talk about. We have no reason to hide either of our debt. Neither of us carry any credit card debt. I did once and swore I never would again.

npasquale16

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:31c0cc70-bad4-456b-8025-66b572a1fe9e">Re: Marriage and Debt</a>:
[QUOTE]<strong>I feel like I've read a thread about this ;) </strong>
Posted by katiewhompus[/QUOTE]


Recently?  I didn't see one.  Sorry for the repetition :(

Steph0871

Ugh, now I feel bad.  Combined we have about 80K in loans (I have a BS, J has an AAS and BS), but we both paid for our educations on our own.

I think we'll have it paid off in about 5 years though (instead of the 10 year loan length.)  We're also only 24 each, if that makes a difference.

npasquale16

I'll answer my own. 

I was in CC debt (nothing major, just about 2500), but it was terrible.  Once I paid everything off, I vowed to never have debt again.  I also went to college on a full scholarship, so I really didn't have nay experience with debt except what I ran up myself.  FI is way more fiscally responsible than I am.  He budgets for everything and really plans ahead. We both know each other's financial history.

Now, I'm in school and he is planning on going back to finish his Bachelor's, so we'll definitely be facing some major loan debt (prob about $25K between us), but we're also saving for that.  It's stressful, but school is the best option for us and we'll both be making more once we finish. 

I can't imagine not disclosing my financial history before we were engaged, though.  We both are very clear about what we have and what we're entering into.

Lenore2010

I finished paying off a total of 71K in student loan debt the month before we got married. H had no debt at all, with the exception of the remaining mortgage on his house.

I would only hold debt against someone if I thought it came from a pattern of reckless overspending that was an ongoing problem. I admire people who get in too much CC debt, figure out they screwed up and deal with it and don't repeat the mistake. Student loans? Well, with parents barely able to afford a non starvation retirement, I would say student loan debt has become the American Way, sad as that is.

npasquale16

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:a918bc62-e1fc-486d-8831-651755df8eab">Re: Marriage and Debt</a>:
[QUOTE]In Response to Re: Marriage and Debt : Just teasing ;) It was over on E so most people here probably haven't seen it yet. I think it does make a lot of difference with debt/income too. He may have come into the relationship with more debt but he also made more money. Currently he makes twice what I do if you don't count his bonuses, and about four times what I do if you do include bonuses.
Posted by katiewhompus[/QUOTE]

Okay, I feel better :). I haven't lurked on E today.

I hate when someone starts a thread and then a new person asks the same exact thing later on.

K Byte

The only debt I have is the few thousand remainder of a car loan that will be paid off in about a year from now, and our TV which we're financing at 0% for I think 18 months. It will be paid off before that though. H has nothing. My credit score is around 800 (H's is lower because like a lot of people our age he was completely afraid of credit until he was out of undergrad, but it's still solid). My parents are also both in the 800+ credit score club, with just their mortgage and car loans. I've never paid a bill late or maxed out a credit card or gone into default/collections. Financial responsibility is really important to me. I think I would be ok with student loans, but if someone had an amount of student loans equal to a mortgage I would feel weird about it, I'll be honest, especially if he didn't have a good job to start paying them off.

I started work in collections/creditor's rights law and WOW, debt can really fuuck up your life, and attorneys and debt buyers have a lot of rights and resources to collect debt. 

Steph0871

Oh, good points K Byte.  I should mention that, even though we both have quite a bit of debt, we can manage it.  And we both have credit scores above 750+, which for our ages, I think is good.  I have a car that I purchased and paid off as well.  I'm still terrified of one of us losing a job though.  I don't know what we'd do financially, considering we'd like to buy a house soon.

aprovencher21

Um from paying for two graduate degrees I will have about 150K-175K in student loans.  It hurts.  It hurts a lot.

I better get a fantastic job. 

katiewhompus

I agree with debt from being stupid and debt from life happening. Scott's credit card debt was not created having fun, it was created when we had to fix his car. If it weren't for Uncle Sam we would be doing the same thing tomorrow. I think I would have had a much harder time if the money was all blown on stupid (admittedly, stupid to me) type of stuff.

npasquale16

Debt is pretty scary when you consider all of the ramifications. 

For us, it's a matter of not being able to advance without further our education, so taking on school debt is a burden we're willing (and financially able) to bear right now.  Like Steph, the thought of losing one of our jobs does scare me, but we've planned ahead and it is actually possible for us to live off of one salary.  Coupled with our plan to move to a less expensive area of the country, I think our plan is pretty sound.  But it is still scary!

aprovencher21

The only reason I'm willing to take on that much student loan debt is because, heaven forbid, I don't get a job right away or somehow never we can pay my student loans with just FI working.  It would be easy but we could do it.  We view the money I'll make when I actually work in my career field to be gravy.  We own our home so we'll focus for the first few years after I'm done school to pay off large chunks of my school debt. 

I do have to say.  With my good credit a lot of student loans have an interest rate below 2%.....not too shabby.

