The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: anonperson on February 21, 2019, 02:15:56 PM
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Long time lurker, first time poster. I need advice relate to finances in a second marriage. My older husband of three years has 3 kids from his first marriage (oldest is at a very expensive college, middle has committed to a very expensive college, and youngest is still in high school and lives with his mom in another state) and we have one baby together. His ex-wife is bitter, lawyered up and never wastes a second to go back to court for more money if she can. She has plenty of money and a good job. Between child support, shared child expenses (no expense is spared on their kids) and college tuition (he’s obligated to pay half by his divorce decree, wherever they choose to go), at least 55% of his after-tax income goes to the ex-wife and their 3 children, and we’re still looking at many more years of expensive colleges plus whatever support he decides to provide them when they are adults (and on this issue I don’t feel like I have a voice since they’re not my kids and he takes offense and shuts down whenever I express discontent). He also pays 5% of his after-tax income to support an elderly parent. He is a partner in his business (so he should be making quarterly tax payments), makes 3x my income, and has about 5x my net worth in “premarital assets”, but those assets are illiquid. No prenup. Through his work he could have one or a series of sizeable equity events at any time in the future, or never. But he’s in a lot of debt, and because he insists on filing taxes jointly and I acquiesced, we both currently owe more in taxes than my annual income. The reasons he has accumulated so much debt are: (1) divorce obligations that he didn’t fully disclose before we were married (and admittedly, I didn’t push him to disclose); (2) overspending in the years between his divorce and when we met and were married by borrowing against his brokerage account believing it would never go down but it did in a big way, which he regrets this terribly; and (3) overspending to buy a house at the very beginning of our marriage, back when I thought he just had deep pockets and didn’t ask enough questions. I learned about all of this after we were married.
I am a very disciplined financially and I’ve never had any debt prior to this marriage. I continue to max out my 401k like I have since I took my first job, and I secretly save money in my child’s 529 plan through direct pay at my work, because I know he would not be supportive of saving for her while he’s simultaneously putting his older kids through college and dealing with all this debt. I dislike my current job, but I continue so that I can save aggressively for retirement and fund my daughter’s college account, and now I am also over withholding 2019 taxes to help the situation (we bank together, so this is just my way of asserting some control over the situation). My plan was always to make my money first in a job that I don’t love, then pursue a career doing something more fulfilling later. And on this point, if I were still single and living as modestly as I always had, I’d be FIRE’d by now.
It would be very hard to deal with this debt if we were to divorce or he dies (after all, ‘his’ assets are all premarital assets; the only thing we have to show for our marriage is debt and a home we own together, which is frankly way more house and more mortgage than I need or want). My anxiety about all the debt is very high, and it affects my health, my ability to perform my job, and has caused me to feel resentment toward his kids (I understand this is not their fault, but the feelings are still there).
We have a positive net worth, both individually and collectively. I believe if there were no stepchildren involved our marriage would be great, but that’s counterfactual. I do not want my daughter to grow up in a broken home, or to expose her to a series of other women or a stepmother.
It’s easy to pass judgment say I should’ve known better and I did this to myself, and I agree, but I didn’t appreciate the magnitude of the situation and how it would affect me financially and emotionally, and now I’m looking for advise on how to move forward. Here is what I’ve done and am doing: (1) I see a therapist off and on for the anxiety; (2) I’ve asked to file taxes separately each of the last 3 years but he’s opposed since it will increase our overall obligation as a couple; (3) I’ve threatened to leave the marriage; (4) we’ve been to counseling, but he discontinued counseling because he says I only want to complain that he needs to pay taxes and his other debt and he already knows that; and (5) I now make large payments to the IRS each month as soon as his paycheck hits our joint account, but at the current rate it’s going to be years before we pay it off, and it may cause him to default on his other debt, and I know he resents me for it and feels emasculated. For all I know, he’s so unhappy with the situation and how I’ve reacted that he’s planning to leave me. So, any advice?
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Look into filing as injured spouse (I think that is what it is called). You can file together and claim injured spouse. I did that with my ex husband because of his back child support crap. I don't know how you feel but my situation wasn't as bad as yours and I chose to divorce. I am now taking care of our child all on my own, which is much better financially and emotionally. It is very difficult to respect your spouse when he has that attitude of he does what he wants and you should just accept it. It really sounds to me like you would be better off without him.
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This sounds like such a hard situation. I'm commenting not because I have any advice, but just to express my compassion towards you.
I have several good friends in blended family situations (2nd marriages) and parenting tends to be the biggest source of stress in these relationships. Especially when some children are biologically shared in the new couple vs children coming in from the previous relationship(s). Even when spouses are relatively on the same page, its super difficult as parenting styles may be different between the older children/previous relationship vs. what kind of parental expectations/family rules/money/ values are expected in the "new" family. All that to say, even when its working well, its a challenge. Your situation involves debt, a super expensive life phase (college x 3) and some communication issues - so its even harder. I'm so sorry. I'm hoping you get some helpful feedback.
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My first thought was maybe you should have a divorce on paper but carry on living together in a permanent relationship with separate finances.
OK, ignoring that idea.
Please separate out in your mind the issues of tax filing (which is about assessing how much tax you as a family pay) and tax payments. They are two separate things. There is absolutely no point in filing taxes separately just because you are having issues over the tax payments - filing separately won't affect the tax debts already accumulated and will just make future payments higher. So please stop asking for separate filing of taxes. If you could possibly say to you husband that he was right about this, and that your worries over the tax debt had wrongly led you to think that filing singly would be the solution that might be very helpful.
Now, tax payments. There are two separate issues here: the pre-existing debt and the current withholding. As to the pre-existing debt, do you have an agreed payment schedule with the Revenue? If so, please stick to this. Don't overpay, don't pay more than a day in advance of the due date. If you have an agreed payment schedule you have an agreed end date: think of this as the equivalent of a mortgage, set it and forget it.
As to current withholding, you say that you are overwithholding your 2019 taxes "to help the situation". I don't understand how this helps the situation? Surely if you have unallocated income it should go an emergency fund, investments or debt repayment, rather that putting it aside to cover future obligations that don't in fact exist? It could be helpful if you could rethink this, and just put enough aside to cover expected taxes for 2019.
Now, non-tax debt. This has three sources: divorce obligations, pre-marital consumer spending, and mortgage debt. You seem to be characterising this debt as your husband's, but in reality it is your family debt, and the "worse" part of "for better or worse". One thing that particularly concerns me is that because you don't seem to see this debt as a family debt you are potentially overpaying on the tax debt (which you do accept as partially yours) to the point at which these other debts may go unpaid. There is nothing "financially disciplined" about overpaying on one debt while not paying others, and that way bankruptcy lies.
One thing you might consider is whether you have been in your current home long enough to recoup your costs if you sell and move somewhere more modest in size and expense.
I'm seeing a lot of positives in your situation: good family income levels, substantial family assets, positive net worth, ability to save for retirement and college and support an elderly parent as well as paying off debt. I wonder whether creating a comprehensive summary of your family's financial position, along the lines of a case study, possibly with a spreadsheet showing projected debt payoff and asset accumulation, would help you to see the whole picture as being more positive. I can see that having gone from a "no debt, ever" mindset to finding that there is substantial debt in your marriage has been difficult to adjust to. But "no debt" and "financially disciplined" are not necessarily the same things: it might be helpful if you can work through for yourself where these are and are not the same.
Talking to your husband about all this will be key. Although it is in a different context, there is a lot of good advice in this thread about how to talk to a spouse or partner about money matters -
https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/
Good luck.
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When he divorced, how did he agree to pay half of tuition for his children no matter where they go to school? I mean how is it even possible? He is supposed to pay child support until they turn 18 which is fair enough, but half of tuition?
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Regarding college expenses, he agreed to pay half of tuition in the divorce decree with no qualification on where they went. His wife, in an action to further increase child support, also asked the judge to make him pay pro rata instead of half, but the judge said no. He thought half was a good deal at the time, since half would be less than pro rata (although with child support factored in this year, it's probably equal to and possibly more than pro rata). Plus even if that weren't in the divorce decree, he's not willing to tell his kids they can't go to a certain school or they have to take out loans because they are too expensive (note that both of the oldest two qualified for a full ride at a really good public state school, but instead chose to go private and the parents have to pay full freight). Also, in his state he has to pay shared expenses until the kids graduate college (think cell phone bills, insurance, travel, etc).
Formerplayer, thank you for taking the time to write a thoughtful response. Your point about communication is something that's on my mind and I know I need to work on it.
Regarding over withholding 2019 taxes, I should clarify that I'm doing that partly because he is not making any payments on 2019 taxes right now. Instead, we're paying 2018 taxes from his monthly income (he's a partner and responsible to do his own quarterly payments), and until that amount is below $100,000, we will not qualify for a payment plan for 2018 (and note that I already took out a $100,000 HELOC in only my name because he has poor credit to cover the remainder of 2017 taxes). I anticipate we'll get our 2018 obligation down to $100,000 by April or May and then apply for a payment plan. Still, I probably should withhold from less from 2019 and allocate more to 2018 taxes. My reasoning, which may be flawed, is this: if our marriage falls apart, I'm very sensitive to what my obligation is to the IRS. It's still not too late to file 2018 or 2019 separately. I get that in a division of assets (or in our case debt) this will be offset, but as between me and the IRS, I'd be protected. I already had a wage garnishment scare with our 2017 taxes and a threatened tax lien from 2016 (both of which are now paid in full). Theoretically he could cover the tax liability from his IRA (I guess I could as well), but that would cost quite a bit in additional taxes and penalties.
Also, part of why I struggle to see the debt as "our debt" is because it is imposed on me without my consent. For example, for Christmas he and his ex wife can choose to buy the kids brand new iphones, computers, Garmin watches, skis, etc., and of course in my mind the money spent on those items is not being spent to pay taxes. That stuff is actually small in our big picture, but a source of resentment. Then there's sending them to a college that costs over $70,000 a year all in for the student, plus all his travel back and forth to see them at their various schools, which is not at all insignificant in our big picture. And what if there is no end to this, because he decides without my consent to buy his adult children cars, pay for graduate school, help them buy a house, pay for super expensive weddings, etc. It's this reasoning that makes me want to prioritize taking care of myself and baby with my income. But maybe it is delusional to think I have any control left.
Moving is a pretty good idea. It would free up enough equity to pay off our tax liability, but the monthly mortgage payments are pretty low, so from a monthly payment perspective, if we were to rent something modest but adequate, rent would probably not be much less than our currently mortgage payment (maybe as much as $1,000/month less). Plus he's not too keen on downsizing since he's older and prouder.
All this to say, maybe a financial divorce and a splitting of expenses is the way to go. He'll probably have a huge equity event the following year if I do that, but that might have never mattered anyway for reasons described above related to lack of control.
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OK, those are big sums owed. Do you have an adequate life insurance policy on your husband? (Not asking for nefarious reasons.)
It's good that you've paid the 2016 and 2017 taxes in full and are making strides on 2018. Personally I would throw your 2019 withholdings at 2018 and then ramp up for 2019 when 2018 is made good. After that you just (!) need an agreed schedule of appropriate withholdings to stay on course. You say that it's not too late to file separately for 2018 and 2019: while that may be technically true as far as the tax office are concerned I don't get the feeling that it is true as far as your husband is concerned. And you have already acknowledged both that for your family unit it is not financially advantageous to file separately and that if you family unit splits you can get credit for money you have paid towards the joint taxes. I worry that because of the shock of finding out and dealing with these debts you are considering only the financial downsides of joint finances and not the financial upsides (big taxes owed means even bigger income, right?). But it sounds as though you and your husband can cope financially with sorting this out and that you should be able to see a path to things being better in the future. Mustachianism is all about looking to your financial future, so perhaps gaming out where your joint family finances will be in 5, 10 or 20 years will make you feel better about where you are at the moment.
I think you have a legitimate concern over fairness for your young child as against the previous children of the marriage, particularly as respects current and future discretionary spending. I can see it will be a sensitive subject with your husband, but resenting it without saying anything would be worse than talking about it. Perhaps you can think through ways to discuss it with him in positive ways before talking? Possible answers might be 1) he sets aside a defined and equal amount each year for discretionary spending on each of his four kids up to their leaving college, 2) you want to make a head start on college funds for your kid so that you are not both having to pay this out of retirement income (and so that it can compound over the years), 3) once his kids are out of college he will be doing them no favours with continued economic outpatient care (there is evidence cited around these forums that adult children who are supported financially by their parents have less successful lives), and so on.
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""Plus even if that weren't in the divorce decree, he's not willing to tell his kids they can't go to a certain school or they have to take out loans because they are too expensive (note that both of the oldest two qualified for a full ride at a really good public state school, but instead chose to go private and the parents have to pay full freight). Also, in his state he has to pay shared expenses until the kids graduate college (think cell phone bills, insurance, travel, etc).""
The above is nuts. He's not willing to cut their lavish choices so his wife can have some sanity in the relationship ??
And this "" for Christmas he and his ex wife can choose to buy the kids brand new iphones, computers, Garmin watches, skis, etc.""
So now he has to continue to pay cell phone bills, wi-fi routers, car insurance, travel to spring break locations, ski trips, ski wax , custom ski boots, etc -- until they graduate college -- on things he has provided to them as extras bonuses for being alive ??? How much College, a 4yr dgeree , a MAsters, a Doctorate, 3 Doctorates for each child, where does it end ?
Serious, Serious question here. Have you actually read the divorce decree ? I don't mean some shorthand handwritten notes bullshit he hands you, but the Actual divorce paperwork signed by the judge , as Filed with the State and County Records Office in the physical jurisdiction where he got divorced ??
Because quite frankly, I think he is embelishing his supposed financial responsibiltiies per the divorce arrangement.
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" Have you actually read the divorce decree ? I don't mean some shorthand handwritten notes bullshit he hands you, but the Actual divorce paperwork signed by the judge , as Filed with the State and County Records Office in the physical jurisdiction where he got divorced ??"
Yes I have read it, but only by finding it in a cabinet somewhere. I am a lawyer myself, though not a family lawyer. The decree requires him to pay for college for each of the 3 kids, and to pay for their shared expenses until they graduate college, and to pay for life insurance for them until the youngest is 23. They agreed at the time of divorce to have a shared bank account from which she pays expenses, and he's required to fund it 50/50 with her, in addition to child support. The shared expenses are detailed in a comma separated list and include everything under the sun other than her travel, and their food and shelter. So she sent them to expensive summer camps, buys them sports equipment, hired a college consultant, visited 12 different colleges all over the country last year with the middle child, payed for private driver ed with the youngest, etc. To put a dollar amount on things, the shared expenses cost him about $3000 per month on average right now, and child support for 2 kids is $6100 a month (but one is about to graduate, then child support will be reduced). In their community these are normal expenses, but in my world they are not. To him she says, if you are opposed to x expense, tell the kids yourself they can't have it or do it. He's not wiling to say no to his kids, likely because he feels guilty about the divorce. It's stuff like that that makes me feel like there's no end to the kid expenses, and that he'll want to support them when they become young adults (one is 21 now and completely supported by his parents). I thought I could get around this by putting aside money for my daughter directly from my paychecks, for example by contributing to a 529 plan for her, but in the end, the contributions are likely washed out by all the rest of his debt and now our debt. By the time she's in college, he'll be retired. I won't be old enough for a typical retirement, but based on my life plan before I met him and how I preferred to live, I would have been retired.
