Financial Differences

[cloudstrife]

Hi all,

 

This is my first time posting on the site.

 

My fiancee and I come from very different places financially. At the time we started seriously talking about getting married I found out that she had $30,000 in debt (combined credit card, car loan, and student loan) and no savings. I have a house that I built partly with my own labor using $120k in cash and a $50k h/e loan, so i have a lot of equity in it. The savings were the result of a lot of hard work and intelligent decisions on my part, and the two of us earn roughly the same amount of money.

 

When we started talking about the wedding we immediately ran into differences over the budget. My feelings are that, since we've been talking pretty seriously about having a family in just a year or so after we get married, the smartest thing to do would be to have a very cheap wedding, have a nice honeymoon, and put the money we would have spent on a wedding directly toward her debt (which she's now reduced to $20k) or a savings account. Her feelings are that the wedding budget should be in the area of $15k, which would come from roughly equal contributions by her, myself, and both sets of parents. This amount excludes the honeymoon and ring (she also made it very clear that she had a certain "standard" for what kind of ring she expected).

 

I find all of this a bit excessive given that the expectation is to start a family soon and given her financial position. I'm also looking for proof that she's changed her ways, or can change her ways, and not seeing it in these wedding expectations. Recently I brought up the idea of putting off starting a family for a year or two given the expense and her financial situation, and she said that was unacceptable.

 

Additionally, we had a major fight about these issues (and others) fairly recently, and the first thing she did was book a cruise with her mother. The future of the relationship was definitely in question at that point, but I still don't like that it was the first thing she did, when the idea was that, right now, she should be saving hard to pay off debt and save up for the wedding (plus I'd like to see her have some emergency cash).

 

I love her very much but I feel a little taken advantage of here. If we were both -$20k in the hole it would be very hard to start a family. I've pointed that out to her and she basically said "well, we aren't". The prenup was brought up once as well, and she was initially OK with it and then later refused.

 

In fairness, she did sell her house (interest-only ARM, basically no equity, could barely make the payments) to move back to her parents and start cleaning up her finances, and she has been. I still just have a problem with shelling out all the money, with feeling taken advantage of considering our differences and her wedding needs and family expectations, and I don't really feel too reassured about her future spending habits given how quickly she booked the trip with her mother. She maintains that she doesn't regret her lifestyle because she had lots of fun and "life experiences." Basically, I'm the one who needs to "loosen up" a little.

 

How unreasonable is it of me to want to save money on the wedding?

[laRubiaBonita]

how old are you two? how long have you been dating?

 

are her parents willing to pay any towards her "wedding needs"?

 

she sounds a bit selfish and spoiled to me.

[Craig]

So, um, why are you considering getting married? You aren't allowed to use the word 'love' in your response.

 

I see red flags. She's trying to manipulate you into spending your savings kiddo and get deeper and deeper into debt. Oh yeah, impulse control could be an issue too.

 

Interest only ARMS or any interest only loan is just an expensive version of renting with an option to buy.

 

I think your plans are realistic and her ideas are not plans.

[magda]

You're right to feel the way you do. Money and spending habits are such a huge huge huge huge stressor in marriage. Were I you I'd call off the wedding indefinetely.

[bluechocolate]

Yep, call off the wedding.

 

And sorry, but her moving back in with ma & pa to reduce her debts just doesn't strike me as that responsible. Easy, maybe. My guess is ma & pa aren't charging her any rent. Am I right?

 

She wants to have a baby within a year (& most likely quit working), so how is that 20K gonna get paid off? Can she do that in one year?

 

Money and spending habits are such a huge huge huge huge stressor in marriage.

And you aren't even married yet!

 

If you decide to go ahead with this, at the very least, insist on a pre-nup.

[cloudstrife]

We're both right around 30, and have been together for about 1 1/2 years. The current thinking is that her parents would pitch in about a quarter of the cost.

 

She's a really caring and sweet person, and I don't think she sees herself as selfish. She just doesn't care about money. However, she does care about having a wedding, having children, etc. So, I think the selfishness is somewhat unintentional because she's not matching up her wants/needs with money, and doesn't see how "not caring about money" is hypocritical in that case. If that makes any sense.

[cloudstrife]

No, she's not paying any rent w/her parents. It was my idea to get her to move there, to pay down the debt. She thinks she made a big sacrifice in selling her house.