K Byte

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:9427ef02-cf59-4cb0-96fb-95d41d4819fb">Re: Marriage and Debt</a>:
[QUOTE]<strong>Debt is pretty scary when you consider all of the ramifications.</strong>  For us, it's a matter of not being able to advance without further our education, so taking on school debt is a burden we're willing (and financially able) to bear right now.  Like Steph, the thought of losing one of our jobs does scare me, but we've planned ahead and it is actually possible for us to live off of one salary.  Coupled with our plan to move to a less expensive area of the country, I think our plan is pretty sound.  But it is still scary!
Posted by npasquale16[/QUOTE]

It really is. If you borrowed 150,000 for college, at 3.5% if you had pretty good credit, and tried to pay it off over 120 months - 10 years - you'd pay nearly $1500 a month! It would be damn near impossible to move on with your post-college early adulthood life with that amount of debt hanging over your head. At a sort of average entry level salary, an huge chunk of your salary would just go toward paying off debt. Couldn't afford a home or even a nicer apartment, or a car, or anything, just your student loans. =/ And a lot of people who carry that much or more in student loans have them from undergrad, not even grad school.

katiewhompus

I think part of it is I don't really think of student loans as debt either, they are more of a bill. Basically if something takes more than 2 months to pay off in my mind it's just a recurring bill. I keep having to remind myself that we don't have to pay $300 next month on Scott's credit card.

Shaye526

We didn't bring a lot of debt into the relationship. I would think it's appropriate to disclose the amount when you start living together (assuming that's before you get engaged).

I'm not sure if there's any amount that would be a dealbreaker, so much as what types of things money is owed on. I might be ok with $60K owed in student loans as opposed to $60K owed on parts spent on a model car-building hobby, you know?

aprovencher21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:f35fa43c-7f69-4f45-8dba-3cfc89e1e7d8">Re: Marriage and Debt</a>:
[QUOTE]Debt due to school and debt due to irresponsibility are completely different things in my mind.  Although, some (not me, but some) would argue that racking up so much school debt is irresponsible, like the girl in the article with $555K in loans.
Posted by npasquale16[/QUOTE]

I haven't read the article yet......but how in the WORLD did she get to $555K.  What in the world.  How many degrees did she have? 

Shaye526

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:a64ca32c-96bf-4801-a43c-d918eb88daba">Re: Marriage and Debt</a>:
[QUOTE]In Response to Re: Marriage and Debt : I haven't read the article yet......but how in the WORLD did she get to $555K.  What in the world.  How many degrees did she have? 
Posted by aprovencher21[/QUOTE]


That's what I'm thinking. $555K debt on ANYTHING seems ridiculous to me, unless maybe it's your mortgage.

aprovencher21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:16938cac-e837-4b22-972e-5298b8006152">Re: Marriage and Debt</a>:
[QUOTE]In Response to Re: Marriage and Debt : That's what I'm thinking. $555K debt on ANYTHING seems ridiculous to me, unless maybe it's your mortgage.
Posted by Shaye526[/QUOTE]

I guess I don't count our mortgage as debt more as a bill.  I can easily see $555K being a mortgage/debt..........but not school loans.  I still have NO idea how to get it up that high (not like I'm going to try or anything).

Shaye526

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:d23020c0-65bb-4d4e-ba55-992f326617d2">Re: Marriage and Debt</a>:
[QUOTE]In Response to Re: Marriage and Debt : I guess I don't count our mortgage as debt more as a bill.  I can easily see $555K being a mortgage/debt..........but not school loans.  I still have NO idea how to get it up that high (not like I'm going to try or anything).
Posted by aprovencher21[/QUOTE]

Yeah I don't know. Maybe I live under a rock, but WTF school are you attending that costs that much? I feel like you'de have to attend 6 different schools, change your major 4 times and have 3 degrees aferward to rack up that amount.

aprovencher21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:ae55af4f-a144-4337-abd9-686e1ccfdbdd">Re: Marriage and Debt</a>:
[QUOTE]In Response to Re: Marriage and Debt : Yeah I don't know. Maybe I live under a rock, but WTF school are you attending that costs that much? I feel like you'de have to attend 6 different schools, change your major 4 times and have 3 degrees aferward to rack up that amount.
Posted by Shaye526[/QUOTE]

I'm guessing she didn't just borrow for tuition but also living expenses and such.  Though where I went to undergrad the tuition plus room and board is almost $60K a year.  I can see where messing around with degrees and borrowing to live could lead to serious debt.  My MBA program cost about $55K a year.....without room and board cause I lived at home.  School is sometimes just really expensive.

quotequeen

If the $555k is the article I'm thinking of (from a while ago), a lot of that came from not paying on the loans and racking up interest and late fees.

aprovencher21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_marriage-debt?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:e41e9d91-5e91-400c-a970-71e755b04b03Post:acf2eef8-8f5b-479d-95f0-02e45d8ed6f8">Re: Marriage and Debt</a>:
[QUOTE]If the $555k is the article I'm thinking of (from a while ago), a lot of that came from not paying on the loans and racking up interest and late fees.
Posted by quotequeen[/QUOTE]

Oh well that makes sense and is bad.