Regarding life insurance for me, our marriage is pretty strained right now because of all of this and I see that topic as something that would go very badly. This has turned me into the wicked stepmother who doesn't care about his 3 older kids to him. Frankly, if we were just divorced and I could raise my daughter alone, I would be fine . And I'd be happy to do that, but what I'd hate to have to do is share her with him and eventually his new wife (I'm sure there would be one). It's hard to see anything but the bad.
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This sounds so hard. I'm sure there are many more factors that no one but you can understand, so please take this with a grain of salt. But the whole setup sounds like a trainwreck, and if I were you I would be looking to cut my losses, get out of dodge, and pursue my best life with my kid.
It sounds like you wanted to or planned to retire early/soon and that's now out of reach. It's one thing if that happens due to a sickness or other financial hardship related to lovingly supporting your partner, but I do not think you should be on the hook for his excessive spending on his kids. The thing is, that might NEVER go away, as other commenters have pointed out. And what about when his kids start having kids? Will he be able to say no to financing private school/summer camp/ski trips or whatever for the grandbabies if their parents can't afford it?
It sounds like he/his kids are old enough where to expect them to change their dynamics now will only lead to frustration for you. So if it's making you unhappy (and it indeed sounds like it is), then...I'm not sure what else you could do. The idea of divorcing on paper but continuing to live together as partners is interesting, but in practice sounds like an emotional strain that I doubt would work for most couples.
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The issue is not the amount of $ he spends on his other kids, the real issue is he does not value your feelings or opinions regarding any of this, it doesn't sound like he consults you on any of the non-obligation spending but expects you to just be okay with all including his tax debt. Honestly, your best option is to cut your losses and get out. Make sure your divorce decree has the same level of support for your kid. If you stay in the marriage, you will be supporting your kid alone and helping him pay his taxes while he spends his money on his other kids. As someone else pointed out and as you suspect, it will not be over once they are done with college. There will be first house to buy, grandkids, asking for money for whatever reason. As he has already shown, he will make those decisions alone and he will not give you any say.
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OP, you've got a very big problem here, and it's not money. Its your husband.
"The reasons he has accumulated so much debt are: (1) divorce obligations that he didn’t fully disclose before we were married (and admittedly, I didn’t push him to disclose); (2) overspending in the years between his divorce and when we met and were married by borrowing against his brokerage account believing it would never go down but it did in a big way, which he regrets this terribly; and (3) overspending to buy a house at the very beginning of our marriage, back when I thought he just had deep pockets and didn’t ask enough questions. I learned about all of this after we were married. "
"(4) we’ve been to counseling, but he discontinued counseling because he says I only want to complain that he needs to pay taxes and his other debt and he already knows that"
"he's not willing to tell his kids they can't go to a certain school or they have to take out loans because they are too expensive (note that both of the oldest two qualified for a full ride at a really good public state school, but instead chose to go private and the parents have to pay full freight)."
"Also, part of why I struggle to see the debt as "our debt" is because it is imposed on me without my consent. For example, for Christmas he and his ex wife can choose to buy the kids brand new iphones, computers, Garmin watches, skis, etc., and of course in my mind the money spent on those items is not being spent to pay taxes. That stuff is actually small in our big picture, but a source of resentment. Then there's sending them to a college that costs over $70,000 a year all in for the student, plus all his travel back and forth to see them at their various schools, which is not at all insignificant in our big picture. And what if there is no end to this, because he decides without my consent to buy his adult children cars, pay for graduate school, help them buy a house, pay for super expensive weddings, etc. It's this reasoning that makes me want to prioritize taking care of myself and baby with my income. But maybe it is delusional to think I have any control left."
Themes I'm seeing:
-withholding relevant information
-making decisions that materially impact you and your child without you having any say in them
-disregard for your financial wellbeing and future, including the future of your child
He's not treating you as a full partner. He didn't disclose his divorce obligations before you were married? Someone committed to a life with you would have laid it ALL on the table. Anything less than full disclosure was a betrayal. You shouldn't have needed to ask. At this point, regardless of the money situation, he's pretty seriously damaged your relationship. I bet if you were able to talk to the ex-wife, you'd start hearing the same themes about how he treated her.
You're in therapy, continue that. You need to work through your emotions and decide what you want. Once you've done that, then you need to get back into counseling with your husband. Because unless he makes some changes in his behavior, he's going to end up with 2 ex-wives at some point.
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Regarding life insurance for me, our marriage is pretty strained right now because of all of this and I see that topic as something that would go very badly. This has turned me into the wicked stepmother who doesn't care about his 3 older kids to him. Frankly, if we were just divorced and I could raise my daughter alone, I would be fine . And I'd be happy to do that, but what I'd hate to have to do is share her with him and eventually his new wife (I'm sure there would be one). It's hard to see anything but the bad.
I'm really sorry, but it sounds to me like your marriage is already over. You and your husband have giant values mismatches, he has not been open and honest throughout your engagement and marriage, and it sounds like you are mentally and emotionally 3/4 of the way out the door.
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So very sorry to hear of your situation. One of my close friends ended up in terrible financial straits over the expensive private college problem. She had three children. The first went to an expensive private college but had a significant scholarship. By the time the middle child headed for college my friend and her husband were in the midst of a divorce (and had spent a lot on medical bills). They wanted the second child to have the same opportunities as the first, although the cost was by now higher and her scholarships not as generous. Four years later they again wanted the youngest child to have the same kind of education. My friend thought she could sell her house for a large profit to cover this, but the 2008 recession hit. Father lost his job and her house sold for $140,000 less than it would have a year earlier. She paid for third chil’s private college but now has no money saved for retirement. Fortunately she will get part of her ex-husband’s pension and social security, but her financial situation remains precarious.
I watched this happen, bit by bit. Even when the finances were clear, she could not bring herself to treat the second and third child different from the first. It sounds like your husband is in that position.
It seems the only thing holding you back from divorce is not wanting to share your daughter with another woman. But you are already sharing your life with another woman. I hope you are getting counseling on your own to help you assess what will work for you. I wish you the best in dealing with this difficult situation.
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I have to agree with the last few posters, you seem half way out of this marriage already with only the thought of having to share your child with others holding you back. But which is better for your daughter; growing up in home where her father ignores the very real fears and concerns of her mother, her mother just wants out, money issues reign, and her dad puts her second to her half-siblings wants or growing up in a home where her primary care giver (you) loves her wants the best for her and won't put her needs second to anyone else and spending every other weekend with her dad and a hypothetical step mom?
I know a previous poster mentioned getting everything you can out of the divorce decree but if you're not concerned about money after you split do you think you husband would be agree to never giving you a dime in exchange for signing away his parental rights? My sister struck this deal with her first husband, even though she could have used the money, because dealing with him and his flavor of the week wasn't worth it.
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I have to agree with the last few posters, you seem half way out of this marriage already with only the thought of having to share your child with others holding you back. But which is better for your daughter; growing up in home where her father ignores the very real fears and concerns of her mother, her mother just wants out, money issues reign, and her dad puts her second to her half-siblings wants or growing up in a home where her primary care giver (you) loves her wants the best for her and won't put her needs second to anyone else and spending every other weekend with her dad and a hypothetical step mom?
I know a previous poster mentioned getting everything you can out of the divorce decree but if you're not concerned about money after you split do you think you husband would be agree to never giving you a dime in exchange for signing away his parental rights? My sister struck this deal with her first husband, even though she could have used the money, because dealing with him and his flavor of the week wasn't worth it.
My ex wanted to sign his parental rights over, I fully agreed but the judge wouldn't allow it without another person there to adopt our son. It is not as easy as it sounds even if both parties agree. We ended up writing the decree with zero scheduled visitation for ex and no child support for me (I was the caregiver in every way). I was the higher earner and had zero financial issues taking care of our son. This was at the end of 2012. At the time he was underemployed. I ended up going back to court to get some child support and now get $250/mo. He still does not see our son by his choice (I have reached out to him several times). It would be fine by me but our son is heartbroken over this. He is now 7, he was 8 months when we split up. I did not trust him to be a caring/proper/safe parent when we were divorcing due to his nonchalant attitude about our son's health (he was born at 25 weeks). He has 2 kids from a previous marriage who he does everything for. If you trust your husband with your kid, then don't try to get his parental rights revoked or anything like that. But for your peace of mind, for your kid's sake, consider if you really want to stay in this marriage. The best day of my life was when I moved out of the house, the next best day was when divorce was final. It was a huge relief and got my peace of mind back.
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Can you pretend that you and DH have the same income after his previous life expenses are taken out?
DH makes 3x what you do. DH comes with baggage.....his prior self has come calling. The problem may also be DH feels like he earns more (when he really doesn’t given prior self). You knew he had baggage-you just didn’t know how much baggage. It’s kind of like when people get married to a doctor and THEN find out they have $300K of student loans. Their future earning potential is there though!
Let’s assume he makes $450k and you make $150k. At that point his $10K per month payments seem like not a big deal to me. Now if you make $50k and he makes $150k, that $10 is a much bigger deal. Without context, we can’t tell you if the obligations are onerous or not.
I have the DH and 3 kids between middle school and college. I paid for his law school. You can bet your butt I would be lawyering up myself if he wanted a divorce now. Wife #1 wants her ROI back. Try to see her point of view, and not her as the enemy. I am going to assume your husband is more medical field than lawyer because otherwise the college conditions would have been 1/3, 1/3, 1/3 (kid) with a cap at $X and not to exceed x% of income in the future or the amount reverts to the child for excess.
There are 16 years to pay for college for the 4 kids you both have (both). Does DH have it in him to work 16 more years? If he does, and is willing to work, I think you should think about his $ as his $. But you should be honest with him about your plans and the need to save for your DD in a 529 since you cannot guarantee future cash flows forever. We saved equal amounts for our kids in college funds, but we are cash flowing the balance. We sat DS #1 down and told him if something bad happened he would need to help out his younger siblings until they were even again. This option probably isn’t available to blended families, so it makes sense for you to add to hers as you go. (1/18th per year would be reasonable-$15k/yr if you plan on the $280k version of college.) BUT, does your youngest child get childcare? If so, this is a cost that you would probably subtract from that college funding amount to be fair to the other kids. BTW, if your daughter got into Harvard, would to make her go to the free state school?? I don’t think so. My son has a full ride, and we decided to send him to a more challenging college to the tune of $36k per year. We all decided together though....
“He’s in a lot of debt.” “His net worth is 5x mine.” Then apparently his debt is not so bad and he is using leverage.
You took out a HELOC in your name only-that was a mistake-even if his credit is bad, don’t put debt in your name only. It won’t teach him any lessons. Your DH needs life insurance-and you need to be named on the policy. You need life insurance too, and DD needs to be named on your policy if you worry about her having access to future benefits if you were no longer alive. A $100k/20 year term policy would be fine for DD’s college cost and would cost very little to you on a monthly basis. Disability policies for both of you are critical given your obligations.
You need to sit down with a FINANCIAL counselor vs a marriage counselor. We are random internet people-who have opinions, but not all the facts.
With the tax situation, people in partnerships often have a huge bill looming and use their annual distributions to fund it. My DH’s payout is 85% of his base. The issues arise when you rely on your distributions to pay for past excess - which I think is your case right now. Sometimes you need some short-term pain for long-term payoffs though. We try really hard not to “spend” the payout before it comes and to keep 1 year ahead of the payout-just in case there’s a year where it doesn’t come. To get there, it required cutting back for awhile. Having that cushion in our budget reduces anxiety.
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Couponvan: thanks for your comments and different perspective.
I’ve tried to think of his child expenses and debt like a big student loan before, and that helps. I guess the difference I come back to is the student loan can be paid off but the expenses for the 3 older kids can go on indefinitely. Your numbers aren’t too far off – I’m trying not to over disclose to the internet, though. DH will most likely be retired when baby starts college given his age, but I suppose there are a few people out there still working at that age. But he’s mentioned plans to retire in 10 years from now, and there are so many factors that could make that easily possible or very difficult. And I guess the obvious difference with your situation is that you have a voice in where your kids go to college and how much you spend as a family, but I have none (and this could also be true of other future expenses like grad school, houses, whatever). I definitely like the solution you mentioned about the tax bill, and I hope it is possible for us to get there, too, as that would take a giant weight off my shoulders. And while he can easily leverage the debt, I cannot easily leverage it, as we are unequal in terms of assets and income in the event of death or divorce. But, sometimes I get so weighed down by the negatives that I forget that there’s plenty of good, too.
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OMG... your post brought back all of the same issues I had in my marriage, except one. My ex treated his first family much better than he treated me or the children we had together. Marriage didn't last, as a result. I got tired of financing his first family, which I did indirectly with all of the spending on them. Setting up a separate household bank account, with associated debit card, that funds joint expenses can go a long way toward finding peace.
To make the taxes equitable, I'd suggest running the numbers to find out how much you would owe if you filed as head of household. Then when you file jointly, he has to pay you back the difference.
If you take out life insurance, I'd suggest setting up a trust so that DH doesn't spend the money on something other than DD, assuming he would become the primary caretaker.
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The issue is the lack of voice in the situation. For every time he mentions an expense for the older kids, try and envision yourself in the situation with DD in the future—-but you also need a budget. Budgeted are REALLY hard with variable income and without all the information. I’m a CPA and we have about five different budgets running at any one moment in time. 10 year average payout budget, most likely payout budget, 50% payout budget, no payout budget (the austerity budget!), and a FIRE budget (dream budget - for now we’d have to sell the house LCOL area, not pay for college, etc). This year we are in the process of lifestyle inflation big time and I struggle with “wasting $” versus “looking the part” for future earning potential.
I’m sorry you don’t feel like you’ve got enough of a say in the family finances. I really do recommend you spend some time as a couple working on the $ side. A lot of marriages struggle due to finances. Also, I don’t know how long you have been married, but if at all close to 10, try to stick it out for the social security guarantees. Since he makes so much and is older, it’s probably worth it. (Mercenary I know.) DH and I had our own struggles around the 20 year mark....that’s another somewhat safety year for spousal support. Even though we struggle, we are committed to making progress in our marriage. Some religious reasons, some cultural reasons, some familial reasons, obviously personal reasons, but plenty of reasons to keep working through to a better and happier marriage. For better or worse-for richer or poorer. ;-)
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At some point, your husband's legal obligations to pay for his older kids' stuff ends, right?
There's a financial issue, and there's a relationship issue. They're connected, but they are not the same. In your shoes, I would be willing to buckle down and make the sacrifices needed to deal with the financial issues, but only if he agrees that all spending above his legal obligations is a joint decision between the two of you. That doesn't mean you should be preventing him from ever spending another dime on his kids after they graduate from college. With the income levels of your household, I think it might be reasonable for him to chip in for weddings, house down payments, etc., if he wants to. But it does mean that those decisions should made by the two of you together, taking the overall state of your family finances into account--including your daughter's college fund.