[bluechocolate]

She's a really caring and sweet person, and I don't think she sees herself as selfish. She just doesn't care about money. However, she does care about having a wedding, having children, etc. So, I think the selfishness is somewhat unintentional because she's not matching up her wants/needs with money, and doesn't see how "not caring about money" is hypocritical in that case. If that makes any sense.

 

hmmm.... the only sense it makes to me is that you are rationalising on her behalf & trying to justify her behaviour, which to some extent is understandable, but also, I'm sorry to say, foolish. Is she an idiot? Is she so stupid that she doesn't understand the concepts of debt & cost of living & the cost of raising a child?

 

What did she have to say when you asked her about the money for this cruise with her mother? What does that action alone tell you? You have an argument, essentially about money, & what does she do? Book a cruise with mother! Don't her parents think she should be paying off her debts, or is ma paying for the cruise?

 

If you are wealthy enough to sustain this & don't really care about it then by all means, get married & start a family. But I don't think you'd have posted here if you were in that position.

 

(she also made it very clear that she had a certain "standard" for what kind of ring she expected).

 

I think this woman has different priorities than you.

[laRubiaBonita]

tell her you have made plans to elope..... see how she reacts then!

[cloudstrife]

She's pretty smart overall, she just has a big blind spot when it comes to money. Believe me, I know what I think about the cruise. And yes, I do feel I've possibly been/am being foolish. But love is a form of foolishness and I try to understand other people and meet them in the middle, if possible. I can be too stubborn so maybe I'm overcompensating and not being stubborn enough in this case, I don't know.

 

Honestly, she thinks she's perfectly normal and I have an obsession about money. Debt is so prevalent that she's right to an extent, but that doesn't make it OK to me.

 

Her parents think I'm too hard on her about her debt, basically also that it's a perfectly normal amount of debt and that I should be more agreeable. But, on the other hand, her dad thought buying a house and selling it later on was a good way to deal with the credit card debt, so I'm not sure they're a good source of advice.

 

Thanks for the input everyone, by the way.

[bab]

Okay, I'm going to go in a different direction than everyone else. I think we need more information here. She's $20K in debt you say. But, you don't say how much is where. If it's mostly credit card debt, then revert back to previous advice. But on the other hand, student loans and a car add up to $20K pretty darn quickly. Is she defaulting on any of her payments? Is she living paycheck to paycheck?

 

I'm 27 and I don't know anybody who had $120K in cash to build a house with. If I had $120K in cash, then yeah, still having student loan debt would be silly, but that's not the norm. I think that you are extremely good with money and extremely conservative. Your fiance is not as conservative as you are, but she's not that bad if she was able to pay down $10K in a year.

 

That said, it doesn't really matter because the big red flags here aren't that "you're fiance likes to spend money" they are that the two of you have vastly different ideas about what responsible handling of money entails. The two of you are going to have to work it out before you get married. If you can't work it out, then maybe holding off the marriage is the best plan. Divorce ain't cheap. But if the two of you can come to a compromise, great. It does sound like neither of you are willing to compromise.

[Craig]

She's a really caring and sweet person

My dog is a caring and sweet 'person' but I wouldn't marry her.

 

Why are you considering marrying this woman? Remember, you can't use the word love in your response.

[justagirliegirl]

I hate to say this but I can see into the future here.

 

10 years from now she leaves you and she takes the kids and you are out in the street living in a cardboard box and she is in your house planning a cruise with her new squeeze and you are paying through the nose with massive child support payments.

 

Have you thought about a prenup to protects your a$$ ets?

[tikigods]

I think that she is using you for your money and that you should call off the wedding till she is 100% debt free (save for maybe a car) she wants to start having babies, doesn't care about money, and frankly already has told you that she excepts certain things money wise from you. It isn't that she has a blind spot, I think she knows that she has a cash cow and right now it sounds like you are willing to be that for her

[Guest]

Hi -

I have been here reading for a while and never thought I would get the nerve to post. But after reading your post, I felt responsible for drafting a reply.

 

1) My situation is much like yourself, only the reverse, I am a woman who was responsible and as a result, had assets. My exh was irresponsible with Money (he spent every cent of it) because money is bad and makes you greedy and selfish... yada yada yada...

 

2) We had planned on having children and due to the stress of the finances (Me always supporting and him always spending), this never materialized.

 

3) It got to the point where this issue (which BECAME the basis of MANY issues) was doing harm to my health. So I filed for divorce.

