Need Advice About My Girlfriends Debt

[vincentvegas]

Thank you for taking time to read my post and helping me with my situation.

First off a little background about me: I am 37 years old and have been dating my girlfriend who is 33 for a little over a year. I am a healthcare professional and make a decent income, however while in professional school I amassed student loan debts and still owe right at 90k. My loans are about average for my profession and I have a plan in place and am on pace to pay those off ahead of schedule. While I use my credit card for all my purchases, to earn points, I pay it off in full every month religiously and never carry a balance. I am in a business that will most likely eventually require me to take out a large business loan so keeping my debt and credit in check is a big deal to me and I am meticulous about it.
About 10 months ago (4 months into our relationship) my girlfriend informed me she was swimming in a sea of debt. While she has never told me exact amounts, at the time she ball parked her student loans at somewhere around $100k (she was deferring them at that time and I assume she still is) and her Credit Cards were around $18k. She is a teacher so she has a stable job and a good career, but she doesn’t have the kind of income that can justify $100K in student loans. She doesn't have a history of sickness or being out of work or any justification for so much credit card debt either. In fact her house was full of signs of frivolous spending on luxury items (large CD/DVD collection, three closets packed full of clothes, expensive new furniture in most rooms, concert tix... Etc). On top of her other debts she also had a house payment and a new car payment. At that time she told me she wasn’t able to pay much more than the minimum on her cards (and that's with the student loans being deferred). In spite of her debt, I think she is a keeper and want to work with her to help resolve the debt, so I helped her formulate a plan to try and dig herself out of the hole she was in. From what I understand about student loans, one can generally only defer them for 36 months. The plan was to rent her house (after we unsuccessfully tried to sell it) and then have her move in with me, rent and utility free, in order to free up approximately $1400-$1500 a month to put toward the Cards and hopefully get those knocked out before the government came calling for their student loan money. We have been living with that arrangement for going on 8 months now.


So here is my Dilemma... She is a really great girl and we get along very well. She is very morally sound and I really think she is trustworthy. I just think she is really, really bad with finances. I love her parents and they are solid folks, but I don't think they gave her much direction at all when it comes to money and she still seems to be clueless as to how to spend inside a budget. We are talking marriage and she recently picked out a 2 karat $12K ring. I have told her on several occasions over the past 8 months that for us to advance our relationship to the next level (engagement) I need to know exactly what she still owes, who it's owed to and at what interest rates (info she has never given me and seems to tune me out when I bring it up). In turn I will provide her with the same info about myself. I still see her spending money on luxury items (shoes, trips and nic-naks like candles, etc…) all things I know she doesn't need so I’m a little suspicious that she isn’t living up to her end of the deal on paying the cards. I don’t think she is doing it on purpose, I just think she has a spending problem and is in denial of her bleak financial outlook. Also I am sweating when the day comes that she has to start paying the student loans. At only 5% and 10 years (typical student loan interval) that payment will be $1061 per month, which is a little under half of her monthly income. Throw in the car payment and she is back to making the minimum monthly Card payments again even though she doesn’t have to pay rent or associated bills. I have worked very hard over the years to stay in the black with my credit cards but I know the reality is that if I want to stay with and marry my girlfriend I will eventually have to absorb some of this debt, most likely at least taking over her car payment. Am I being unreasonable to ask for full disclosure? I have already brought it up a couple of times and really don’t know how to do it again. I don’t want to be in a situation where I am breaking the bank for a ring and then find out that she is still $18K deep with a $1000 student loan payment around the corner. If you have any advice on how to handle this situation I would greatly appreciate it... Thanks again for taking the time to read this lengthy post.

[disneysteve]

HUGE red flags throughout your story! The biggest reddest flag is her refusal to be honest with you. That is no basis for a relationship going forward. If she can't be open about her debt, what else will she hide from you? I can see her being the type to hide purchases, lie about what she's spent, etc. Yes, I realize she may be embarrassed about it but if she can't open up to her potential husband, who can she open up to? The fact that she's looking at a $12,000 engagement ring certainly shows that she is clueless about money. The fact that she continues to blow money on wants before taking care of needs shows the same thing. By the way, I hope you told her there was no way in hell you were spending that kind of money on a ring.

What advice would I give other than to move on? If you want to give this relationship one last shot, sign the two of you up for Dave Ramsey's Financial Peace class. You pay for it and both of you go together. If she completes that course and still shows no signs or interest in changing her ways, I'd cut her loose. If, however, the class finally makes her see the error of her ways and sincerely want to change things, then there might be some hope here but I'd cut her very, very little slack in the process.

[imianharper]

I think you should tell her that you also have plans for your own. She should save money for herself so that she can't just rely on you.

[bjl584]

Welcome,
You need full discloser and full cooperation if this relationship is going to work. There are lots of red flags with her behavior that worry me. I would definitely want her on the same page financially with me before I ever even considered marriage. Good luck to you.

[Joan.of.the.Arch]

No, you are not being at all unreasonable to expect full disclosure. I would ask to actually see the bills and letters granting deferment, too. This is a really big deal. She is drowning and might pull you under, too. Be rational.

[snshijuptr]

Try making a "life plans" date. Cook dinner in and create a relaxed environment to both talk about your life dreams together and the steps you will take to get there. DH and I, when we were dating/engaged, would often have date nights where we would discuss our financial and lifestyle priorities.