If he won't agree to that, I don't think you've really got a functional marriage going on here. You can try going to counseling together and see if that helps; but I wouldn't stick around indefinitely in a marriage where my spouse made major financial decisions without me.
I also think you should reflect a bit on the way you talk about divorce. Sharing your daughter with her dad wouldn't be a bad thing--in fact, it would be much worse if he just goes away. She deserves solid relationships with both her parents. She also deserves to grow up in a healthy household. I don't live in your house, and I don't have nearly enough information to know if she's getting that right now--or, if she isn't if it's reasonably possible for you and your husband to get to that point through some hard work and honest conversations. But if your marriage isn't healthy and can't be fixed, then divorce is probably better for her too.
Again, this is not a recommendation to get divorced! It's just a recommendation not to treat divorce as a terrible bogeyman. If you stay married, it should be because the marriage is working for you; it may not be perfect, but it is broadly functional and healthy.
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From the limited amount of information, it sounds like your DH is struggling with keeping up appearances that go along with a much larger than average income, guilt with his older kids about how things turned out, and the stresses of constantly feeling behind, despite earning huge dollars. I think a lot of people who own their own businesses only see what they are billing out and totally discredit the volume of expenses/taxes that come along with that. If he sees himself as 'someone who makes $400+K' (when in reality take-home might be closer to half of that) it is hard to rationalize saying no because in his mind he SHOULD be able to afford these things.
That said, he has chosen to remarry and have another child, and now you and he need to make some decisions about the future, together. If he cannot acknowledge the situation, and make some compromises with you, then I guess you will have a choice to make about what kind of future you want for yourself.
Do you think he would be more amenable to creating a plan for the future if you use a third party to assist you? If he is already feeling like he is failing to be able to provide everything to everyone, and now his new younger wife is trying to tell him all the things he has done wrong, I can see why he might be throwing his hands up and just doing as he pleases. (Please note that in no way am I implying that you have done anything wrong - I am simply trying to view this situation through his eyes so that you might have some insight into what the true issues are, and will then perhaps be able to address them.)
It sounds to me like there is a definite possibility of light at the end of this tunnel - you both just need to get on the same page and sort it out TOGETHER.
Or, he could just be an asshole - tough for us to know from a short story on the internet. :)
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" Plus he's not too keen on downsizing since he's older and prouder. " Regarding your potential house sale to free up equity to eliminate the tax debt.
I wonder how proud he would feel if his clients / patients knew he had a rolling tax debt of probably $150k annually to the IRS. Maybe that wouldn't bother him, I sense he would justify to his clients [after being mortified they found out ] , not paying his debts , by rationalizing how great a life he is providing for his older kids. " Well Yes I owe, but my kids Ski at Aspen 3 times a year , and I'm getting them a condo in Sun VAlley ". Not paying his debts in a timely manner is not keeping his word, not holding up his end of the societal contract. Are there not fees and penalties each year ?? Yes I get it that you all are actually paying the debts, late. A day late and a dollar short.
I can't see him retiring in 10 years. As another poster said, soon there will be grandchildren - who will " need" skis and lift passes , daycare and fancy clothes.
There will always be another " future equity event " to be keeping him tied to the job. Until I suppose he finally sells his portion of the practice.
And your child , he/she will be growing up seeing and expecting this life of privledge for themselves. It seems sad.
Best of luck to you in these trying times. A quote I've always liked -- " A Clean conscience makes for a soft pillow ". Regarding how you are being treated, How does he sleep at night....?
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The issue is not the amount of $ he spends on his other kids, the real issue is he does not value your feelings or opinions regarding any of this, it doesn't sound like he consults you on any of the non-obligation spending but expects you to just be okay with all including his tax debt. Honestly, your best option is to cut your losses and get out. Make sure your divorce decree has the same level of support for your kid. If you stay in the marriage, you will be supporting your kid alone and helping him pay his taxes while he spends his money on his other kids. As someone else pointed out and as you suspect, it will not be over once they are done with college. There will be first house to buy, grandkids, asking for money for whatever reason. As he has already shown, he will make those decisions alone and he will not give you any say.
SKL is on point with this. I've dealt with this with both DH and DHs father. The problem is your DH not taking into account your VERY VALID worries and concerns. If you do divorce, make sure you can support your child on your own because in most states his obligation to his first family takes precedence. So if he's giving them 50%, then you can only get a portion of the remaining 50%, and he needs something to live off of.
In dealing with DH's ex, I expressed similar concerns as you when she started signing the child up for every expensive thing on the planet, including ones that weren't in the decree. He never denigrated my feelings or accused me of not caring about his kid, he agreed to cut back and spend on only the things in the decree (hello no more 27k a year cultish christian school, DH is Jewish). She was guilting him into paying 100% because she didn't work (popped out a couple more kids soon after the divorce with the guy she'd been cheating on DH with).
To our disgust when the extra 30-40k a year stopped rolling in, she let DH know the kid wasn't his and that she'd "duped" him into paying for her third husbands child for 7 years. Couldn't sue her for lying in their state since they were legally married at the time of the birth. To HER shock however, he was able to get the initial child support order overthrown, and she got a very nasty talking down to by the judge.
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I don't have any advice. Just want to make a comment.
You seem to be a grounded, smart, and strong woman. You have plans for yourself and your kid. You have a job making good money, and probably capable of being an independent mom.
Sound to me he not being fair or care much about your opinions. More of a one way street rather. I'm not suggesting anything or whatever. But if I were you, I think I'd prefer to be single and take care of my own daughter and do things that make me happy, and where my opinion with the one I loved matters. You know, live in a way that make you happy.
The way I see it, the financial situation with is ex-wife and kids won't get any better any time soon. I don't think seeing a therapist and counseling will help you much, because it's not in your control, and he avoiding counseling. So, best of luck to you.
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On the basis of limited information over the internet, it sounds like you hate him. If you fix the taxes and the spending, he'll still be someone who likes fancy houses, ski trips, and Garmin watches and he'll still be someone who doesn't value your opinion.
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So if I understand you correctly:
-you have no prenup protecting your semi-liquid net worth that you brought into the marriage from his debts
-you have no insurance on him to pay off his debts in the event of his death or disability
-you are currently liable for his debts and tax debt to the extent of almost having your wages garnished
-your income is less than his annual unpaid tax obligation
-he pays child support to his ex for 4 more years
-he pays 1-3 halves of college tuition for 6 more years
-he pays half of an undetermined amount of "living expenses" for 1-3 of his kids for 6 more years
-he pays for life insurance for his kids of 8 more years
-he pays support to his parents indefinitely
From where I sit, you are fifth or seventh in line when it comes to "say" in his spending (himself, adult child #1, adult child #2, ex, minor teen child, parent(s) being supported) but you are first in line when it comes to being responsible for covering the debts of said spending. A divorce or financial separation would at least protect the assets you've built for you and your baby thus far. You may have moral or religious reasons not to divorce, but it seems fairly clear that this marriage is a financial disaster for you. Better to cut your losses now.
Honestly, from the sound of it, your husband entered into the marriage fraudulently and you didn't do your own due diligence (which you graciously admit). I'm hard pressed to see that he was able to afford his financial obligations before you and your child came along since he was so far behind on his taxes. I'm a step-parent too, so I understand the frustrations of being out of the decision making loop, but what you're describing sound WAY beyond typical stepping issues. You have my deepest sympathies.
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I agree that he needs financial counseling. While he does spend big on his kids from his prior marriage, according to your outline you provided he still has about as much left of his massive income as you have yourself. If you are looking for a path of reconciliation and a future together, you need to accept his baggage and move on together. From what you've said it sounds like all he hears is your resentment for his past; not your fear for the future. I assume he either has not considered his own future with any analytical detail or has similar fears as yours with no skills to face them himself. If you can follow up the financial triage with a deep discussion about your values and goals, you may be able to plan a future together.
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This sounds like an incredibly difficult situation. Based on what's been described here, I'd probably be willing to go to marriage counseling, as well as seeing a financial adviser. For the marriage counseling, I'd focus the conversation on how you feel about your value in the marriage, your ability to influence your life/future & the life & future of your child. Those are pretty big issues, and i wouldn't be sleeping at night if I thought I had no control over those outcomes.
On the financial side, I'd meet with a financial adviser who could potentially help you set up a tax plan & a budget. If your husband makes $500k, and wants to/legally is obligated to put $100K away every year for kid expenses, I think that's fine & reasonable. That would then be a clear line item in your budget. If another $50k goes to parental expenses, still fine. But, from the way I read your posts, it doesn't sound like he has a budget, understands or prioritizes his tax liability, and you are left behind cleaning up the mess, stressing about the finances, and trying to put things back in order. That doesn't work. Do you have a budget & a financial plan that you two are working on together? If you could get this in place, maybe removing the finances & stress from the marriage would put you in a place to be clear headed on next steps for the relationship overall. .
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For what it's worth, my kids have a stepmom, and she is cool and funny and she loves them and they love her and I'm glad she's in our lives. It is not the life I imagined for my kids and it's not always easy for any of us, but I really don't believe at this point that they even would want their father and me to get back together.
Anyway.
I feel like there are two options here: totally separate finances, or REAL joint finances. Where you make a plan together and are all-in. Right now, things are joint but you have let yourself be pushed into decisions you don't like--owning a house that you can't afford and don't love, for instance. It is not reasonable to take on his debts if he is not concerning himself with your well-being.
My husband agreed to pay off his ex-wife's student loans. I think this was overly generous, and his income is like 60% what it was when he made this promise. But we all have baggage, and I consider this OUR debt that WE will pay together. Meanwhile, he's taken on my kids.
You've gotten really good advice here. I hope that you can find a way forward.
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First off, this sounds like a really horrible situation and I'm sorry to hear that you are dealing with this. I wanted to say that I don't think that you have done anything prior to your marriage to prevent this situation - it was up to him to disclose his financial situation, not up to you to drag the info out of him. My other thought is whether it is possible to get an annulment rather than divorce - by his failure to disclose this really important information, he has not told you who he is and what his life is like. If you had known, would you have married him? I'm also wondering whether he could afford his current lifestyle without you bc it sounds like you are taking a lot of responsibility for his debt. He sounds really disrespectful towards you and your baby.
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But, sometimes I get so weighed down by the negatives that I forget that there’s plenty of good, too.
This is where you need to start. Make a list of all the positives. Read it daily. Remember why you married the guy in the first place; is he a good father to your child?, is he a good person in general; how does he treat others, etc. Your current situation will pass as his kids age. I was in a similar place and thought the same thing would happen. Major life events changed everything and then the kids grew up, were on their own and pay for their own lives. It seemed a magic switch when, in the moment, I was quite stressed about it.
In the meantime -- I would definitely keep separate checking accounts. Wondering why his taxes aren't taken out pre-pay check even if he is a partner. Couldn't that be handled by the accounting dept. at his workplace?
If you had your current household expenses to an absolute minimum could you each pay half (or preferably by percentage of income 25% for you 75% for him ?) and then everything else he makes goes to retirement, back taxes, current taxes, tuition, parents, kid stuff in that order. Perhaps he doesn't actually like dealing with money. I think you need to have a serious conversation about feelings and worth and all that 'not very fun stuff' that money issues bring up without blame and truly listen. Everybody has money issues. It's almost never about the money -- it's about fear or self-worth or something else. Once you get past that -- I guarantee you the money problems will solve themselves. Stop using it as a weapon. It's just money. If tomorrow that money flow suddenly evaporated you'd figure out a way to survive.
PS -- one thing I don't get is why the kids have life insurance but the parents don't ? Also why not sell the house and move to a smaller one ?
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Wow, what a hard situation!
I sympathise with OP. There are a lot of good suggestions already.
I can't help asking myself (no judgement here). It seems that OP is a very intelligent, highly educated, and responsible person. How long did she know her husband before marrying him? What was it that she was so attracted to him that she decided to marry him? Didn't she know the "baggages" that he could bring to the marriage? Didn't she observe the way he treated his ex family including his 3 kids and the way he treated her when she brought forward her "voices" on the matter that was important to her and their future before the marriage?
People do not usually change.
Several posters already mentioned the potential divorce. With the limited information OP provided, I know what I would do. But it does not matter what I or someone would do. Only OP knows whether this marriage is worth saving.
Good luck!
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I am so sorry for your situation. If he does make 3x more than you, yet a lot of his income goes towards his former life it sounds like you two end up about equal in the end.
It would be very hard to look at it in this way, as he is not contributing equally to your life, but it may make you feel better. You could also look at just the kids. 3:1 so 75% for them and 25% for your child. Hopefully his older children will be weaned soon, but as others have mentioned the pattern is set for expensive weddings & grandchildren. Can your family lifestyle function with just 25-33% of his after tax income?
One other problem is that it sounds like the house you bought was based on your combined incomes without considering all the child support. Looking to downsize may help relieve stress in your family.
It does sound like you could be self sufficient, so take strength from that.
Do you have his, hers & our bank accounts? If you two are contributing equally into the "ours" account, and your shared expenses are being paid from that, I would leave him to pay the child support and debt from his end.
I would also have a serious discussion about the taxes. Do the math with you both filling separately vs jointly. Show him the difference. As it is an overall win for your family you should be able to take the difference to cover your extra taxes from the joint account.
I am sorry you are struggling with this. Blended families are challenging at every stage, wishing you the best.
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Can you refile taxes from prior years? I believe here I can submit corrections back 3 years. If so, maybe you want to look into that to get out of some of the tax owing.
Yes, you may need an accountant to help.
Yes, you may need to pay, net, more taxes than if you file married, joint. But that may not be a terrible amount compared to your current situation.
Then, get a move forward budget together with your DH, where he figures out how to pay his taxes, first, followed by his commitment to his kids, then alimony, then parent, and then a budget for the two of you to live on, together. Yep, it will be a whole lot less. The net remaining will be 40% your income and 60% his income. If you currently make $60k, then that means he only brings $90k into the home, not $200k.
I think you need to figure out if you can accept that 60% of his income is dedicated elsewhere, and another 20% may be dedicated to tax repayment.
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I have to agree with the last few posters, you seem half way out of this marriage already with only the thought of having to share your child with others holding you back. But which is better for your daughter; growing up in home where her father ignores the very real fears and concerns of her mother, her mother just wants out, money issues reign, and her dad puts her second to her half-siblings wants or growing up in a home where her primary care giver (you) loves her wants the best for her and won't put her needs second to anyone else and spending every other weekend with her dad and a hypothetical step mom?
I know a previous poster mentioned getting everything you can out of the divorce decree but if you're not concerned about money after you split do you think you husband would be agree to never giving you a dime in exchange for signing away his parental rights? My sister struck this deal with her first husband, even though she could have used the money, because dealing with him and his flavor of the week wasn't worth it.