 

4) Well guess what? Now all of the sudden, he wants half of my assets just by the virtue that we were married and he happened to be here "standing next to me". So this evil money now all of the sudden is the all important and he has to have it.

 

5) We even signed a prenup BUT he is disputing it and now I have spend $20K on lawyer fees and we are still not done. My advice is to get a GOOD lawyer to draw up a fair and tight prenup. Take some time to do research on all the best elements of a good prenup. This prenup should be fair to HER and to you. Listen to her concerns so that she recognizes her role as a responsible party in the drafting of the agreement. Have her lawyer OK it. And you are off!

 

6) Many people are opposed to prenups because they feel that it diminishes the marriage. BUT I disagree. If feel that a prenup enhances a marriage because it makes both parties more responsible for their own actions. You see, without a prenup, when things go sour, everybody grabs for what they can get. And most feel that they have to stay in the marriage because it will "cost" them too much to get out of it. Do you want to be in that boat?

Marriage should be about happiness, and I would want somebody to stay with me because they want to, not because they have to, due to some co-dependency issues.

 

PLEASE listen to my advice. It will save you so much hell later on. I promise.

Think of how much money you will be saving for your future children by taking this little step.

And just in case you do live happily after...what harm would the prenup have done?

 

Good Luck!

[cloudstrife]

Thanks for the warning. That's pretty much my nightmare scenario. I will have to follow your advice, as well as the advice of others on this forum, and insist on a prenup.

 

Craig, I know what you're saying too. It's just hard to be that cold about it.

[Craig]

Craig, I know what you're saying too. It's just hard to be that cold about it.

Cloudstrife I don't intend to be cold but to briefly change your state of thinking. Right now you are probably in love and many people get married thinking that love is all they need to maintain/sustain a mutually satisfying long term relationship. I agree that love is important but it can not survive without enough compatibility and understanding between the two people in the relationship.

 

I want you to have a look at your relationship and ask yourself the hard questions now instead of being presented with the answers later. To do so is to be serious about the long term relationship.

[norajane]

You've been dating only 1 1/2 years and you're so certain that you want to spend the rest of your life with someone who won't compromise even an inch on money matters...money, which is one of the leading causes of divorce?

 

You're 30 and you sound like you have a lot of common sense. Use it before committing yourself to a lifetime of issues that will stem from your vastly differing views on money.

 

Have you discussed - or considered - What will happen when you have a child? Will she stop working? Will you get a nanny? Day care? Will she want more children? Will they all need to wear the best clothes and have the most expensive cribs and strollers and playthings? Will she want them to go to the best private schools and colleges? Will she want a bigger house? A shiny new SUV to drive them around? Dance lessons and swimming lessons and piano lessons? Where do you see yourselves in ten years? In a bigger house? Family vacations to Hawaii?

 

The thing about debts is they continue to keep piling up if one partner isn't at all concerned about creating debts or living in debt. Is that how you want to live your life?

 

Because she's not going to change. Don't go into this marriage thinking she will change her views about handling money after marriage.

 

You've only been together year and a half. Why are you rushing into this?

[Guest]

Perhaps I can shed some light from the perspective of your potentially future wife. I'm the spender, and my fiance is the saver of our relationship. There is usually one of each in a partnership. If it wasnt' for me he'd be wearing the same clothes since high school and look like a bum. If it wasn't for him I'd be in credit card debt up to ny ears. Luckily I have none.

 

However, I'm a university graduate with a lot of student loan debt ($35'000). My fiance has no debt except for our new car (his parents paid for his degree, I was not so lucky, my parents saved $0 for my education). I make twice what my fiance does, but I have $600 in savings, piddly compared to the $17'000 he has stashed away. Having a student loan greatly inhibits your ability to save! We could not buy a car until this year (I am 3 years into paying off my loan now and 25 years old). The vast majority of people my age had a car way before 25. What I am saying is that when you have a lot of debt to pay off, coming up with 120K is not something you can easily do.

 

On the other hand, booking cruises spur of the moment is not something you should do either. Whatever she is spending on this cruise should be going to minimizing her debt. Keep in mind, however, that if you want to start off your life with some sort of normalcy (i.e not eating kraft dinner for a year), student loans are about debt managment, rather than debt elimination. It sounds like your fiance needs to learn peoper debt management skills.

