I have debt, she doesn't - what should I do?

[Sinay]

Hi, I’m new here and would like to ask some advice. I came to Canada 2 years ago and found a great job very quickly. I’m an electrician and have a Union job, making more than $36/h. So, new country, good money, single, mid 30’s, no kids, you get the picture. I rented a nice expensive apartment, bought a new expensive car, was eating out EVERY DAY, nice and expensive clothes, expensive nights out, expensive gifts to friends and family. I spent a lot and I spent what I didn’t have. My current debt is around $23,000 in 3 credit cards.

I’m here to ask not about a budget but about finances in relationships. Some time ago I met an amazing woman, we started dating and we are talking about marriage. She works in a lab and makes less than me (around $27/h) but is way smarter, has a great condo (still paying mortgage), NO debt at all, spend less than she makes, the whole thing. She’s also a David Ramsey fan (I’m reading his book right now).

So, my question would be… she believes a couple has to share everything, good and bad, but I feel such a loser having accumulated so much debt (in a very short time), have nothing to show and now she will help to pay for MY mistakes? How would you guys deal with a situation like that? If we both were young and just starting life together it wouldn’t be a big deal, but I don’t know, being closer to 40 than 30 (both of us) I’m having problems with that. She’ll be the one in charge of our finances, she’s very organized and enjoys this kind of stuff, but I don’t know, I still think I should pay for my debt alone, not to mention I will be moving to a nice house that she bought and started paying before me. Shouldn’t I at least give her the same amount she alread put in her condo so we would be 50/50?

Am I being too stupid?

[maat55]

I believe when two people marry, they become one. This would mean that you would work together and share this burden. This is how bonds are formed.

Later, when your debts are paid, you will be contributing together towards your dreams. The more you think as one, the more you will be one. Welcome.

[Diolla]

It sounds to me like you have found a wonderful woman. She isn't holding your past over your head why should you? If you are ready to embrace her ideas about how you both should spend your money (plural your) then instead of thinking about the negatives why not focus on the positives. You are bringing a considerable increase in income to the relationship. If you follow her lead you could have this debt behind you in no time and build towards a fantastic future.

As long as you have been up front and honest AND are willing to work with her to clear out these debts I don't see the problem. As Dave Ramsey might say "I've done stupid" but now you are ready to put that behind you and work towards the future.

[tripods68]

Welcome!

The first thing you need to do is STOP using your credit card completely. If you are committed to this relationship and willing to change to be with HER, payoff your debt as quickly as you can and most of all your lifestyle has to change.

That means, stop eating out everyday, stop buying expensive clothes, and buying gifts to friends and family. You need to develop a sensible budget so you can still go out and buy your favorite clothing lines from time to time. But the habit of showing off to your friends and family really need to stop. Grow up, and be the man. It seems your are already doing the first step in that you're reading Dave Ramsey book. Keep it up.

[kork13]

Agreed. There are 2 things you can do, which really, I would recommend you do both.
*First, get over your feelings of doubt/insecurity about bringing debt to the relationship. It seems that she is not angry or begrudging about your debts--she just wants them to be taken care of. You seem to have a great relationship, so don't get worked up about it. You can take care of it together.
*Second, do what you can now to get rid of as much of the debt as possible before you do get married. For every dollar you pay off now on your own, that's one more dollar that together, you can put toward your lives together. As tripods said, we can help you work out a plan for paying down your debt, just give us the info about your income, expenses, and debts, and we're happy to help.

[Sinay]

Oh yes, I know I have an amazing woman, and I sure don’t want to lose that LOL!

I really don’t have lots of expenses but this is what I spent last month (the 1st time I tracked everything). I'm sure you will see many ways of cutting everything, even I can see how ridiculous these amounts were:

Income: $4,484 – this amount is after taxes and contribution to my RRSP (retirement)

Rent: $1,544 – everything is included, electricity, water heating, AC, etc. This will be gone after we get married, we’ll live in her condo (which is way nicer than this expensive one I’m renting, go figure!)

Food/Eating out: $736 – I know, it’s ridiculous, but I can’ even boil an egg and pre-prepared food is really expensive. Not to mention all the eating-out with friends, restaurants, coffee and Saturdays in the pub… this will change this month, my fiancé is helping me cooking lots of food and then freezing them.

Clothes/Tools: $378 – some new work clothes but mostly new tools, it’s my weakness. I HAVE TO STOP!

Car payment: $411 – still have 2 years to go

Car insurance: $234 – I’m new in the country so it’s expensive. We’ll join our insurances after marriage so I’ll be under her policy and it’ll be way cheaper than that.

Gas: $467 – I know this is a lot, but I have to commute to work, I can be in different places every week and sometimes it’s far from my city.

Soccer club: $80 – it’ll be gone this month, no soccer during winter.

Gifts: $412 – I send gifts to my parents, sisters and nephews all the time back in my home country, obviously something that will have to stop.

So, math of the numbers above says that I’m living *within* my means, but the reality is that I have $23,178 in 3 CC that I have to pay. Also, I was using CC to pay for most of my things. This month I stopped using CC and really decided to attack my debt, so it’s been a learning experience.

PS: Edited to add: internet/phone/cable TV: $148

[Sinay]

I forgot to add, my CC are:

Visa: $11,456 @ 12.50%
Mastercard: $8,532 @ 4.99% until December, then 19.99%
AMEX:$ 3,190 @ 11.50%

[maat55]

Going by Dave Ramseys plan will get you out of debt quickly. Together, you two need to have a financial plan. How much to invest, how to invest, how to pay for consumer products with or without debt, future goals, type of lifestyle.

Many people wait till after marriage to figure these things out. I strongly suggest that you read Smart Couples Finish Rich by David Bach. It will show you how to work together.