My ex wanted to sign his parental rights over, I fully agreed but the judge wouldn't allow it without another person there to adopt our son. It is not as easy as it sounds even if both parties agree. We ended up writing the decree with zero scheduled visitation for ex and no child support for me (I was the caregiver in every way). I was the higher earner and had zero financial issues taking care of our son. This was at the end of 2012. At the time he was underemployed. I ended up going back to court to get some child support and now get $250/mo. He still does not see our son by his choice (I have reached out to him several times). It would be fine by me but our son is heartbroken over this. He is now 7, he was 8 months when we split up. I did not trust him to be a caring/proper/safe parent when we were divorcing due to his nonchalant attitude about our son's health (he was born at 25 weeks). He has 2 kids from a previous marriage who he does everything for. If you trust your husband with your kid, then don't try to get his parental rights revoked or anything like that. But for your peace of mind, for your kid's sake, consider if you really want to stay in this marriage. The best day of my life was when I moved out of the house, the next best day was when divorce was final. It was a huge relief and got my peace of mind back.
This must really depend on what state you're in. It was very easy in my sisters case to have her ex give up parental rights, no one else required to adopt. Her ex filled out and submitted the paper work, the went before a judge who asked my sister if she was okay with it and that was that. I wasn't recommending the OP try to get his rights taken away; a very difficult task, only to see if he would be willing give them up. In which case, their daughter would be better off.
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so, wait, all this talk about his assets are pre-marital assets... is his divorce fully finalized? I have heard of this thing where you are divorced so you can remarry but the divorce, separation of assets isn't done.
I mean once its done, the assets are split right, and not "premarital" anymore. Sure, the ex can come back and ask for more child support, and this is america so you can litigate anything you want.
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Oh boy, there's a lot going on here, and I think you would benefit from both financial and marital counseling. It sounds like he's viewing his income as his alone, to spend however he chooses, while the debts are viewed as shared, so it's understandable that you would be upset by that. You need to either fully combine finances or fully separate them (in how you view them, moreso than in how the actual accounts are set up), and fully combining them means you get some say on say, how much he spends on his kids' Christmas gifts. It also sounds like he's prioritizing his older kids' needs over that of your kid.
The problem with being stuck with his debts in the event of his death is probably the easiest one to solve: make sure you have enough life insurance to cover all his debts, and maybe even his share of the college expenses for his older kids.
As for dealing with debt in the case of divorce, do you think he'd be open to a post-nup? Basically specifying that you each leave with the assets you came into the marriage with, share the assets earned during your marriage, and specifying which debts are shared (e.g. mortgage) and which belong solely to him (and solely to you, if applicable)?
I sympathize with your wanting to keep the 529 secret, but I'd also urge you to tell him about it. He'll likely find out about it at some point anyway. You need a lot more financial transparency in your marriage, and if he finds out you've been keeping a secret he'll find it easy to justify doing the same.
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so, wait, all this talk about his assets are pre-marital assets... is his divorce fully finalized? I have heard of this thing where you are divorced so you can remarry but the divorce, separation of assets isn't done.
I mean once its done, the assets are split right, and not "premarital" anymore. Sure, the ex can come back and ask for more child support, and this is america so you can litigate anything you want.
I had assumed the reference to pre-marital assets was his assets at time of 2nd marriage, not his assets before first marriage. Your interpretation makes this whole situation much more complex.
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so, wait, all this talk about his assets are pre-marital assets... is his divorce fully finalized? I have heard of this thing where you are divorced so you can remarry but the divorce, separation of assets isn't done.
I mean once its done, the assets are split right, and not "premarital" anymore. Sure, the ex can come back and ask for more child support, and this is america so you can litigate anything you want.
I had assumed the reference to pre-marital assets was his assets at time of 2nd marriage, not his assets before first marriage. Your interpretation makes this whole situation much more complex.
Exactly. This guy has a bunch of pre-marital commitments or liabilities which it sounds like were disclosed that they exist and OP should have asked more questions about.. But, I don't see why they can't sit down and figure out what their personal balance sheet looks like. Separate from the assets, yes the Ex may be able to get his liabilities changed, ie, increased child support if this big equity event happens. But, regardless, I would think with some talking this forward year's cash flow statement/budget could be prepared.
OP may also need to sit down with the Husband and the Accountant, as the business side of income is rarely as straightforward as W-W wageslaves think it is.
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I am sorry to hear this. I agree with many of the posters that your husband is being very unfair to you. I just wanted to tell you (and it sounds like you already know this but sometimes hearing it again can help) that you will be just fine with your daughter. I have raised my daughter alone for the past 14 years (she's 15) and even though sometimes it can be hard to juggle, be three places at once and stay home for the cable appointment, it has given me, actually both of us, so much peace. We should control our own destiny and I think this is the key for you. You currently have little to no say in your life, and that of your daughter. If you decide divorce is the answer, hopefully your husband will step up and be the father your daughter deserves but you can't control his behavior, as you well know. Do what's right for you and your daughter. Frankly, you sound miserable and I don't blame you one bit.
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I'm interested in what people would be saying if it were the husband who had written in saying that his second wife married him knowing he was divorced with three kids but was now complaining about him having financial obligations to them, was panicking about debt and making payments from his accounts without his agreement, was talking about filing taxes separately although it would put up the total amount owed, was secretly putting aside money that could be used to pay debts owed now for her child's college in 15 years' time? Would we be advising him to divorce her?
I'm just saying: we are only getting one side of the story here and even then OP acknowledges that there are communication failures on both sides of this marriage. I'd be wary of saying to someone with a small child that they should be looking at walking away from the marriage and even discussing terminating the father's rights to be a parent to his child (and that child's right to have an involved father), just on the basis of a few posts on an internet forum, when there is an obvious communication problem which has potential solutions. Would people be as trigger happy if it were the father suggesting walking away from the marriage and the child?
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I'm interested in what people would be saying if it were the husband who had written in saying that his second wife married him knowing he was divorced with three kids but was now complaining about him having financial obligations to them, was panicking about debt and making payments from his accounts without his agreement, was talking about filing taxes separately although it would put up the total amount owed, was secretly putting aside money that could be used to pay debts owed now for her child's college in 15 years' time? Would we be advising him to divorce her?
I'm just saying: we are only getting one side of the story here and even then OP acknowledges that there are communication failures on both sides of this marriage. I'd be wary of saying to someone with a small child that they should be looking at walking away from the marriage and even discussing terminating the father's rights to be a parent to his child (and that child's right to have an involved father), just on the basis of a few posts on an internet forum, when there is an obvious communication problem which has potential solutions. Would people be as trigger happy if it were the father suggesting walking away from the marriage and the child?
If the father came on here and posted his perspective? On how he can't be bothered to pay taxes during the year, so with fees and penalties owes more than his wife makes in a year. Never disclosed to his new wife the total of his debts and obligations. Refused to downsize at all to save money. Bought his kids from the previous marriage expensive gifts for Christmas/birthdays. Ignored his current wife's concerns on said debts and obligations, refused to continue counseling because it was holding him accountable for his action. Bankrolled his kids education but refused to put any money aside for his child from the current marriage because not saving for that is easier than cutting expenses in order to pay off his debt. If the father posted that here? No we probably wouldn't be telling him to leave the marriage. The comments would be more along the line of telling him to make a financial plan with his current wife, start paying his taxes throughout the year so he won't get hit with fines and penalties for underpayment, cut back his life style, restart counseling with his wife.
But he's not the one who wrote here, we can't give him advice, the OP can't make him change. If he won't change on his own, her only course of action, that will provide her with the financial security she wants, is to leave.
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I'm interested in what people would be saying if it were the husband who had written in saying that his second wife married him knowing he was divorced with three kids but was now complaining about him having financial obligations to them, was panicking about debt and making payments from his accounts without his agreement, was talking about filing taxes separately although it would put up the total amount owed, was secretly putting aside money that could be used to pay debts owed now for her child's college in 15 years' time? Would we be advising him to divorce her?
I'm just saying: we are only getting one side of the story here and even then OP acknowledges that there are communication failures on both sides of this marriage. I'd be wary of saying to someone with a small child that they should be looking at walking away from the marriage and even discussing terminating the father's rights to be a parent to his child (and that child's right to have an involved father), just on the basis of a few posts on an internet forum, when there is an obvious communication problem which has potential solutions. Would people be as trigger happy if it were the father suggesting walking away from the marriage and the child?
If the father came on here and posted his perspective? On how he can't be bothered to pay taxes during the year, so with fees and penalties owes more than his wife makes in a year. Never disclosed to his new wife the total of his debts and obligations. Refused to downsize at all to save money. Bought his kids from the previous marriage expensive gifts for Christmas/birthdays. Ignored his current wife's concerns on said debts and obligations, refused to continue counseling because it was holding him accountable for his action. Bankrolled his kids education but refused to put any money aside for his child from the current marriage because not saving for that is easier than cutting expenses in order to pay off his debt. If the father posted that here? No we probably wouldn't be telling him to leave the marriage. The comments would be more along the line of telling him to make a financial plan with his current wife, start paying his taxes throughout the year so he won't get hit with fines and penalties for underpayment, cut back his life style, restart counseling with his wife.
But he's not the one who wrote here, we can't give him advice, the OP can't make him change. If he won't change on his own, her only course of action, that will provide her with the financial security she wants, is to leave.
Right. The advice would be that he should try to sort things out. Not tell him to get a divorce, or that the adviser in the same position would be getting a divorce and taking away his rights as a father, because they can't communicate about finances.
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start paying his taxes throughout the year so he won't get hit with fines and penalties for underpayment,
OP never said fees. The problem with business income is you don[t really know how much until the end of the accounting period (year). the summer could be great and the end of the year terrible but payroll must still be met. Cash not flowing out of the business until late in the year is pretty common.
At the end of the day, OP thought she was marrying a rich guy, and found out he was just high income. Maybe there should be an index fund for husbands to spread this risk around and improve performance over a professional matchmaker?
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I'm interested in what people would be saying if it were the husband who had written in saying that his second wife married him knowing he was divorced with three kids but was now complaining about him having financial obligations to them, was panicking about debt and making payments from his accounts without his agreement, was talking about filing taxes separately although it would put up the total amount owed, was secretly putting aside money that could be used to pay debts owed now for her child's college in 15 years' time? Would we be advising him to divorce her?
I'm just saying: we are only getting one side of the story here and even then OP acknowledges that there are communication failures on both sides of this marriage. I'd be wary of saying to someone with a small child that they should be looking at walking away from the marriage and even discussing terminating the father's rights to be a parent to his child (and that child's right to have an involved father), just on the basis of a few posts on an internet forum, when there is an obvious communication problem which has potential solutions. Would people be as trigger happy if it were the father suggesting walking away from the marriage and the child?
If the father came on here and posted his perspective? On how he can't be bothered to pay taxes during the year, so with fees and penalties owes more than his wife makes in a year. Never disclosed to his new wife the total of his debts and obligations. Refused to downsize at all to save money. Bought his kids from the previous marriage expensive gifts for Christmas/birthdays. Ignored his current wife's concerns on said debts and obligations, refused to continue counseling because it was holding him accountable for his action. Bankrolled his kids education but refused to put any money aside for his child from the current marriage because not saving for that is easier than cutting expenses in order to pay off his debt. If the father posted that here? No we probably wouldn't be telling him to leave the marriage. The comments would be more along the line of telling him to make a financial plan with his current wife, start paying his taxes throughout the year so he won't get hit with fines and penalties for underpayment, cut back his life style, restart counseling with his wife.
But he's not the one who wrote here, we can't give him advice, the OP can't make him change. If he won't change on his own, her only course of action, that will provide her with the financial security she wants, is to leave.
Right. The advice would be that he should try to sort things out. Not tell him to get a divorce, or that the adviser in the same position would be getting a divorce and taking away his rights as a father, because they can't communicate about finances.
The difference in the advice is caused by the power the individual has to fix the problem. He is the one causing the problem by not communicating about finances not the OP. If he was writing in we could tell him that's what he needs to do but he didn't so we can't. She can't force him to communicate about finances. She can try again, but we are giving her advice based on what SHE can do. Also, no one was recommending she push to terminate his parental rights (I think you're basing that on one of my comments). The OP was worried about her daughter spending time with whomever her father decided to bring home but not about money, and I suggested seeing if HE would choose to give up parental rights in exchange for not paying a dime. FYI, if he did choose that he's a shitty person who doesn't belong in their lives.
start paying his taxes throughout the year so he won't get hit with fines and penalties for underpayment,
OP never said fees. The problem with business income is you don[t really know how much until the end of the accounting period (year). the summer could be great and the end of the year terrible but payroll must still be met. Cash not flowing out of the business until late in the year is pretty common.
At the end of the day, OP thought she was marrying a rich guy, and found out he was just high income. Maybe there should be an index fund for husbands to spread this risk around and improve performance over a professional matchmaker?
Since the OP mentioned trying to filing separately vs jointly, I assumed it was their personal income tax not taxes on the business. The OP said he hasn't paid any income tax so far this year. If you massively underpay the IRS through out the year, they assess fines and penalties.
Alright, I've posted a lot in this thread, I am going to take a step back.
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OP here.
A lot of good points were raised and I really appreciate using this forum as a sounding board.
I’d like to say first that my husband is a great partner in many ways and a wonderful father, otherwise I never would have considered marrying someone older and with 3 kids. At the moment I’m really weighed down with challenges that we created together and I want to solve, and I forget all the good stuff, and I'm sure that comes out in my writing. Even just as a practical matter, I’d rather parent my daughter with my husband as she’s still very young and demanding and I want his help (and he is very helpful). The financial divorce was an interesting concept to me because I feel like money is what’s straining our relationship and stressing me out. I like the idea of divorcing in secret, selling the house, moving into a rental based on how much we each want to spend, and dividing up the costs related to living expenses and raising her in a way that seems fair to both of us based on our income and goals. It’s not something I’m going to follow through on right now as I don't see him liking that idea and there's still a chance we can figure this out and stay married. The issue seems to be (1) clashing values about how we want to live, work and save; and (2) the fact that under the status quo all of my values are being swallowed by his, which is making me resent him and his older kids. And yes, I know that I made a series of mistakes that got me into this situation and I accept responsibility. I should’ve probed into his finances before we got married and bought, remodeled and furnished a home together (for the first year of our marriage we hadn’t merged bank accounts; it was only after the house was done and furnished and when we finally filed our taxes right at the October 15 extension deadline that I learned he was already a year behind in taxes and we were therefore spending way too much money). I also wrongly assumed that our financial obligations to his children would end up at age 18 and we’d be free to focus on ‘our’ minor child our children because in my family, while my parents paid for the direct costs of college for each of us with money they had saved before college started, we were otherwise on our own financially after high school. He came from humble origins and had no help from his family after high school, so I just assumed that his adult children would not impact our life very much, and I was wrong. From my perspective, from the beginning of my career I knew that I didn’t aspire to be partner and bill my life away, so I started saving about 50% of my salary so that I could still set myself up for a comfortable life, but ‘retire’ by 35 to something less intense and more fulfilling. Now, because I was way too passive in our relationship and didn’t do things like (i) probing into his finances and obligations; (ii) understanding his parenting philosophies with respect to his older children; and (iii) asking for complete transparency starting before we were married, I’m in this situation that doesn’t work for me. We can afford payments on the expensive house, catch up tax payments plus current tax payments, tuition for two kids at $70,000 + schools, child support, shared child expenses with no push back when things seem crazy, his travel costs to see the kids (for example, to watch one adult child play his college sport, each trip costs a minimum of $1200 between air, hotel and car rental), and care for his elderly parent, but only if I (1) keep working at this job indefinitely; (2) don’t save for my daughter to go to college (which, out of everything, is the thing that kills me the most emotionally); and (3) don’t save any more for retirement. One issue with (2) is that my husband is older than me and will be retired when our daughter is in college. I am not willing to do (1), (2) and (3), so just accepting the way things are and throwing everything at taxes so I can enable us to keep living this way doesn’t work. He’s aware of the situation but his priorities are just different right now than mine and that's why it's so hard. I am hoping to figure this out so that we can continue be married and neither of us feel like we’re giving up too much to be together. Anyway, one take away is that I need to be less of a pushover and require that we go to some kind of counseling and stick with it until we have a plan that works.
