Do I pay off my husband's debt?

[hawkeyedre]

Help! Sorry this is long, but it's a complicated situation. My husband and I have been married 11 months. We chose not to combine finances because I brought a net worth of $153,000 to our marriage and he brought a lot $60,000 in debt. I am also EXTREMELY anal about my finances. Besides my house which is half paid off and very modest, I have never had any debt. So I can't relate. His debt isn't from being irresponsible, but from student loans and living expenses during college since he couldn't work. I have done everything without handing him money to help him out. I pay 100% of the mortgage, utilities and internet. I owned the house before I met him, so I figured I'm not our any money because my utilities barely went up. I also took a second mortgage out on the house to consolidate his debt from 10%+ to 4% interest rates. He's paying a few extra hundred a month towards his bills but it's still taking forever to payoff and I have a hard time watching him live paycheck to paycheck. He still has $46,000 left.

Here's where it gets complicated. We want to have kids right away, but he also wants to have his debt paid off/down first. I can afford to help him pay off his debt now, but I also pay for all of the maintenance, upgrades, and decor around the house. Just this year, I've spent $12,000 on updating our kitchen, replacing windows and carpet, our honeymoon and our one year wedding anniversary trip next month to the Cayman Islands. This spending isn't normal, we needed a lot of updates and maintenance this year, but basically everything is done now. This will also be our last nice trip for a long time since I'm going back to school. Most of my money is invested. $12,000 is in the bank, but I have that set aside for a furnace and AC that could go out any minute. I have extra money each month, but that usually goes towards maxing my Roth and now I've decided to also go back to school starting next month. My tuition will be about $3,000 per year part-time for 4 years (planning on paying as I go), and then $56,000 for 28 month med-school program where I won't be able to work at all (taking out a loan but my income will double/triple so I'll pay it off in a year or two easily.

My worry is, we'll be living off only his income for 28 months with kids. Do I take my extra money each month and pay off his debt or put it away for when I'm not able to work during med school to cover my loss of income? Sorry again this is long. Any advice is appreciated. Thanks!

[Jluke]

Hi

Sounds like a lot on your plate in the near future.

Working, Going to school for 6 years AND having kids??

Will there be Daycare?

Debt will be the norm until you graduate.

You may need all the cash savings just to cover routine expenses.

[disneysteve]

I voted that you help, but not for the reason you might be thinking.

You are MARRIED. You are no longer two individuals. You are a COUPLE. You need to be working TOGETHER to live life and work to achieve common goals. Once you said "I do" there was no more "my" money and "his" money or "my" debt and "his" debt. It all became OUR money and OUR debt.

You have paid down $14,000 in 11 months which is great (though we don't know your income so it's hard to put that in any perspective).

You also spent $12,000 on luxuries (the kitchen, carpet, trip to the Caymans, etc.).

You guys need to sit down together and work out a household budget for your current situation and another budget for your anticipated situation once you are back in school.

Without seeing the numbers, it sounds like you need to be stockpiling cash right now to carry you when your income stops. That will also help limit how much new debt you'll need to take on. That doesn't mean you can't continue extra payments on the debt. You just need to work out what constitutes a reasonable amount for debt repayment while still maintaining an adequate savings cushion so that you can cover all of your expenses when you go back to school.

As for having kids, have them when you want to have them. If you wait until you can "afford" them, you'll never do it. If starting a family is important to you, you will adjust in other areas of your budget to make it work (and when I say "you" I mean plural both of you).

[Fishindude77]

You need to combine your finances and both get on the same page about what is important and where the money should be going, or it will lead to problems.

Actually, this sounds like a textbook case for getting on board the Dave Ramsey program.

[snafu]

Welcome to SA. Like Disney Steve, I too believe marriage is a partnership but you will need to maintain careful paperwork if your earlier assets are to be kept separate.