Finally $12K is a ridiculous amount for a young couple to spend on an engagement ring. Once you are both well established and have no debt, you can upgrade her to another ring if she really MUST have it. $12K is how much you need to raise your child during their first year of life. Would you really want your wife wearing that around her finger?! (I have an inherited diamond that is highly flawed, .9k, in a beautiful setting that cost my husband less than $1K.) Reminder to always check out Pawn Shops and Jewelry Marts before buying a ring. Do not buy a ring from a department store or an Engagement Ring Store. These places rip you off. You can usually get a ring custom made for the same price these stores charge.

[disneysteve]

Once you are both well established and have no debt, you can upgrade her to another ring if she really MUST have it.

Sorry, I know this is OT, but this is simply ridiculous.

Any woman who insists on "upgrading" her engagement ring has entirely missed the point of an engagement ring. If you change the stone or the setting or the entire ring, then it is no longer your engagement ring. It is just another piece of jewelry. And its size and value should reflect where you both were in life at the time it was purchased. If she doesn't like it, that's too damn bad - then she shouldn't say yes, and if she bases her decision on the size of the stone, you don't want to be marrying her anyway.

Ok, I'll step off my soapbox now.

[SeanH]

If you marry her you will be taking over all of her debts. She doesn't understand the value of money and it appears you've already rescued her once now to the tune of +$10k and counting.

[snshijuptr]

@DisneySteve - Thus the emphasis on MUST. I don't disagree with changing your ring over time, sometimes you just prefer a new style. I do disagree with using one's wedding band as a symbol of affluence instead of a reminder of your love (which shouldn't be bought).

[Coronet]

I know this isn't what you want to hear, but I'd run away and fast.

If she has $100k debt she hasn't started repaying at age 33 that's a terrible sign. Her debt becomes YOUR debt when you marry. I wouldn't even consider marrying her until she's already repaid a large chunk of that! You're going to get saddled paying her debt and taking care of her for years and years financially otherwise.

Also, a 2 carat $12k engagement ring is ridiculous.

[LivingAlmostLarge]

Time for full disclosure. I don't believe it's necessary until you are serious, which you are, and talking marriage. Until then people have a right to privacy, but I'm speaking as a married 32 year old who has MANY single girl/guy friends who didn't marry until late 30s/40s. So hearing them, they don't expect full disclosure in the first months of dating because you are deciding.

But by this point? Hell yes. The statements of what is owed should be produced, credit reports, etc. You are about to embark on a marriage and everything should be out in the open.

I have a very small engagement ring, bought when my DH was very poor. He asked if I wanted a "new" engagement ring, i said why bother? I don't wear it anyway now, I was much thinner and it doesn't fit. But seriously the ring should reflect where you are when you marry.

My friends have 1-2 carat diamonds that are $20K+ platinum rings, I have $1k white gold ring and I love it. It is what it is. Would I trade my ring to have met my DH 15 years later when he's making the money he is now? Nah, we had a lot of fun these past years.

So it's a matter of perspective.

[neatdesign]

Instead of being a spendaholic, let's pretend that your girlfriend was a confirmed alcoholic.

• Would you buy her alcohol?
• Would you make excuses when she drank, even though you know it's putting her health at risk?
• Would you give her the benefit of doubt when she dodged your questions about how much alcohol she drinks?
• Would you confront her if you discovered empty bottles hidden throughout the house?
• Would you spend $12,000 on a vintage bottle of wine for her?
• Would you let her drive your car after she'd been drinking?
• Would you stay with her after she repeatedly turned down going to rehab and AA meetings?

If you can say "yes" to any of the above, you would be considered an enabler. But honestly, it's not so different from the situation you're faced with now. The only difference is that it has to do with money instead of alcohol.

Just like an alcoholic, your girlfriend has the ability to turn things around, but only SHE can do that for herself. And right now you're not giving her any reason to do that. You allow her to live rent-free, pay no utilities. I'm sure you pay for a lot of other things for her as well. You make excuses for her and don't confront her when you notice her frivolous purchases or when she dodges your questions about how she's managing her finances. And on top of everything else, you even let her pick out a $12,000 engagement ring -- that you will pay for 100%, of course.

As long as you continue to let her off the hood and bail her out, then things are not going to get better. In fact, I'd say they're only going to get worse. You need to start asking yourself some really tough questions and answer them honestly. There are actually quite a few online articles about this: just Google "pay girlfriend's debt" and check out the results.

p.s. Re the $12K ring, I'm in the "that's ridiculous" camp. My husband proposed to me with a plastic ring he got out of a vending machine for 25¢. I never actually got a real engagement ring, but what I did get was a great story that everyone finds sweet and memorable.

[selina_z]

I think her loan is so huge, you need to think carefully about this relationship. Additionally, She seems not so honestly to you, especially for the finance. Then how you can give out your trust so freely.

[innoweb]

that's really an issue huh..I think she must learn how to live within her means, she must know how to budget to avoid such problems in debts..perhaps you give her some advises also on how to manage money properly.

[BMEPhDinCO]

It sounds to me as if she's holding on until you marry and are making enough to take care of her without her having to deal with it....your profession sounds like it is such that she expects to live well off you.

That said, you have $90k in student loans and as such, she might not see her $100k as too much different....but in reality they are both huge amounts and starting a marriage with over $200k (adding in car, etc) in debt would be a bad idea.

I would email her or call her and ask for a formal "financial date" night. Bring all YOUR expenses, bills, income statements, etc to the meeting and ask her to do the same. Then both of you come up with a plan together about what you want to do. If she isn't willing to do this now, she won't be later and I wouldn't marry her.

My DH was pretty clueless about finances before we married, but he was willing to be open to my help and to let me coach him along. If she's not, that's a bad sign.