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Would you feel better if you guys signed a post-nuptial agreement saying that, if you did ever divorce, he would support your kid(s) to the same level he supported the older ones?
He sounds like he actually wants to do that, it's not like his XW is twisting his arm. So maybe you guys could get a lawyer to document this level of child support, college expenses, sports, car, travel, etc so that you know your kid will be abundantly provided for even if you divorce.
Oh, and starting right now, get plenty of life insurance on him on a policy YOU own so that if he dies you and your kid will still have enough. That way no case leaves you personally having to work your kid through college and you can relax about your own retirement plans.
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Chrissy, yes I would feel better. There are only 2 downsides. First, paying for a lawyer to draw up the post-nuptial agreement, and paying for life insurance (I agree these things are worth the cost, but we are literally tapped out right now), and second, what about in the event that he lives and is healthy until old age, but runs out of money to support our daughter in the same way due to the way that we’re living now – how do I enforce said agreement? I could end up working to support him and her. But maybe that should be part of the solution, plus downsizing our current lifestyle.
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Chrissy, yes I would feel better.
I am a bit surprised by your answer. I feel your values would prefer that he just no spend so much money on the older children in the first place. Since that's not happening, I guess an agreement that he would spoil your child together is somewhat helpful. (But stick to your values.)
One problem I see is it seams like the ex wife is well off and the split-parents are caught in the trap of both wanting to give their children everything.
I saw a preliminary version of my friends separation agreement. The one parent wanted the other to agree to pay for a huge list of things including prom dresses, wedding dress, winter clothing, cars and insurance at 16, any out of province(state) school trips. And of course all the usual stuff like health care, braces, activities, university ... They wanted the higher income parent to pay for all of this 100%, not even split based on income. (In my province necessary extra expenses are split based on income about 60:40 in this case.)
This is a middle income family, not professionals, the list of demands was crazy and thankfully was cut drastically before the separation agreement was finalized. (When your child is 3y old what selfish parent is already thinking I will legally make the other parent pay for their wedding dress.)
It sounds like your husband is facing the same type of ex in that she wants a lavish lifestyle for her children. A lifestyle they probably couldn't afford together, never mind apart. Many families just can't afford Ivy league University or cars at 16 and a divorce shouldn't force someone to pay for that lifestyle.
I know another family and the first child wanted to go to school in the US (expensive for us Canadians) they had to say no because they knew they couldn't afford it for all three.
As you mentioned she is always coming back for every penny I would check what your state laws consider necessary expenses, especially after 18. Here it is not black and white and based on family income and history. If you say your husband came from humble beginnings and had to pay his own way he could perhaps use that as an argument for his values stop at $xx dollar figure in terms of helping through University.
You and your husband need to have a good values talk even before a money talk.
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Chrissy, yes I would feel better.
I am a bit surprised by your answer. I feel your values would prefer that he just no spend so much money on the older children in the first place. Since that's not happening, I guess an agreement that he would spoil your child together is somewhat helpful. (But stick to your values.)
One problem I see is it seams like the ex wife is well off and the split-parents are caught in the trap of both wanting to give their children everything.
I saw a preliminary version of my friends separation agreement. The one parent wanted the other to agree to pay for a huge list of things including prom dresses, wedding dress, winter clothing, cars and insurance at 16, any out of province(state) school trips. And of course all the usual stuff like health care, braces, activities, university ... They wanted the higher income parent to pay for all of this 100%, not even split based on income. (In my province necessary extra expenses are split based on income about 60:40 in this case.)
This is a middle income family, not professionals, the list of demands was crazy and thankfully was cut drastically before the separation agreement was finalized. (When your child is 3y old what selfish parent is already thinking I will legally make the other parent pay for their wedding dress.)
It sounds like your husband is facing the same type of ex in that she wants a lavish lifestyle for her children. A lifestyle they probably couldn't afford together, never mind apart. Many families just can't afford Ivy league University or cars at 16 and a divorce shouldn't force someone to pay for that lifestyle.
I know another family and the first child wanted to go to school in the US (expensive for us Canadians) they had to say no because they knew they couldn't afford it for all three.
As you mentioned she is always coming back for every penny I would check what your state laws consider necessary expenses, especially after 18. Here it is not black and white and based on family income and history. If you say your husband came from humble beginnings and had to pay his own way he could perhaps use that as an argument for his values stop at $xx dollar figure in terms of helping through University.
You and your husband need to have a good values talk even before a money talk.
It sounds selfish but there are a lot of divorced parents where the decree is vague stating "as parties agree" and guess what? the other party never agrees because they know it will be taken care of by the other side anyway.
(I didn't have any of this in my decree or anything close so I am not being defensive)
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Is he aware of the hard math of your monthly obligations/bills and income mismatch?
Ask him to rank the college tuition, parental support, and fancy house. "Which are most important to you?" Can he articulate why the house seems to be a dealbreaker? If you can frame it as a financial tradeoff between the biggest "obligations" (which aren't obligations, they are things he is choosing), he might be more willing to sell the house. He can have these things, but not all of them, and not all at once.
Maybe if you have a conversation with your husband, approach it with a sense of curiosity and not judgement or an aim to convince him of your view. WHY does he value these things? Why is it important to him to pay for college, or pay for his parents? Why the house? Why THIS house in particular? Be curious about his inner world and his opinions.
Then later, you can approach him with your concerns. This MUST be an "I feel X when Y happens" conversations. If you open with "You" statements (ie "you never do the dishes" or "you gave johnny money but not susie"), these are often interpreted as accusatory and blaming and the person automatically gets defensive and shuts down (this is human nature). Try to have a calm, exploratory, problem solving conversation around your fears when certain things happen.
"I feel really upset when I look at our budget and realize that these numbers mean I will have to keep working indefinitely to sustain our lifestyle. This is not what I wanted for my life and it really makes me sad and I am mourning that vision of my life. Can we talk about this?"
"I feel really insecure and nervous about our taxes that we owe. It makes me think of how precarious financially we are, and really stresses me out constantly. I wake up every day stressed about this. Can we talk about a plan to help so this isn't so stressful?"
"I feel scared and upset about how I think there will be a difference in how you financially support our daughter compared to John, Steve, and Susie right now. Hear me out... right now, you are working, so you have the money on hand to help with their college, but we are scraping the bottom of the barrel as it is. But for Annie, you won't be working anymore when it is her turn. And you don't want us to save for her college now. How could we possibly give her the same opportunity that you are giving your other children? Have you thought about that? I think about it a lot. What is your plan for her?"
Basically, the root of your problem is miscommunication. Neither of you are good at communicating your values, your goals, your dreams, your wishes, and thus are working against each other. And because he isn't skillful (either), you will need to give him a little grace as you both learn how to talk about these things to reach an understanding of the motivations and needs of each other.
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How long did you date before you married ? Was he newly divorced ?
I once dated a man who was recently divorced and I felt as though his ex wife was the ghost that was always lurking in our relationship. I just think he didn’t know where one relationship ended and another one started.
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I really really really like @Lady SA 's idea. When I read those it would be so hard to be a father and husband and be defensive. They are things that worry you and are not criticisms of his life.
Keep us posted, I hope things work out for you :)
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Thanks to everyone for the advice.
@retiredat58, we dated two years before we were married, and during that time we had separate households and financial lives. He is a successful, high income professional with a great resume and a strong understanding of finance, so I assumed he had his financial life in order (based on my own definition of “order”).
@LadySA and @ginjaninja, I like and appreciate your advice. There’s no question we need to communicate better and work as a team. One thing I keep coming back to, and I recognize this might not be a helpful way to think, but bear with me: if we were to divorce or at least get a ‘financial divorce’ however that may look, we’d have to sell the house, and that would most likely generate enough equity to payoff all our taxes and bring us current, and possibly we’d get back what we both put in as a down payment which was pretty equal and sourced from the sale of each of our previous homes, giving me a down payment for something I can more easily afford. If single, I’d be able to create a budget that allows me to save for retirement, save for college for daughter and still ‘retire’ by 40 instead of 35 which was my original plan (though I’m sure I’d still have some type of employment, just less hours and more enjoyable). If I stay in the status quo which means marriage, expensive house, and all the things he does for his older kids, with no changes on his part, I’m basically working to pay for his first family, because I won’t be able to afford to continue to max out my 401k or save for college for daughter because the cost of servicing the tax debt plus our current expenses will take everything I earn. Even if we were to divorce and decide that zero child support is owed to anyone, I’m financially better off single based on my priorities and goals. As a purely financial matter, there is a disincentive to stay married. I know that marriage is so much more than that (and if there wasn’t so much financial strain, I think we’d be quite happy), but it’s also a financial arrangement, and this one seems to be pretty bad for me. I recognize that it’s hard for him as well to be on the defensive and I try to empathize, but it’s hard when everything is at such a high cost to me. I’m not giving up, but I do get stuck on this line of reasoning.
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Thanks to everyone for the advice.
@retiredat58, we dated two years before we were married, and during that time we had separate households and financial lives. He is a successful, high income professional with a great resume and a strong understanding of finance, so I assumed he had his financial life in order (based on my own definition of “order”).
@LadySA and @ginjaninja, I like and appreciate your advice. There’s no question we need to communicate better and work as a team. One thing I keep coming back to, and I recognize this might not be a helpful way to think, but bear with me: if we were to divorce or at least get a ‘financial divorce’ however that may look, we’d have to sell the house, and that would most likely generate enough equity to payoff all our taxes and bring us current, and possibly we’d get back what we both put in as a down payment which was pretty equal and sourced from the sale of each of our previous homes, giving me a down payment for something I can more easily afford. If single, I’d be able to create a budget that allows me to save for retirement, save for college for daughter and still ‘retire’ by 40 instead of 35 which was my original plan (though I’m sure I’d still have some type of employment, just less hours and more enjoyable). If I stay in the status quo which means marriage, expensive house, and all the things he does for his older kids, with no changes on his part, I’m basically working to pay for his first family, because I won’t be able to afford to continue to max out my 401k or save for college for daughter because the cost of servicing the tax debt plus our current expenses will take everything I earn. Even if we were to divorce and decide that zero child support is owed to anyone, I’m financially better off single based on my priorities and goals. As a purely financial matter, there is a disincentive to stay married. I know that marriage is so much more than that (and if there wasn’t so much financial strain, I think we’d be quite happy), but it’s also a financial arrangement, and this one seems to be pretty bad for me. I recognize that it’s hard for him as well to be on the defensive and I try to empathize, but it’s hard when everything is at such a high cost to me. I’m not giving up, but I do get stuck on this line of reasoning.
You are not happy the way things are. If he is not willing to make changes, talk about things, give you a say in overall financials, consider the financial divorce (but it doesn't sound like he would be ok with that). Sure, marriage is so much more but apparently your marriage is not so much more than you providing financial support for him and his first family based on his actions. I hope you find a good solution for you and your daughter. You and your daughter should come first, at least for you.
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.... One thing I keep coming back to, and I recognize this might not be a helpful way to think, but bear with me: if we were to divorce or at least get a ‘financial divorce’ however that may look, we’d have to sell the house, and that would most likely generate enough equity to payoff all our taxes and bring us current, and possibly we’d get back what we both put in as a down payment which was pretty equal and sourced from the sale of each of our previous homes, giving me a down payment for something I can more easily afford. ...
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I’m not giving up, but I do get stuck on this line of reasoning.
Is there a financial advantage for him to financially divorce you? I do not know how US taxes or Child support work so this is a genuine question.
It clearly benefits you, from what you have said, but if it doesn't benefit him it may not be worth it as a couple.
(I am working on the premise that you still want to be a couple.)
Also, I would be a bit worried about this split looking "fake", especially to the ex-wife. Will you two still have 2 house holds? How will that work, as that sounds expensive.
I feel getting a better "his" "hers" "ours" agreement with him paying any extra tax you are required to pay because you file jointly would be a better decision than a "fake" divorce.
"his" money is for his older children, his debts, his tax, any extra of your tax & any luxuries he wants. "hers" is for your savings, your base "single tax", your daughter's education & any luxuries you want. "Ours" is for your current house-hold expenses, even though he makes more than you, you sound so independent I would probably go 50:50 on this but you could maybe start negotiation with a % based on your income.
Someone could still argue he should also be saving for his daughter's education today. But with his own "hair on fire debt" that should not be on his radar today. He is the man you love and married, you need to give him a few breaks while he gets his past life organised.
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You 2 need to develop a budget that works for both of you. Most people I know wouldn’t be able to send their kids to a private school for college even though everyone is a professional. He makes so much money that owing all that debt is ridiculous. He needs to learn to say no to stuff not in the divorce decree. Spending all that money to watch kids play sports is one of the most ridiculous things considering all the debt. Ugh!
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Thanks to everyone for the advice.
@retiredat58, we dated two years before we were married, and during that time we had separate households and financial lives. He is a successful, high income professional with a great resume and a strong understanding of finance, so I assumed he had his financial life in order (based on my own definition of “order”).
@LadySA and @ginjaninja, I like and appreciate your advice. There’s no question we need to communicate better and work as a team. One thing I keep coming back to, and I recognize this might not be a helpful way to think, but bear with me: if we were to divorce or at least get a ‘financial divorce’ however that may look, we’d have to sell the house, and that would most likely generate enough equity to payoff all our taxes and bring us current, and possibly we’d get back what we both put in as a down payment which was pretty equal and sourced from the sale of each of our previous homes, giving me a down payment for something I can more easily afford. If single, I’d be able to create a budget that allows me to save for retirement, save for college for daughter and still ‘retire’ by 40 instead of 35 which was my original plan (though I’m sure I’d still have some type of employment, just less hours and more enjoyable). If I stay in the status quo which means marriage, expensive house, and all the things he does for his older kids, with no changes on his part, I’m basically working to pay for his first family, because I won’t be able to afford to continue to max out my 401k or save for college for daughter because the cost of servicing the tax debt plus our current expenses will take everything I earn. Even if we were to divorce and decide that zero child support is owed to anyone, I’m financially better off single based on my priorities and goals. As a purely financial matter, there is a disincentive to stay married. I know that marriage is so much more than that (and if there wasn’t so much financial strain, I think we’d be quite happy), but it’s also a financial arrangement, and this one seems to be pretty bad for me. I recognize that it’s hard for him as well to be on the defensive and I try to empathize, but it’s hard when everything is at such a high cost to me. I’m not giving up, but I do get stuck on this line of reasoning.