I suggest it is in your best interest to work out a tangible plan 'on paper.' What standard of living are you both willing to accept to fulfil goals? Are you both willing to keep spends super frugal based on student level poverty? What [Net] household income do you anticipate 2018, 2019, 2020, 2021, 2022, 2023? Adding 4% general increase in operating cost, what do you expect in expenses? Based on income increases, will DH be willing and able to increase his SL debt pay down? Is there any potential for overtime or extra earning?

Since you desire to upgrade your credentials, what awards, bursaries, grants, scholarships, RA,TA will you begin pursuing now?

Babies aren't very expensive if you're willing to accept gently used furniture, equipment and basic layette of hand-me-downs. Daycare costs can be modified if you can work opposite schedules or be granted granny time. As a side note, I mention we chose to have our two sons nearly 3 years apart. It was mostly ok until they were in university. The cost multiplied by the pressure of two under a lot of stress on top of general dissatisfaction at that part of our career has potential to mess up long term planning.

[kork13]

As with most of the others, my advice is to work together on your finances. Synergy is a powerful force for good in many aspects of our lives, and finances are no different. You married your husband, for better or worse, yadda yadda... If you try to keep yourself financially isolated, you're basically just living & sleeping with a roommate. Work together, and you will find efficiencies, your income will better provide for your expenses, and you'll find extra working room in your budget.

Priority #1 (after actually combining your financial lives) needs to be tracking your expenses for a few months & building a solid spending plan (a.k.a. monthly and/or annual budget). You NEED a budget in order to properly plan what your income & expenses will be, especially during the 2+ years you'll be going to medical school. By knowing what your expenses are/should be and how much you expect your husband to earn, you can know how much money you need to have in savings to cover any gaps in your finances while you're in school.

How much of your money is accessible in savings or taxable investments vs. retirement & home equity? This is your starting point, and as you prepare for your period of lower income, you want to prioritize getting enough savings to get you through your schooling while avoiding as much debt as possible. With good planning/saving, seeking out every scholarship/grant/tuition assistance program available, you might even be able to do it completely debt free. After you know how much you need to put in savings to get through school and into your new career, sling every dollar available at the debts. The faster you can clear your debts, the lower your monthly expenses will be, and once again, the less likely you'll need to use debt for your schooling.

Another side of the equation is income -- you both should do everything you can to boost your income. Whether that's overtime, side jobs, etc., the more income you earn, the faster you can save what you need, and the faster you can pay off your family's current debts.

So bottom line, I'm telling you to set your priorities as: (1) BUILD A BUDGET! Figure out what you'll need for school. (2) Save enough to get your family through your schooling (3) Pay off any/all debts that your family has.

Have you noticed that I'm not referring to it as "Your husband's debts"? The debts are your FAMILY'S debts. Take ownership of your FAMILY'S entire financial situation, and run with it. You're very obviously smart with your money, so use those smarts to give your family the best possible chance to succeed -- WIN TOGETHER!

[disneysteve]

I just realized that my answer to the poll wasn't quite correct.

My answer is actually that you do BOTH of your options. You need to save for when you're unemployed but you ALSO need to work together on the debt. It isn't an either-or proposition.

[tripods68]

You should visit the Dave Ramsey website and attend FPU. Then re-ask this poll question again.

[Jluke]

You can keep finances separate but you really do need a plan to work together.

I never voted because your poll didn’t provide good choices - couldn’t really choose one or the other - and you left out a lot of details (mainly salaries, expenses and savings rates)

[disneysteve]

I never voted because your poll didn’t provide good choices - couldn’t really choose one or the other

Exactly. I voted before I totally thought it through. The poll options are not mutually exclusive.

[PierceFerdy]

Agreed with DisneySteve / JLuke - at the very least you both need to be working together to tackle this situation, if not combining finances. Take the time to work out the basics like overall income / expenses etc and work out a plan that takes each of your factors into account. I can almost 100% guarantee you'll find a better outcome than you both kinda chipping away at your own issues. You're married now. You're a couple. It's 'us' and 'we' from here on out - it's about time you told your finances this!

[Keshet]

You should visit the Dave Ramsey website and attend FPU. Then re-ask this poll question again.

