Last month Mr. M and I finally took the plunge and combined our finances. Up until that point our financial relationship would be best described as - roommates. We would split the bills and expenses with Mr. M cutting me a check out of his pay to cover his share. Obviously this was not the most romantic arrangement. But you might be surprised to know why I decided we had to join our money, it wasn’t for any beautiful ideals. Mr. M was in too much debt.
It wasn’t a surprise, while our financials weren’t combined they weren’t a secret either. His balance has waxed and waned over the years with the whims of a Hollywood career. For years we discussed how we would manage our money together but it never moved beyond talk. In the back of my mind was the caveat, only once he pays off that debt. Eventually the one thing that kept us apart drove us together. I knew he couldn’t pay it off without help, the balance was too big.
I know all about debt and have dug out from under it before. Mr. M’s $8400 is a fraction of the load I carried. But I don’t relish the fight. I don’t feel the same motivation to pay it off, the same shame and guilt that drove me on. We’ll get it paid off, but it’s not the only focus right now. There are the personal savings goals I set for the year, a house to fix up and hopefully a wedding to plan. I am having a hard time figuring out how to balance so many competing goals.
I also don’t know how to handle this new debt in my/our net worth. I really don’t want to include it - it’s been so hard to claw forward. I’m feeling rather discouraged and subtracting that much from the net worth overnight is too much to bear. I don’t include the $10,000 savings I have in the house fund in the total, is it OK to ignore the debt as well?
Money and relationships are always tricky. We have the added challenge of being opposites - spender versus saver, carefree versus careful planner. The time we spent discussing how we would manage our money together has paid off, there haven’t been any disagreements. But this arrangement is still a work in progress.
It feels like my finances have come full circle. The debt monster that I defeated has come back into my life without me spending a dime. Some cycles shouldn’t be repeated.
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8 comments:
Mr. M is so fortunate to have you in his life! $8,400 is not an insurmountable amount but debt is debt. I wouldn't include his debt into your net worth calculation if it's going to discourage you. Rather, I'd keep a separate accounting/chart for that debt alone. That should give the two of you additional motivation to pay it off. :-D
Hey, BTW, thanks for the heads up about the Pet Expo. Unfortunately this weekend I'm helping my friend's mom out. She hasn't been able to drive after she broker her right ankle so I'll be playing chauffeur. Enjoy the expo and be sure to put some pics up!!
Thanks for sharing your personal story with us.
I know it seems like an uphill battle, but I really think it'll be worth it down the road. Get on the same page and help him work through one of his weaknesses, just as he would help you work through yours in another area.
I really urge you to include everything in your net worth! I'd suggest putting in the 10k in savings as well as all the debt. This is the only way to get a true picture, without shaping it to feel more "comfortable".
Best of luck, I really enjoy reading your personal posts about your journey! Keep it up!
As I have recently joined the fraternity of engaged men, I am quite fearful of these types of situations. My fiance and I are two different people when it comes to philosophies of money management. We are opposite sides of the spectrum: I have 100k in student loans, she has zero. I come from a large family and she is an only child. This is going to get interesting quickly, while I am intimidated, I do understand the importance of working these things out. All about communication!!!!!
I have a secret. Rambo won't marry me until my debts are significantly paid off. We do plan on having a life together and growing old, but Rambo paid off 10,000 in credit card debt in a year and absoultly refuses to marry me and take on my debt ( which is totally understandable) He has told me time and time again my student loans and car are okay, just not everything else. I completely understand and this post made me realize even more how he might feel when you said " it's like I'm getting into debt all over again and I didn't spend a dime" I'm sure thats how Rambo thinks of it. I'm not mad or resentful towards him since I'm in no hurry to get married but this post opened my eyes in a more grown up way all over again.
You should include his debt in your joint net worth statement, just as you should include your house fund and any other assets. The fact is if you are married there's no point in even keeping separate net worth statements; everything you own is joint, everything you owe is joint, everything you make is joint, and everything you spend is joint.
I don't know much about your situation, but I assume that you are both benefitting from each other's income and both your lifestyles have probably risen since you married/moved in together because of the joint income and fewer expenses (one rent, not two, etc).
If you've combined income and expenses, it shouldn't bother you to combine assets and liabilities. Once the debt is gone his income can help build joint savings - or go towards shared luxuries.
@Kat - yeah I could have it paid off pretty quickly if I felt motivated. I'm looking at the goals I set last December and deciding which to dump in order to pay this off.
@Baker - I don't like to include that savings because I do plan to spend it in the next few years. It won't be there in the future so I don't count it in the present. Make sense? I haven't decided what to do.
@Doctor - I think opposites can work as long as you both recognize the challenges. The key is to find common goals that you can work towards together.
Serendipity - I hope you can get that debt paid off soon. In my case I realized that Mr M needed my help. Together our money can accomplish more.
@Meg - I am leaning towards including the debt. Since I'll have to devote resources to paying it off, I should represent the change in my net worth. Right now everything except a small portion goes to bills and savings, he gets a little spending money to do with as he pleases. Thanks for the advice.
Relationships and money are really hard, but it sounds like you are moving in the right direction. As long as you guys keep talking about it, that will help a lot.
I've considered leaving out short term savings as well, but since I DID include debt that wasn't mine but that I was taking responsibility for, it made sense to include everything. I still feel iffy about including either set, but it makes for a more complete picture for my tracking purposes. Messier, yes, but still manageable.
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