I agree with a lot of what you are saying ... essentially -- "I need to be able to fund my lifestyle married at least as well as I could when I was single. The house and lifestyle expenses for our immediate family is way too high for me to afford." and "I am worried about my liability for the tax owing - I would like to pay that off ASAP, even if it means selling our home".
I disagree that you are funding his first family's costs. Yeah, money is fungible and all that, but that line of thinking leads to unhappiness and a sheer drop off. Don't go there. Instead, think of ways to get from A (today) to B (your goal) together.
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@LadySA and @ginjaninja, I like and appreciate your advice. There’s no question we need to communicate better and work as a team. One thing I keep coming back to, and I recognize this might not be a helpful way to think, but bear with me: if we were to divorce or at least get a ‘financial divorce’ however that may look, we’d have to sell the house, and that would most likely generate enough equity to payoff all our taxes and bring us current, and possibly we’d get back what we both put in as a down payment which was pretty equal and sourced from the sale of each of our previous homes, giving me a down payment for something I can more easily afford. If single, I’d be able to create a budget that allows me to save for retirement, save for college for daughter and still ‘retire’ by 40 instead of 35 which was my original plan (though I’m sure I’d still have some type of employment, just less hours and more enjoyable). If I stay in the status quo which means marriage, expensive house, and all the things he does for his older kids, with no changes on his part, I’m basically working to pay for his first family, because I won’t be able to afford to continue to max out my 401k or save for college for daughter because the cost of servicing the tax debt plus our current expenses will take everything I earn. Even if we were to divorce and decide that zero child support is owed to anyone, I’m financially better off single based on my priorities and goals. As a purely financial matter, there is a disincentive to stay married. I know that marriage is so much more than that (and if there wasn’t so much financial strain, I think we’d be quite happy), but it’s also a financial arrangement, and this one seems to be pretty bad for me. I recognize that it’s hard for him as well to be on the defensive and I try to empathize, but it’s hard when everything is at such a high cost to me. I’m not giving up, but I do get stuck on this line of reasoning.
But what have you really done in the past to challenge this status quo you mention? Yes, you have discussed this with him, BUT not very effectively. It is entirely unsurprising to me that your marriage is "stuck" because both of you are basically shouting over the other to be heard/understood but neither of you are in a place TO hear. Of course this is a recipe for misery and disappointment and confusion and distrust. From the outside, it seems you are approaching all of this in a way that is destined to fail, and then being disappointed/angry when it inevitably does, and are now strongly considering a hugely disruptive, permanent solution that may not be entirely necessary.
Would it be "easier" to divorce? Sure. If you truly believe that you and your daughter will be better off if you go that route, I would support that. I also don't understand what you mean by a "financial divorce" -- if that means simply having separate finances, then sure, perhaps that would work well for your relationship. Perhaps separating finances is the first step you need to take before triaging your damaged relationship. Remove the source of the continual hurt and then you can focus on healing without constant setbacks and recurring hurts that reopen wounds. You can stop depositing your paychecks into the joint account, and set your savings allocation for your income however you wish. However, the house IS a shared asset and you would need to work WITH him if you want to do anything with it. Forcing his hand to sell when he isn't on board will only poison and irreparably harm your relationship.
But anyway, for the relationship piece, I strongly suggest just trying to curiously learn to hear him and hear his dreams and wishes and fears to understand his motivations for why he is behaving this way, and then just digesting and absorbing the things you learned from him. And then learning to express your own fears constructively so he is much more likely to hear you, as well. It is all about tailoring your message to your audience, and your past experiences clearly show that you need to approach your husband obliquely and gently with a focus on problem solving your fears, and without a single whiff of "taking away" things that matter to him. THIS is why you must understand his motivations first, so you can better understand how to be heard by him and identify/avoid stepping on landmines. Then you can gently diffuse the landmines.
And I know it is galling to know that you are listening to him and his needs and he is completely oblivious and won't listen to yours. I get it. But know that this is just the first step in ultimately getting what you want.
"Every villain thinks they are the good guy" --> that means that every person is actually entirely logical and reasonable in their own reality. There ARE reasons that he thinks are very valid behind what he's doing, even if you can't see, understand or agree with the reasons. But only after you listen and understand his reasons, judgement-free, will you be able to do any work to gently problem solve to accomplish his "reasons" in a different way that works with your needs (that he can now listen to because he isn't experiencing your expression of your needs as a threat/attack on his needs) as well. Finances are always tricky because money is a stand-in for "values". You/he spend money in ways that express what you/he value. So if he is latching onto money as a way to express his caring to his children and his parents, you can help him learn to see if there are other ways he can express caring and nurturing to the people he loves. If he is using money to alleviate guilt, there are other ways to create a good relationship with his children or parents. If the house is a symbol that he cares about, perhaps there are other ways you can meet this need. But you need to simply ask. Then listen and probe curiously. Then later, explain your feelings around those same situations and ask for his help. All calmly, with constant redirects back to problem-solving mindsets if things start going off the rails.
If all that seems to be too much work, or you try a few times and get dismissed/ridiculed, then ok. Maybe divorce is the best option. But if it were me, with a small child, and besides these financial issues you think you could be happy, I would want to pursue all my options to fix this before going somewhere you can't turn back from.
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I'm just catching up on all this.
We have a blended family. 2 kids from his side, and one young one together.
What I can tell you is, that in your situation, there are 2 adults taking care of 3 almost adult children. You have only yourself (so it seems) taking care of a young minor (your child). I would make my child my number 1 financial priority considering that your spouse has already provided 18+ years of support to the others. Have you gone back to court and re-established financial support since having a child? In some states, having a "new" family is reason to have child support re-adjusted. I would also argue that paying for 3+ kids of private college tuition when your debt is spiraling out of control is a hardship; a judge may re-rule if you can show financial hardship at the support levels required.
Now before people hate on me, I do believe he should still support his other kids financially in a way that is fair. But I also see many years (how old is your child?) of financial delinquency effecting the minor in the household.
We have always had discussions about supporting (financially from our joint accounts) his other kids. He discusses with me when he helps his adult kids and while I tend to let him make decisions, he certainly considers my opinion. There have been times I have put my foot down (his kids tend to be manipulative about money and also lie, long story). He respects my opinion and does the best he can.
If I were in your situation, there would be NO ipads/phones/gifts of any kind to the adult children until my financial debts were paid off. The conversation would go something like this: "Kids, I'm sorry but due to all the financial obligations there will be no gifts for Xmas this year. We'd love to have you over for dinner and family time instead." The idea that you are financially gutted while he's buying them skis??!!! No. Just No.
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Have you checked into the validity of a court ordered child support that extends into his children's adulthood?
I got divorced two years ago, and I had offered to contribute to my daughters college fund, but was told by my lawyer, that they couldn't "require" me to fund their college.
Why?
Well, what I was told was that a court can't order a non-divorced parent to fund their children's college, so they can't order a divorced parent. She explained it to me like it was established law. But, I have no idea.
I live in a weird state that doesn't count adults until their 19. So, my daughters will turn 18 half way through their senior year of highschool. Potentially enlist in the army or move off to college, but I still get to pay their mom child support. Why? I dunno, is just the law.
sigh.
Regardless, it sounds like your husband's ex is acting punitively. I hate that for you. And him. I have a similar situation and we have worked long and hard at establishing a boundary between us and her. She shouldn't be allowed to control your life to the extent you've described. It's not right. My bitter exwife recently told me that I wasn't allowed to use the school busses and that I would be required to carry my daughters directly to school. How does she get daughters to school? Busses! Why difference?
I don't know why she acts like that, but is important to remind her that she can't control you like that.
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Have you checked into the validity of a court ordered child support that extends into his children's adulthood?
I got divorced two years ago, and I had offered to contribute to my daughters college fund, but was told by my lawyer, that they couldn't "require" me to fund their college.
Why?
Well, what I was told was that a court can't order a non-divorced parent to fund their children's college, so they can't order a divorced parent. She explained it to me like it was established law. But, I have no idea.
I live in a weird state that doesn't count adults until their 19. So, my daughters will turn 18 half way through their senior year of highschool. Potentially enlist in the army or move off to college, but I still get to pay their mom child support. Why? I dunno, is just the law.
sigh.
Regardless, it sounds like your husband's ex is acting punitively. I hate that for you. And him. I have a similar situation and we have worked long and hard at establishing a boundary between us and her. She shouldn't be allowed to control your life to the extent you've described. It's not right. My bitter exwife recently told me that I wasn't allowed to use the school busses and that I would be required to carry my daughters directly to school. How does she get daughters to school? Busses! Why difference?
I don't know why she acts like that, but is important to remind her that she can't control you like that.
This may be state dependent as I do know a couple of people whose custody agreements do extend to college, should the child attend.
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From the OP's posts, whether the college costs are legal in divorce decree or not is irrelevant. Even if it wasn't a requirement, he would still be paying for it just based on the things she posted. The problem is not the ex wife or the divorce decree; the problem is the husband is unwilling to provide any less than what he already is providing above and beyond and he expects OP to be just fine with it.
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This might be an unpopular opinion but you may need to be willing to sacrifice your retirement goals for your family. You are asking your husband to give up alot, where are you going to meet him half way? What sacrifices have you made for the relationship? What sacrifices has he made that you might not be giving him credit for here? 35 or 40 is still a very early retirement, and if you can make it work within your relationship, more power to you! But if you find that the only way to accomplish that goal is sacrifices from your husband, I think you need to look inward a bit more and be willing to accept some of this situation as within your control. If you start making this a war with your husband and not a team sport I doubt it will end in the way you want.
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This one is tough. So often you hear the reverse situation where Family #2 gets all of the attention and money while Family #1 gets scraps. I have to admit it colored my view of the complaints, and I was actually relieved to hear that this guy, irresponsible as he may seem, is trying to fulfill his obligations to his older children. OP-you need to find financial peace for yourself, and please don't resent the other kids to the point where you are complaining about the money spent to go see the older son's sporting event. That's just petty.
It sounds like your child is lucky to have you, and you can support yourself no matter what happens.
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It seems like you two need to sit down and make a budget.
Talk about your dreams for the future. What kind of lifestyle do you want when you retire together? What ages do you plan to be when you retire? Are you working toward that goal? Can you get there financially together?
Seeing the large amounts of money that is flying out the door might be just the wake up call he needs.
Can you try the Dave Ramsey Total Money Makeover?
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Sorry Wex but I would definitely be resentful of all the money to fly to attend sporting events and all the electronics, etc when they are seriously in debt.
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Sorry Wex but I would definitely be resentful of all the money to fly to attend sporting events and all the electronics, etc when they are seriously in debt.
I agree. And she is not talking about a baseball game sign up fee for a $100 every semester for a little kid. These are grown adults and flights across the country. So there is nothing petty about not being on board when they have huge tax bills they are struggling to pay.
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It seems like there are quite a few issues here:
1. His guilt over the impact of the divorce on his older children, which led to maintaining (or increasing?) his spending on them
2. Your resentment of a delayed retirement and a fear that your child won't be sufficiently provided for, which led to a resentment over spending on his older children
3. Your disparate financial approaches: You as MMM-er and him as standard spendy consumer, compounded by your respective disparate salaries
4. The upscaling of your lifestyle (buying a big house)
5. The lack of communication over money (you squirreling away 529 money/not asking further about what appeared to be a wealthy lifestyle pre-marriage and him spending lavishly on his older children/not sharing the tax debt pre-marriage)
+1 to Lady SA, who already articulated my thoughts on your relationship and communication challenges, suggesting you focus on listening. Take a moment to reread that post and really think about it.
Ultimately, you need to decide whether you love him and want to work hard to improve your marriage. Assuming the latter, here are some thoughts on how to get there:
I see you responding with kneejerk reactions to things without fully thinking through what is best. This sometimes results in costing your family more in the long-run. E.g. extra saving for 2019 taxes rather than paying 2018 taxes first. Saving for 529 rather than paying off debt first. (Note: Due to tax breaks it's possible some 529 savings is the prudent choice, but as you haven't mentioned this, it seems that you haven't done these calculations.) Agreeing to buy a big house without understanding the full financial impact on this. Wanting to file taxes separately. I encourage you to stop and really think things through before you take any action.
I encourage you to read postings here about how to bring your spouse to the mustachian way of life. These may provide some helpful blueprints to communicating (#5) over your disparate financial approaches (#3) and getting on the same page with your future goals. That in turn might lead to a downscaling of your lifestyle (#4), less guilt-related children spending (#1), and finally resulting in reduced resentment on your part (#2). But understand that this is a slow process that won't happen overnight.
In the meantime, try to not think of the doom and gloom worst case future that the spending will continue post college with substantial cash infusions. That may happen, but it's not guaranteed like the college spending, so don't get so paralyzed with fear you can't communicate effectively with him (or take actions as I described above to cut off your nose to spite your face).
Finally, try to remember why you fell in love with him in the first place and see if you can at least see the positive in his actions, such as wanting what is best for his kids (even if you disagree on what is best). That can help you to find some compromises, for example, by delaying saving in the 529 now, while you are paying for several college educations. Although it may not feel like it, you DO have time to save here. (I find it hard to believe the man as you've described it would not also want to provide your child with a good education, even if it means working longer than he initially planned.)
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Sorry Wex but I would definitely be resentful of all the money to fly to attend sporting events and all the electronics, etc when they are seriously in debt.
I agree. And she is not talking about a baseball game sign up fee for a $100 every semester for a little kid. These are grown adults and flights across the country. So there is nothing petty about not being on board when they have huge tax bills they are struggling to pay.
You make good points, but I just think that I'd start the expense cutting at the giant house first before I cut things like seeing the older kids. Electronic and presents-sure, those should be gone. But time is different, and I think that opening the discussion about being unhappy about a trip that could be very special to Kid, Version 1.0, isn't the right way to approach it. I'm also getting a big guilt vibe from the whole situation. I think the approach could be-let's prioritize setting aside money to see your older kids and spend time with them within our budget in an affordable way. Maybe don't treat all his friends to dinner, maybe use points, maybe drive instead of fly. There are ways to spend time with people without spending a lot of money. BUT, I'd caution against framing the trip itself being the problem.
OP-you mentioned that selling the house would be a huge benefit. You don't seem all that attached to it. I think you have your answer.
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OP-you mentioned that selling the house would be a huge benefit. You don't seem all that attached to it. I think you have your answer.
If her husband is attached to the house, and the perceived status it brings, unfortunately it is not so simple. One more thing to be brought up with sensitivity to the husband's perceptions, discussed and if possible agreed between the two of them.
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Lady SA – thank you for your words. I’ve read them many times and will keep reading them. They resonate and I appreciate your time on this.
From this post I’ve already (1) stopped making any extra 2019 tax payments from my paychecks so I can divert them to 2018; and (2) cut back my 401k to the amount of my employer match (for the first time in 10 years). I’m really really struggling with turning off 529 contributions for my daughter. That kills me.
I’ll spend more time studying about how to bring my spouse to the mustachian way. And I'll approach future communication with more sensitivity.