^^^ this!

[Smallsteps]

So in your post the total debt dropped 16k in 11 months.
You already refinanced it to a lower interest rate. So you already jumped in to help. Taking the next step of adding money to the payments is next.

You never mentioned spouse or your income level but that is a big drop in less then a year.

[hawkeyedre]

Unfortunately, I've been told since I already have a bachelors degree that we I don't qualify for any scholarships or financial assistance, only loans. I have money set aside already as mentioned for the out of pocket max for having kids. We already have a family member who is going to graciously help with daycare. His mom works at a secondhand store and gets first dibs on gently used baby items that come in, so that will help as well.

Someone had mentioned the $12,000 we spent on luxuries. One trip was our honeymoon and I used a very small portion of a large settlement to pay for it, and the trip next month to the Cayman Islands is our one last splurge on ourselves before school and kids since our family vacations will then consist of weekend road trips that are close and cheap. I used half of our tax return. The other half I set aside for the deductible for when we have kids. So neither was out of our normal income, and out of the two large amounts we got, 75%+ of it was saved. Both I planned on my own and got really good deals to make them affordable.

Before I bought my house, I used to save 80% of my income until I was diagnosed with cancer (survivor now). So I am an advocate that you don't die with your money and have to find a happy medium so you can enjoy your life before it's gone, especially since we won't have one for awhile starting next month. The best advice I was ever given after cancer, was to take any large amount of extra money and to save half and reward yourself with the other half. We don't spend our money on a fancy house, clothes, or monetary items. Traveling is our getaway from our hectic lives. We've learned how to travel for cheap.

As for the kitchen, we stained the cabinets and painted on our own, so we only spent $500 on a new countertop. The carpet we absolutely had to get. When he moved in, his cat decided he was going to "mark his territory" all over the house. We tried getting it professionally cleaned but ended up having to replace the carpet.

We already have a budget that is very detailed. I used to be a banker and financial advisor so I don't need to read Dave Ramsey. We don't spend a lot on ourselves. We are both very frugal. We both make $45,000. We do not have the option for overtime. I can't pick up a second job since I will be in school and having to do medical volunteer hours for med school (1,000+ needed). He's going to start giving guitar lessons on the side, but he's been in the learning phase since he didn't know how to read music. He should be starting to give them soon which will definitely help.

He was able to pay off so much within the last 11 months because he had more extra money at the time. He had to take a pay cut at work and his car with 175k miles recently went out on him so he had to get another car. So what was him paying an extra $600 a month towards his debt, is now only a few hundred. I have already paid a few thousand towards his debt and I did pay for the diamond in my wedding band which helped him out as well. BUT I do need to work on not being so selfish with my money. It's hard because I've worked hard to get where I'm at, but I agree that since we're married it's ours now and I need to change my mind set.

I did do a future budget for going to school and living off of one income with kids. If his debt is 100% paid off by then, we will be able to live paycheck to paycheck off of just his income. Meaning the $18,000 I already have set aside to help cover my income, can be used to help payoff his debt and we can together start saving for med school tuition. Sorry this is long again, but I tried to address everything people said in the comments.

[bjl584]

This doesn't have to be complicated. Keep it simple. You are married now. You are a team. No more mine and his. It is now OUR's whether or not you like it or accept it or not.

You knew going into this that the situation was how it is, and you still said "I do." So, now it's time to come together and figure a way to get the debt paid off and be on the same page financially.

I sense the need for some compromise. Maybe sit down and talk to him about it directly and come up with a plan that works for you both. Maybe that means you handle the checkbook and the bills with him at least in the loop and on the sidelines. Maybe it means you postpone the honeymoon. Maybe it means you wait a few years for kids. We here on the internet can only tell you what we would do or what we think. The advice has been good, but you two need to start acting like a team and come together on this. As painful as it might be to let go of the reigns on your finances, you are going to have to. As much as you don't like that he has all that debt, you are going to have to face it head on with a solid plan to pay it off.

Good luck