I recently visited some family of mine out West, and one of my younger cousins is engaged to be married. She is 29, only debt she has is her student loans (undergrad and masters = $90,000). She has been driving the same Honda Civic since my Aunt helped her buy it for her 20th birthday. Her soon to be husband is the complete opposite of her financially. He makes considerably more money (He is in the real estate industry), but according to her carries over $30-40K in credit card debt, has a $40K car note, and wants to buy a brand new house when they marry.
My cousin is scared to death of debt, and her talks about living more frugal have gone nowhere, partly she believes because he makes the lionshare of the money.
Obviously I care about my family member, but want to know what would you tell someone you care about in this situation? How should she handle this?
Depending on the state that they will live in, she won't be responsible for any of his debt, unless she signs on anything as a joint account. If, however, they live in any of the community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin) - all debts incurred by one spouse become the debts of the other.
She should be very, very careful....Different "philosophies" on the handling of money - can easily and rapidly destroy any marriage, or any hope of peace within the marriage. Those joined in marriage should have like life goals, one of the more important being - money. Good luck to her that she will make the right decision for her!
They live in Arizona FWIW
I don't know about the debts going into the marriage (I don't think that they could be included.) - but all debts going forward - become the debts of both of them.
Different "philosophies" on the handling of money - can easily and rapidly destroy any marriage.
Those joined in marriage should have like life goals, one of the more important being - money.
I echoed having similar goals re: money. Unfortunately love is winning over logic.
I would tell her:
1. The ideal move for her would be for her to demand that his credit card debt be paid off before they get married. Since that realistically won't happen, than move on to #2.
2. If he won't change his ways, keep your money in separate accounts. No co-mingling except for maybe a small account to pay the rent/bills/groceries/etc. Because when the collectors come collecting, they will drain all of her accounts that also have his name on them as well. His credit cards stay his, and her's stay her's. No AU's.
3. They should BOTH get a on a plan to pay off student loans & credit card debt BEFORE buying a house.
4. Even though he makes considerably more money, when the time comes should they buy a house, their payments should be something that they can afford down the middle 50/50. If the house is so expensive that he contributes 80% and her 20%, that's when the arguments and power struggles come into play. If he refuses, than the house & mortgage can be completely in his name.
5. She needs to keep the financial and emotional investment 50/50 so she can hold her head up high and walk out if necessary.
Thanks everyone for the input.
OmarR - She has a plan to pay off her student loan debt, and if she stays on track, will be debt free by January 2020. She said when he asked him about his CC spending, he talked about how he knows what he is doing, and he moves the balances around on CC BT offers he gets. She sees that as not ever addressing the root of the debt issue, which is overspending.
Venture: $18K | Amex ED: $18K | Amex BCE: $15K | NFCU CR: $15K | IT #1: $14.5K | Wells Fargo: $11K | Savor: 10K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $6.8K | MLife: $6.5K | Sportsman's Guide: $5.9K | NRA: $5.5K | Elan Plat: $2.3K | Cap1 PS: 2K | TRV: $2.5K | Cabela's: $1K
Current FICO 8 Scores: EQ: 728 | TU: 736 | EX: 726