Selling the house is the obvious answer for me. I’m not attached to it, and it would make all the tax liability go away and allow us to create a monthly budget that works. It’s a solution that doesn’t require him to cut back spending on his older kids very much. Would he sell the house if I gave him an ultimatum? Yes, I believe so. But from his perspective, it is not necessary because the 2018 tax liability is only a small fraction of his retirement account (which was funded prior to our marriage, so it’s his account not “ours” and I’m sensitive to that fact) and not a crazy fraction of his gross annual income. From my perspective, the 2018 tax liability is a much larger fraction of my retirement account and over 145% of my annual gross income, and soon that will be compounded by penalties and interest, and then there’s the 2019 taxes that we can’t address for some time. And I’ve already been down this road in previous years.
@ Ginjaninja - You’re right about early retirement. It is a luxury and I’ll most likely have to give that up in order to stay married. I’ve already given up the little luxuries and creature comforts I used to allow myself, and if I stop saving for retirement and for college for my daughter, but he continues to be a big spender on things that matter more to him than me, and support his older kids at the current rate, then I feel like a martyr and it gets in the way of the good feelings I have toward him. I admit this isn’t a helpful way to think about things, but I’m human.
@ Wexler, I see your point and before this marriage I tried to approach challenges by focusing on what I can control and leave the rest to be. But marriage is a community and we bind each other by our actions. Sometimes it feels like the only answer that is within my control is to ask for a divorce, and like you said, focus on my own peace and taking care of my daughter. That’s the last resort, though. Maybe our problem is more about communication than anything, and maybe if I learn how to communicate better, I can help us both. Or maybe I am just too petty and selfish to withstand being married to someone with three older kids; that thought has crossed my mind many times. I’m not sure I really like the person I’ve become here.
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It is painful to hear you talking about giving up your little luxuries while he spends on what he wants. It reminds me too much of the years I was married, when my husband spent $400 on new jackets for himself one winter while I was sewing patches onto the kids' sweatpants. Obviously, our position was very different... I just don't see how making yourself even smaller to throw even more of yourself at your husband's debts is a long-term path to happiness when he is not matching your efforts.
What is he sacrificing to pay off his tax debt? What changes has he made since your marriage to accommodate the expense of his new family? He doesn't have to be full Mustachian. He just needs to live in the real world.
Ann Landers used to tell women to ask, "Are you better off with him or without him?"
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Have you suggested meeting with a financial planner so you can get everything out on the table? I think a forced conversation about the big picture and what your goals are could be very helpful.
I might have missed it already, but did you say you tried counseling but he wasn’t willing to participate? If I am wrong there, that is something I would love high up the priority list. For you alone also if he won’t go with you.
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It is painful to hear you talking about giving up your little luxuries while he spends on what he wants. It reminds me too much of the years I was married, when my husband spent $400 on new jackets for himself one winter while I was sewing patches onto the kids' sweatpants. Obviously, our position was very different... I just don't see how making yourself even smaller to throw even more of yourself at your husband's debts is a long-term path to happiness when he is not matching your efforts.
Yeah, this is kind of how I see it. You say the financial stuff is the problem, and otherwise you are quite happy together. But when you write it out, what I hear is, "My husband doesn't take my needs and desires as seriously as his own." Which is, to me, a prerequisite of a functional marriage.
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I am confused with all the references to 2018 and2019 tax obligations.Does he not understand that you only get to spend your AFTER tax income?
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I'm trying to imagine how I would feel as a child with a father who makes a huge income and then married a woman who convinced him to stop spending lavishly on me in the way he has most of my life. I think I wouldn't feel great about it.
Even though it doesn't match MY values, I absolutely understand why your husband wants to keep supporting his children in the way they are accustomed to and that would have continued if there hadn't been a divorce. He would have paid full freight to college if there hadn't been a divorce. He would have bought new iPhones for the children if there hadn't been a divorce. He would have paid for lavish weddings if there hadn't been a divorce. It is clear he still wants to do those things.
And this puts you in a difficult position, because YOU don't want him to do those things. You clearly resent his financial obligations to his family, which are not going to go away. You clearly had a different financial plan for your life, and somehow, in discussions of marriage, how your finances would work jointly didn't come up? You are both responsible for that lack of communication, and the consequences of that lack of communication.
I think a lot of the responsibility here is on you, just as much as him. Sure, he's not responsible with money, but he never claimed to be. You on the other hand, don't seem to have disclosed that you want to retire at 35. You both made assumptions, and now it's up to you if you want to live with those assumptions or divorce. I think you already know the answer.
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I'm trying to imagine how I would feel as a child with a father who makes a huge income and then married a woman who convinced him to stop spending lavishly on me in the way he has most of my life. I think I wouldn't feel great about it.
Even though it doesn't match MY values, I absolutely understand why your husband wants to keep supporting his children in the way they are accustomed to and that would have continued if there hadn't been a divorce. He would have paid full freight to college if there hadn't been a divorce. He would have bought new iPhones for the children if there hadn't been a divorce. He would have paid for lavish weddings if there hadn't been a divorce. It is clear he still wants to do those things.
And this puts you in a difficult position, because YOU don't want him to do those things. You clearly resent his financial obligations to his family, which are not going to go away. You clearly had a different financial plan for your life, and somehow, in discussions of marriage, how your finances would work jointly didn't come up? You are both responsible for that lack of communication, and the consequences of that lack of communication.
I think a lot of the responsibility here is on you, just as much as him. Sure, he's not responsible with money, but he never claimed to be. You on the other hand, don't seem to have disclosed that you want to retire at 35. You both made assumptions, and now it's up to you if you want to live with those assumptions or divorce. I think you already know the answer.
Well it sounds like then it would be time for those kids to get a dose of reality and to learn that NO is a perfectly valid answer in life. Sorry kids, no expensive gifts this year, I have a six figure tax bill to pay off. However, I pay your mother X in child support, so that should cover it if you really want it.
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I'm trying to imagine how I would feel as a child with a father who makes a huge income and then married a woman who convinced him to stop spending lavishly on me in the way he has most of my life. I think I wouldn't feel great about it.
Even though it doesn't match MY values, I absolutely understand why your husband wants to keep supporting his children in the way they are accustomed to and that would have continued if there hadn't been a divorce. He would have paid full freight to college if there hadn't been a divorce. He would have bought new iPhones for the children if there hadn't been a divorce. He would have paid for lavish weddings if there hadn't been a divorce. It is clear he still wants to do those things.
And this puts you in a difficult position, because YOU don't want him to do those things. You clearly resent his financial obligations to his family, which are not going to go away. You clearly had a different financial plan for your life, and somehow, in discussions of marriage, how your finances would work jointly didn't come up? You are both responsible for that lack of communication, and the consequences of that lack of communication.
I think a lot of the responsibility here is on you, just as much as him. Sure, he's not responsible with money, but he never claimed to be. You on the other hand, don't seem to have disclosed that you want to retire at 35. You both made assumptions, and now it's up to you if you want to live with those assumptions or divorce. I think you already know the answer.
I disagree. I would feel terrible as an adult child, knowing that my father was in a tremendous amount of debt & in WAY over his head financially, and spending irresponsibly on me. Particularly when he has another child. If nothing else, I'd think about my father & love him enough to want him to have a healthy & viable financial future. Anything less than this is selfish & really quite sad perspective on overall values. We discuss finances with our kids all the time & I'd expect a lot more maturity from them.
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@ simplecycle - Does the following change your opinion -
The financial issue that keeps me up at night right now is not giving up on early retirement, which is already a foregone conclusion at this point, it is that we have a past due tax bill to the IRS that is 145% of my gross annual income. His spending on his older children (2 adults and one minor) is an issue since, after taxes, it is by far our largest economic output right now, far greater than our mortgage. I see your point about the older kids, but while we failed at communicating about money, we talked at great length about having a child together as I would not have dated and then married him if he was done with kids after his first marriage.
As far as the older kid spending issue, I feel like I need to defend myself a bit so bear with me and let me know if you still think I’m wrong here. Between the house and spending on the older kids, he’s currently spending more than he could have if he were single (meaning, a good portion of my income is supporting this situation), and he’s spending way more on housing and his older kids than he could if we were to get divorced, as I think you might be suggesting that I consider. We’d have to sell the house to pay off the tax debt (gigantic weight off of me). I’m guessing he would be required to help support our mutual minor child at some level, even if it were just share the costs of things like a nanny/day care (we both work long hours) and healthcare 50/50, and there’s no way he could afford to help with her, live the lifestyle that we’re living now, and spend lavishly on his adult children, so I don’t think it’s fair to say that he should be able to keep spending as he is. Our budget has to make room for (1) getting out of debt to the IRS so it stops compounding and I can breathe again; (2) meeting his court ordered child support obligations for the teenager; (3) staying current on our mortgage for now (and seriously considering selling the house and downsizing to help with the debt issue); (4) saving for retirement; and (5) paying for college for the older kids and saving at least something for college for our child, because he’s kind of old and will be retired on a lesser income than he has now when she’s in college, so we can’t just save nothing. Is that a reasonable way of thinking about it, taking into consideration all the people involved here?
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It sounds like there is no downside to selling the house at this point...except you have to find another place to live. It sounds like selling the house (and you getting your share of your money back) would ameliorate a lot of your angst as well as improve his financial situation. Why not do that and then see where things stand?
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It sounds like there is no downside to selling the house at this point...except you have to find another place to live. It sounds like selling the house (and you getting your share of your money back) would ameliorate a lot of your angst as well as improve his financial situation. Why not do that and then see where things stand?
The downside is her husband's view of the matter.
I don't think this is a case for OP prescribing the solution - that hasn't worked for her so far. I do think OP's most recent posts are doing a better job of explaining the situation and exploring solutions than her first posts, which is good. I think what might be a good approach would be something along the lines of
1. How does DH feel about the tax debt? We know how OP feels, does she know how DH feels about it? That seems to be the immediate issue. How much extra will this overdue tax from 2018 and 2019 cost by the time it is all paid? Is DH aware of that, and how does he feel about it?
2. DH has a great income but is spending even more than he earns. What does he think about that? How many more years of spending more than he earns does he think is sustainable?
3. If DH were to limit his spending to his earnings, what would his priorities be for how his spends his money?
4. OP's approach to DH could then be: you know I've been worried about our family finances. I can't control how you spend your money, only you can do that, and I'm not going to try any more. But I do need to know that you know how your finances are working: what's coming in and what's going out, and that the choices you are making about spending are fully considered and look to our future together with our daughter. Over to you to now tell me how you feel about that.
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<snip> (5) paying for college for the older kids and saving at least something for college for our child, because he’s kind of old and will be retired on a lesser income than he has now when she’s in college, so we can’t just save nothing. Is that a reasonable way of thinking about it, taking into consideration all the people involved here?
Let me preface this by saying that unlike most on this board, I believe you get value out of attending a top college and support providing a substantial portion of the costs of that for my kid. I say this from a place of having already saved a lot for my kid who is 2. So I completely get the strong desire to want to provide a good education for the child, but....I think your extreme focus on the need for 529 savings has blinded you to any form of compromise with your husband.
Look, I agree he kinda f*cked up by not saving for the kids college all along and planning to cash flow it. But you can't go back and fix that. From this point, the priority is to pay the current support order, the college cost and plan for the upcoming college costs. As a family you really don't seem to have the resources to also save for your child, who is really young right now. (Did you say 1?) So if the youngest is in high school, you have 7 years or less when this burden will be done. That means you have 10 more after that to save for your child's education. EVEN IF he retires in 10 years, that still leaves 3 years of his working career to save for your child's education.
Here another way to think about it: Do you want to be right? Or do you want to win (changes)? It seems to me that you are focusing on what is right, using language such as it's not fair that he does XYZ. By angling for "everything" that is not fair/right, it seems you have ended up where neither of you is happy or willing to compromise, with no changes at all. I think you will be more apt to come to a place where you are happier if you instead think critically about how to realistically effect change in your lives. I would suggest you start by: 1) working on improving your communication and 2) narrowing down your list of must haves to the most critical ones.
You want him to make all of the changes and that hasn't worked so far in your conversations. (I appreciate that from your perspective you have already made a lot of changes to pay down the tax debt, but you've also done things such as upscale your life by agreeing to a big home you can't afford right now. You need to start from status quo now though, not status quo a year or two ago.) I repeat again: Do you want to stay married? If yes, then you need to figure out how to communicate and what you can and cannot compromise on. What are your priorities? Figure out those and your non-negotiables, and then you can make a plan. If everything you've described is non-negotiable, then be prepared for divorce as a possible outcome.
I get SimpleCycles point, that by making major changes now you can damage your/his relationships with his kids. That's not to say that they *should* be reliant on these gifts, or that they shouldn't want the best for their father, including healthy finances. But let's be realistic: These kids have not had good financial role models and clearly have not had anyone telling them no. Changes will come as a shock and will be more successful if implemented and messaged to them thoughtfully - with full buy in from both you and your husband. If you plan to be around long-term in their lives, then this is something to think about.
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@ simplecycle - Does the following change your opinion -
The financial issue that keeps me up at night right now is ... that we have a past due tax bill to the IRS that is 145% of my gross annual income.
We’d have to sell the house to pay off the tax debt (gigantic weight off of me).
Our budget has to make room for (1) getting out of debt to the IRS so it stops compounding and I can breathe again; (2) meeting his court ordered child support obligations for the teenager; (3) staying current on our mortgage for now (and seriously considering selling the house and downsizing to help with the debt issue); (4) saving for retirement; and (5) paying for college for the older kids and saving at least something for college for our child.
How sure are you that selling the house will solve all of your problems? You will still need a place to live, so after selling this one you will likely need another one. And you've probably priced this out with a house that YOU would be ok in, smaller and in a less prestigious neighborhood. But you have a partner with his own needs and wants, so how likely is it that he would be ok with that smaller house that you based solely on your own needs?
So, how much money would you actually net after the sale and purchase of another living space (that meets both of your needs)? Would it ACTUALLY wipe out your tax bill? Or would selling this house, compromising and getting a house that *neither* of you like, and STILL having a outstanding tax bill, just make things even worse?
Homework for you and report back:
1. Find out where your husband truly stands on the house.
This is not a conversation that you abandon after 5 mins... probe and ask questions and spend a good 45 mins or an hour. Keep approaching it from different angles (if he is taking the conversation well of course), and maybe come back again later to clarify things after you've digested what he says if you work better with taking some time to process things. The GOAL of this conversation is to explore and both of you agree on the possibility of an acceptable compromise on the house. Which means if you can get guide him to disconnect *THIS* house in particular from what he needs, that leads to the possibility of meeting his housing needs with an alternative. Just kind of go with your gut and let the conversation evolve naturally, I put a few potential ideas for questions:
"Hey DH, can I ask you a question? I know you are really attached to this house, and moving is something you aren't interested in, and in the past if I suggested moving you were not interested. That tells me that I am not understanding what is important to you and I'd like to learn. Can you tell me what this house in particular means to you? What does it give you?"
"Hypothetically, what about moving to a different house upsets you? I've noticed before that you seem upset if I ever bring up the possibility of moving. I don't want to make you upset so I want to know what about this house is better than others."
"It seems that moving houses seems to be a dealbreaker for you. I'm just curious why. What about this house in particular is so important? I think I just don't understand your needs and I would like to."
"What types of things you you care about in a home? I really care about lots of sunlight and a nice kitchen with a good layout. How about you?"
