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'Til Debt do us part

I never really understood how finances work in relationships. In this instance, I’m talking more about marriage. Who pays what? Do both pay cheques go into a joint account? I’ve always done my finances my own way. My mom does my tax returns because she’s in the accounting game, but once I’m done school, that will all change. I’ve grown very accustomed to a strict budgeting schedule where I know how much money I have to spend on treats and toys, how much goes into savings, and what portion goes to bills, etc. What do married people do? Does all the money go into a joint account and then get filtered out accordingly? Are all spending decisions discussed before they can occur? I don’t know about everyone else, but that sort of life style would not go over well with me.

When I was younger, the minute I earned a few dollars, my mom would tell me I had to put it in the bank when all I wanted to do was buy toys and candy. I hated how the money I earned couldn’t be spent the way I wanted to spend it. I guess it was a learning experience, because back then I didn’t know the meaning of budgeting (I mean, I didn’t have any bills!). So now when I get threw high school with summer jobs, university with summer jobs and work study, grad school with GTA’s, GRA’s, GSA’s and part time jobs, then finally end up in the dream job I earned through 10 years of hard work, do I have to go back to having to get permission to spend the money I earned?

This is probably something people don’t think about when getting into a long term relationship. There will come a time when financial decisions need to be made and those adult decisions your parents made now fall into your lap. How many people think about what it takes to actually purchase a home? So many little steps are overlooked. Insurance, property taxes, closing fees, etc.. I think before I buy a home, I’ll have to do a course on Home Purchasing.

Nevertheless, on to why I really wanted to ask. When you get into a relationship, you 2 get married and your significant other has a lot of debt, does their debt suddenly become ‘our’ debt? Are you obligated to ‘help’ pay their debt off? When the bank accounts become joint bank accounts, are the debts ‘joint’ as well? I personally think that they should not be joint debts (I don’t even like the idea of joint bank accounts). If you accumulate your debt on your own time, it would be unfair to rely on someone else to pay them off for you. I asked my mom what she thought of the idea and she completely agreed with me. It sounds mean, but at the end of the day, the person should have the right to choose whether to bail someone out of debt or not, not be strong-armed and guilt tripped into it.

Does that make me a cruel person? I just do not think it is fair to work so hard to get to a stage in your life where you are financially stable, and then have to give it all away just because you get married. Do not get me wrong, if I had Bill Gates money, $100,000 is nothing to give away. However, not everyone is as fortunate is Bill Gates.

Comments

Good post. I have thought and talked about this issue before. Where I stand is somewhat in the middle. I do not believe in total financial independence from your partner. Nor am I big fan of everything joined. I think a household account makes much sense and to be even more realistic about it I think talking to a financial planner at a bank for ideas is the best route.

That said when you marry someone and they have debt I believe that debt is now yours. In a relationship one partner helps the other partner and to not do so will create problems and rifts in the relationship. Maybe it's not fare when on partner has no debt and the other one does but partnerships are not about fare all the time. In the long run what is one partners is the others right? So why should short term things like debt be any different?

I agree with you aswell. When the dicussion first came to me, I was under the impression that both pay cheques go into 1 joint account, and the everything is done together from that point forward. I never thought of the whole financial thing until very recently.

As Az mentioned, 'what if the debt was from med school'. I honestly think that people the incur that kind of debt for educational purposed do so knowing they will be able to pay it off in the future. But what if it is 100k of debt from gambling? Or 100k of debt from drug and alcohol abuse? I've seen it happen to several people (yes I know I'm young, but I've worked with many people that have gone through this kind of thing) and I wonder how they cope with this situation.

Quite often, debt won't be short term. People who have no idea how to manage money will continue to stay in debt for the rest of their life.

When you get married splitting finances/debt should be the last thing on your mind. You are about to start a future together, a family. If you are getting married, you do not plan to divorce that person. I mean shit happens, but you don't plan to at the time. Means you want to spend the rest of your life with them. So helping your significant other repay their debt faster is only beneficial to you. The faster you two pay it off, the less interest you'll have to pay, the more money you'll have to spend later. another point is why your significant other has that much debt? Because they are getting good education. For example a med. school grad at the time of graduation can have debt that will exceed $100K. So if you wnt them to take care of their own debt, it will only be fair that once they pay it off they will not share their earnings with you. And their earnings will be pretty high. I guess my point is when you are marrying, these problems should not be bothering you. Marriage is not about your current debts. Families overcome things together.

I completely agree. Debt was the last thing on my mind until the question was came across my desk. I thought about it long and hard and thats why I made a blog post about it. What is the 100k wasn't due to education? Who says I wanted anyone to share their income with me? I was only saying that I didn't think it was right that you were 'expected' to pay off someone elses debt. I would probably have my own debt when I get out of school. I would feel guilty expecting others to pay my debt for me. Family or not, this is something that needs to be discussed in any relationship and man people don't think about it until they're at the point of no return. Ever wonder why pan handlers continue to pan handle? They don't stop until it becomes unprofitable. They will continue to ask for money until people stop giving it to them.