[MYOM]

Financially you are not a good match. Her core financial values and yours are diametrically opposed. If I were she or you, I would insist that you pay your debt off before I would even consider marriage. You both need to be at the front of your financial wagon pulling together in the same direction. Right now she is at the front of the wagon and you are pulling hard in the opposite direction. You continue your extravagances and you will soon become a financial failure, which is chapter #1 in my book.

Pardon me for telling it like it is.

Dan Clemons

[kork13]

You're right, there is alot of give in those expenses. How much are your credit card payments each month? What savings do you have, how much in your checking, etc? Where are you currently living? Just adding up the expenses that you provided, that's $4262/mo, not including CC payments. So including those, it seems that you're spending just about every penny you make, if not a bit more.

For the rent and insurance, shop around. Could you move into a smaller, less expensive apartment? That alone could save you $500-800/mo. Also, look for a different insurance company, and look for ways to decrease your payment, such as having higher deductibles. You might also look at refinancing the car, depending on what your current terms are.

Take a cooking class, and buy some beginner cookbooks (which will explain exactly how to prepare meals). Or, ask your GF/fiancee (?) to help teach you to cook. Cooking on your own will take your costs from $10-$20 per meal to about $2-$4/meal. Plus, it's normally much more healthy for you.

Gifts, new clothing, tools, etc. all clearly need to be drawn back on. Not necessarily eliminated (though not a bad step), but at least cut back signficantly on. You could try basically allowing yourself only a certain $$ amount for these essentially optional expenses.

With gas, even without changing your vehicle (again, wouldn't be a bad step), you can make some changes to the way you drive to get better mileage, which could save you some more money.

Depending on what savings you have (or don't have--you do want to have at least some saved), use money saved to focus in on your debts, and pay them off.

[Diolla]

Financially you are not a good match. Her core financial values and yours are diametrically opposed. If I were she or you, I would insist that you pay your debt off before I would even consider marriage. You both need to be at the front of your financial wagon pulling together in the same direction. Right now she is at the front of the wagon and you are pulling hard in the opposite direction. You continue your extravagances and you will soon become a financial failure, which is chapter #1 in my book.

Pardon me for telling it like it is.

Dan Clemons

I disagree, he WAS pulling the opposite direction and now he is learning there is a better way. To me it sounds like he is trying but still learning how to make things better. Putting away the CC's is a good step, having his GF help him make some cheaper home meals is a good step, tracking your spending is a good step. I agree that you need to budget a set amount for the things like Gifts and Tools but I think like a woman who likes to buy clothes you probably already have all the tools you NEED and now are merely indulging youself. Plan out your gift giving and make sure the gifts are within a reasonable budget (considering your other obligations). Ask your GF what she thinks, she could be a good mentor for you.

I don't think you are going to turn from being a spender to a saver but between the two of you you can strike a good balance. She keeps you from being too extravagant and you keep her from never having a little fun.

If you really want to I think you can do it. I really think trust and communication is the key.

[disgruntable]

The best thing I could tell you to do to come to amends with your conscience is to make sacrifices. If she is living within her means, you need to live well below yours. If she is having lunch out once a week, you need to not eat out at all. If she has a beer now and then, you need to have water. Do every tiny little thing you can to pay the debt, and that's all you can do to satisfy your guilt.

[JeanneElle]

I commend you on your good intentions!

What I would do is cut up your cards, and ask your girlfriend for tips on how she manages her money as well. My philosophy in life is that if you want to learn something right, ask the people who are successful.

I do NOT believe she should share your debt. That's like saying I should drink too because my husband is an alcoholic, or I should smoke too because my boyfriend has a pack a day habit, etc. There is absolutely no reason whatsoever that you cannot have a wonderful relationship and healthy bond without her paying for your past mistakes.

That being said, give yourself a HUGE pat on the back for your desire to change. She's lucky to have found someone with a great attitude :-)

[maat55]

I commend you on your good intentions!

What I would do is cut up your cards, and ask your girlfriend for tips on how she manages her money as well. My philosophy in life is that if you want to learn something right, ask the people who are successful.

I do NOT believe she should share your debt. That's like saying I should drink too because my husband is an alcoholic, or I should smoke too because my boyfriend has a pack a day habit, etc. There is absolutely no reason whatsoever that you cannot have a wonderful relationship and healthy bond without her paying for your past mistakes.

That being said, give yourself a HUGE pat on the back for your desire to change. She's lucky to have found someone with a great attitude :-)

I personally think the advice you give is better used before marriage. Comparing finances to alcohol is like comparing apples to oranges. All couples have to agree on financial decisions, to some degree.

If you marry an alcoholic, though you choose to not drink, you are affected by their actions. It's far better for two people to be on the same page financially than separate. That's like saying if your partner stumbles, you will not help them up. If you do not want share everything, why share at all?

To some it may depend on what their values are. Vows like for richer or poorer, in sickness and in health and till death do you part, should have value.

[JeanneElle]

I personally think the advice you give is better used before marriage. Comparing finances to alcohol is like comparing apples to oranges. All couples have to agree on financial decisions, to some degree.

If you marry an alcoholic, though you choose to not drink, you are affected by their actions. It's far better for two people to be on the same page financially than separate. That's like saying if your partner stumbles, you will not help them up. If you do not want share everything, why share at all?

To some it may depend on what their values are. Vows like for richer or poorer, in sickness and in health and till death do you part, should have value.

That's a good point.

Maybe then the answer would be an extended engagement, which would give him time to organize and establish a debt repayment plan. However I still believe that she shouldn't have to pay for his old debt. Now new debt that they accumulate together... that's a different story.

Mind you, she is a grown woman and it sounds like she knows how to manage her finances, so if she feels that she can afford his debt, then it's not really my place to judge...