 

Something you should consider: almost every little girl dreams of a fantasy wedding and this fantasy does not die as she grows into adulthood. You need to watch 'rich bride, poor bride on TLC to get an idea of what weddings cost. Her desire to have an expensive wedding may not have anything to do with being irresponsble. She's human. The average Canadian wedding, for example, costs $18'000. We have wittled our wedding budget down to $8000, and most of that is because we cut our guest list to only 50 people! We are having a no frills wedding with the exception of the venue. I had to sacrifice a lot from my childhood dream to reach that budget goal. Weddings are expensive, bottom line. A nice wedding for, say $500, is not going to happen if you want to feed your guests at all.

 

My suggestion is that you stay with this woman that you obviosuly love, and insist that she take debt managment courses. Sometimes it needs to be taught, some people don't have the money saving skill. I've only begun to learn how to do it properly with the hlep of my fiance and being forced to budget for this wedding. I'm successfully paying off my student loans however, and have a top credit rating (had it checked before we bought the car). Us spenders can be tamed! Weddings are a perfect place to learn how to budget properly and to learn the difference between 'wants' and 'needs'.

[Gunny376]

72 % of all arguments in marriage are about money and finances

 

80% of all Americans are one pay check from having a refrigerator crisis. (No food in the house)

 

I would recommend that you Goggle Dave Ramesy and "Complete Money Makeover" and Mary Hunt's "Debt Proof Living" (Mary's website is a paid website ~ $2 a month the cost of a Sunday Newspaper)

 

Mary published an excellent book titiled "Debt Proof Your Marriage" and I'd highly recommend it. (She's also published other books)

 

Mary was just your typical average American Housewife, you acquired over the course of her marriage ~ $100,000 in credit card debt + car leases + a mortgage (in California). She started the newsletter as a means of raising money ~ then books ~ then lectures. She paid off the debt without filing bankruptcy. She recomends having a Contingencey Fund equivalent to one year's of income (it takes most years to acquire) and funding what she call's Freedom Accounts. (Saving for anticipated expenses such as auto registration, property taxes, house repiars, furniture and appliance replactment ~ etc.

 

Dave Ramsey was multi-millionaire having earned his fortune in California Real Estate. He went from driving a Jaguar living in a million dollar estate to he and his family all but becoming homeless and driving a twelve year old Cadilliac a friend had given him. He speaks pretty much as Mary does, but Mary gets into the nittty gritty of squeezing every little penny, (recipies, money making ideas, substitutes, ideas for day to day living and getting by and making do ~ she also has a fournm and there are some real horror stories there.

 

Having been married, gone through a divorce, gone through bankruptcy, going back to college (Business Admin ~ Finance) I wouldn't even think about getting married until I had any and all "stupid debt" (as Mary calls it aka student loans, car (f)leases, dept store and credit cards) paid off, at least three to six months equivalent of income, (preferablly one year ~ eventually) and money put back for the more frequent re-occuring expenses.

 

As Dave said, you've got to put some back for a rainy day ~ and its not question of if its going to rain, but when?

[cutegirl]

I have a similar prob with my bf. He's 26 and never lived on his home, he was living at home till he met me. He barely pays rent and we live together, but he doesn't know how to budget his money, he spends it ALL on food and eating out, and he is particular about what he eates too, it can ONLY be seafood and the expensive kind.

 

His excuse is that I make way more than him so therefore I should pay more rent, but it's coming to the point where he hasn't paid for 11 months or so. His exuse is always that I make more than enough and the rent is a small percentage of my income.

 

I still feel taken advantage off though. I have a lot of savings in the bank, and my bf has only a few hundred right now at most! Many times he goes NEGATIVE in the bank and I have to transfer money to his account ASAP so he doesn't receive any more penalties. And on top of that he also withdrawals large amounts of cash from my personal account without asking. Last time he withdrew a total of $1,300 in 2 weeks! And he says it's no big deal, its only money when he has none! And when I get mad he'll say "Is that all I'm worth to you? Just a few thousand dollars?"

 

I could never marry him or have kids with him, but for now I still choose to stay with him because I'm used to him and attached and I do care about him.

 

He just has the mentality of a 12 year old and NO financial skills or life skills in terms of saving money or budgeting. If I were to marry him I know I would have to support him till he dies, and he has no concept of retirement plan, etc so he would be mooching off of mine.

 

It's just not good, but I'm just attached right now so there's nothing I can do really.

 

He doesn't know what it's like to have to pay rent and support himself. I kind of feel like he's my child.