"What if you could have most of the things you care about in a different home?"
"Sometimes I get kind of worried about how expensive this house is. Does that ever bother you? Why/Why not?"
"What kinds of things about a neighborhood are important to you?"
"How do you see us growing into this house in the next 5 years? 10 years? 20 years?" (asking questions about how he envisions the future are especially revealing and help you understand his thought process/plan!)
Maybe he is reluctant to go through the stress of moving again. Maybe he is best friends with the neighbor. Maybe this house has the perfect arrangement of rooms that he really, really likes. Maybe it was his dream from childhood to live in this particular neighborhood. Maybe he just feels that he has roots here in this house and feels comfortable there, and leaving is very disruptive. You just don't know, so find out.
2. On another day, talk to him about the tax bill and how stressed out by it you are.
The first requirement for this conversation is that he empathize with your feeling and get into problem solving mode. If he is incapable of focusing on your feelings and instead stonewalls you/disregards you/etc, then he could be a lost cause. But usually, the sentence below is a good opener that encourages empathy and problem solving from the listener.
"I feel really insecure and nervous about our taxes that we owe. It makes me think of how precarious financially we are, and I wake up every day stressed about this. Can we talk about a plan to help so this isn't so stressful?"
"I really need there to be a plan for us to get rid of this bill completely before 2021/2 years (or whatever), that would make me feel a lot better! What can we do to make that happen? Do you have any ideas?"
"How should we tackle this together? I just don't understand what the plan is or what we are doing about it. Do we have a plan? Can we talk about it?"
3. **IF*** after your house conversation, you both agree that there could be some acceptable compromise for both of you on the house AND the move to a different, compromise house would make a "good enough" impact on your tax bill, try to get to the point of connecting the stress about the house to the stress of the tax bill.
"I know I mentioned this before, but what if we sold the house, got another one like we talked about the other day, and then could use the proceeds to pay off a good chunk of the bill? I know it isn't ideal, but I'm really having a hard time and this seems like it could work. What do you think? What are your concerns?"
Now, these conversations may be scary and/or uncomfortable or awkward because you both are not used to talking like this. However, doing so would give you (and us) a LOT more information (on his mindset, ability to compromise and work with you, and his financial plans or lack thereof) for us to work with and help make a plan for you to move forward out of this rut.
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I think Lady SA has a lot of good points, but I think the conversation needs to be backed up a level with your husband. We have all jumped on the house as a problem and partial solution, but really the problem is a lack of shared vision and values over what you two want your lives to look like. I say you should start with a blank page. Then fill in your dreams and hopes for what you would like your end stage to be. Retired? When? Where? What are the kids doing? What do you provide or not for them? When does that end? How do you want to spend your time once neither of you work? Where can you do that?
If you can agree on that vision for the future then you can back out what it will cost to fund that dream. Then you take a look at your entire current financial picture. What are your assets and liabilities? What are your incomes and expenses? How much are you saving (or going into the hole) each month? From there it is an easy calculation to see if and when you will get to that shared future vision you created together.
The biggest red flag for me would be if you cannot have that initial conversation and agree on a shared vision. You are there now and to are two people in a boat rowing in opposite directions. Work hard to get on the same page for what you want to achieve together or you need to find yourself a new boat.
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I think Lady SA has a lot of good points, but I think the conversation needs to be backed up a level with your husband. We have all jumped on the house as a problem and partial solution, but really the problem is a lack of shared vision and values over what you two want your lives to look like. I say you should start with a blank page. Then fill in your dreams and hopes for what you would like your end stage to be. Retired? When? Where? What are the kids doing? What do you provide or not for them? When does that end? How do you want to spend your time once neither of you work? Where can you do that?
If you can agree on that vision for the future then you can back out what it will cost to fund that dream. Then you take a look at your entire current financial picture. What are your assets and liabilities? What are your incomes and expenses? How much are you saving (or going into the hole) each month? From there it is an easy calculation to see if and when you will get to that shared future vision you created together.
The biggest red flag for me would be if you cannot have that initial conversation and agree on a shared vision. You are there now and to are two people in a boat rowing in opposite directions. Work hard to get on the same page for what you want to achieve together or you need to find yourself a new boat.
+10000000000000
Yeah, do this. THEN maybe do my suggestions. Get the foundation right (shared goals and agreed upon vision for the future) and THEN focus on the details. Details being how to handle the house or tax bills or college contributions. But unless you are confident you are both going in the right direction and working together towards the same things, you won't be able to put your trust in his plans for either the house or the tax bill or your daughters college, because he might be going for a different outcome/direction than you are hoping for. You obviously don't currently trust him right now, so going in blind and asking him to make plans based on different goals, and yourself to trust those plans to get what you want could backfire spectacularly.
And if your visions for the future are fundamentally incompatible? Then now you know for sure (instead of just guessing like you are doing now) and you don't have to waste time and effort trying to align your opposite goals and plans.
Good catch, Ysette. This is definitely the better approach.
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@Lady SA - The house has enough equity tied up in it to pay all of the tax debt, and most likely enough to provide a down payment on a smaller but adequate home. I recognize that could change at any time in a down market. The only way we can get to the equity is by selling the house, because the mortgage and HELOC are only in my name because I have a much better credit score than him, and I’m already at the maximum debt to income level that any lender would allow. So selling the house would benefit us mainly by freeing up equity. If we rent or downsize to an average size single family home, we’d probably also save $2000 a month on housing, plus we’d be current on our taxes which would free up some extra money. He’s not tied to this home as a forever home, but he’s embarrassed by the idea of downsizing. Our issue is not impending insolvency, but illiquidity, from his perspective. If anything, he’d like to move to an even more expensive home within the next 5-10 years. I’ve found that I don’t have the risk tolerance necessary to live in this way, as I can’t help but think about everything that could go wrong. I suppose one question I have to ask myself is how long should I let this go before I decide that it has spiraled out of control? Or is that just the ramblings of an anxious person? Also, I keep going back to the house because that’s a solution that I can offer without offending him, but our entire housing costs are not that high as a percentage of our spending - currently 12% of our gross income not including some credit card debt related to remodeling and furnishing the house at an amount that hasn't been disclosed to me even though I have asked.
@ysette9 We definitely need a shared vision. Of course we've talked about it in a roundabout way, but due to many factors, I would say that some of our individual desires and goals clash in a way that is hard to resolve without someone playing the martyr.
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We definitely need a shared vision. Of course we've talked about it in a roundabout way, but due to many factors, I would say that some of our individual desires and goals clash in a way that is hard to resolve without someone playing the martyr.
That's just not going to work long term. Eventually the resentment will build up to the point one of you leaves the relationship. You're very close to that already, which is why you're so hyper focused on details. If you can't get to a good place of sharing at least some common aspects of a long term vision on your own, you need counseling.
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some credit card debt related to remodeling and furnishing the house at an amount that hasn't been disclosed to me even though I have asked.
I would say that some of our individual desires and goals clash in a way that is hard to resolve without someone playing the martyr.
Yikes. With this information, and some of the other issues you've mentioned in the thread, it's totally understandable why his exwife divorced him. I was hoping he wasn't entirely a lost cause and he was just bad at communicating and you two were just missing key pieces of information and could come together, but to refuse to share financial information even when asked point blank about it is just straight up financial infidelity.
I'm sorry OP. The way this has played out, there is no way to win with his bad habits and I see why you are so exhausted by this.
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If your housing expenses are only 12% the major bleeding is likely elsewhere.
Without sharing actually numbers it might be helpful to share income % and expenses.
For example:
Income
His 80%
Hers 20%
Total 100%
Expenses
Housing 12%
Renovation debt xx% UNKNOWN, you need his honesty.
Food xx%
His car %
Her car %
...
...
2018 tax liability xx%
2019 tax liability xx%
Child support xx%
Older children University xx%
Older kids gifts xx%
Baby 529 xx% (be honest)
His savings 0% (I imagine)
Her savings xx%
Sub total expenses
His
Hers
Ours
Total expenses xxx% (I’m afraid this is over 100)
Hopefully this detail will help some of the smart folks here help you more.
You can present the same table to your husband with % and actual $ numbers.
I mentioned earlier you sharing your household expenses 50:50, but what is your family philosophy on this? Some believe it should be based on income ratio.
Maybe if he sees in clear numbers that you are responsible for more than your income he will understand where your anxiety comes from.
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We definitely need a shared vision. Of course we've talked about it in a roundabout way, but due to many factors, I would say that some of our individual desires and goals clash in a way that is hard to resolve without someone playing the martyr.
That's just not going to work long term. Eventually the resentment will build up to the point one of you leaves the relationship. You're very close to that already, which is why you're so hyper focused on details. If you can't get to a good place of sharing at least some common aspects of a long term vision on your own, you need counseling.
Agreed on the counseling bit.
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Okay, trying not to over disclose to the internet, but maybe this provides some color.
Our “income” is my income after withholdings for 2019 at our effective rate and 401k contribution up to employer match + his income before withholdings (we make quarterly estimated payments on his income).
His income: 75%
Her income: 25%
Mortgage/utilities/repairs: 12%
Renovation debt: unknown
Groceries: 2%
His car: 1%
Her car: 0 (I paid cash)
2018 tax liability: currently allocating 42% (our effective rate is pretty high so we’re not allocating a crazy amount currently)
2019 tax liability: 0%
Child support: 15% (going down in 3 months, possibly by quite a bit)
Shared child expenses (goes into a shared account with his ex wife): 8%
Tuition (after using existing 529 plan, tuition is split 50/50 with ex wife): About 7% this year, but more next year.
Our additional spending on his kids and his travel related to his kids: ~5%
Support of his elderly parent: 2%
Baby 529 contribution at the moment (I’m hearing I need to stop): 2%
His savings: Variable. Not insignificant due to required contributions to his business.
Her savings outside of 401k and baby 529: 0
Child care for baby so we both can work: 6%
Our entertainment/travel expenses/hobbies/clothes, basically all things discretionary: ~ 5% (obviously cutting down on this already)
Not included in our income: bonuses (highly variable), and I also have a rental property that I purchased long before we married as a part of my early retirement plan. It has a separate bank account. I’m currently allocating 100% of the net cash flow to taxes, which helps in a small way.
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I apologize if this has already been answered, but what's up with the taxes? Did he not pay his estimates in 2018? Does he expect to live on his gross pay and not his net? From both your budget and the things you have said, the taxes are a bigger problem than the first family.
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If you could clear the 2018 tax liability & pay the 2019 (& future taxes) at the expected/estimated rate, what percentage would taxes make up? That would be helpful to understand commitments, in addition to making up the 2018 back taxes.
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OK. Little quibble but by my math your percentages add up to 107% But assuming this is just back of the envelope estimating anyway here's what I observe:
If I split shared items by 1/2 (housing, childcare, food, etc.) and allocate sole expenditures for his obligations (child support, college, shared account) I get that 50.5% of your total spending is going to meet his current needs and financial obligations. BUT that doesn't include the additional 42% in back taxes OR what liability is being incurred by not paying current taxes. So 92.5% of your spending is going towards his "side" (out of 107% recall). So even adjusting for the calculation error to start, this suggests that your salary not only supports the choices he's making/obligations he is fulfilling in spending, but also that you may have a looming hair-on-fire situation given that the current tax liability and renovation debt isn't accounted for here.
This alarms me. Also, I am alarmed that you had to use your credit to purchase your home in your name only. Why is his credit not good? Business owners can use the "liquidity" argument to convince themselves that they are wealthier than they actually are. Is it possible that is what your husband is doing?
I think Lady SA has the right idea when it comes how to emotionally approach this from a relationship standpoint. But I'm a little afraid of what you're going to find once you start to scratch the surface of this and both start coming clean about hidden savings/spending. I'm a rip the bandaid off quickly kind of person. Maybe once you get communication lines open, it would be good to sit down with a stack of bills/statements/etc. and do the math sooner rather than later.
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A house that is costing 12% of your (net? gross?) income is not the essence of your problem. Nor are older child expenses at 8% (which is about the same as goes to your own child, counting child care) or elder parent care at 2%.
So do those figures mean that once the 2018 and 2019 taxes are sorted and you have arrangements in place to pay future taxes on time you should have plenty of money to cover everything you want? How long will it be before the tax position is on a sound basis?
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I mean I don't think he should be spending money he doesn't have. My point is all this is understandable from your husband's point of view, even if it's not from your point of view. And that's really important from the perspective of moving forward in the relationship - you have to be able to understand that his point of view makes sense to him, even if you completely disagree.
I suspect a lot of the communication breakdown is due to defensiveness on his part and rigidity/panic on your part. Your panic is completely understandable - this is a huge mess and you don't see a clear way out. But (and I say this as someone with a lot of marriage counseling under my belt) you're going to have to find some common ground if you are going to work through this as a team. And of course you have to decide if it's worth working through as a team. It's absolutely not fair to give up your dreams and your autonomy to dig him out of a huge mess. You will both need to compromise.
So I've done a little math, and I will respect your desire to keep real numbers out of it, but your total debt (2017 HELOC + 2018 tax debt +2019 quarterlies + a fudge factor for the credit card debt) is about 1x your annual gross income. Honestly, I would be talking to a tax lawyer at this point if you haven't already. I think paying your current quarterlies is also a condition of getting an installment agreement, so you have to be current on 2019 to get an IA for 2018. And it's not clear if an installment agreement is the best option.
If you're going to work this out, you're both going to have to lay everything out on the table and figure out what options you have. You are probably right that he'll have to cut back spending, but it's probably better to lead him there than tell him that.
I'm really sorry you are going through this - it sounds like a ton of stress and worry. I think you've gotten very good advice here, but I'll also say don't hesitate to get as many people in your corner as you need - a good therapist, a trusted friend, etc.
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107% is probably on the low end of how this shakes out. I some what arbitrarily picked a number for 2018 tax payments to make each month as soon as his paycheck hits (maybe this is a bad idea but I’m freaking out), and the amount is enough to cover what 2019 payments would be plus what I think penalties and interest will be each month for 2018 plus a small amount more. I’m trying to stop the bleeding for now. But it’s clear that by doing this I’ve set us up for failure as we run out of money each month now.
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Time for OH to pull money from his retirement accounts?
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Err... Why isn't he calculating how much tax + penalties + interest he has to pay himself or hiring an accountant if he can't figure it out on his own? How did he pay his taxes before marrying you?
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Time for OH to pull money from his retirement accounts?
I think its time to actually TALK to her DH.
OP, it has been more than two weeks since you started this thread. I think it is time to sit down and have a heart to heart with your husband about all this - you have all the details you need. More time and more silence is not going to fix this, but the stress of carrying all of this can not be healthy.
This is your gentle nudge to start this ball rolling, so that you can make plans for your future whether with him or without. Either way, you can do this, and you will have all of us in your corner, cheering you along.
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@ Former player that’s an option on the table. I believe an ira withdrawal would be at our highest marginal rate plus 10% - that might still be less expensive than penalties and interest, and it’d help with my mental health. His ira is generously funded so it’s not a crazy solution. I haven’t really pushed for it yet because it’s upsetting for him having already been through an expensive divorce but maybe I should.
@Fuyu he entered the marriage with about $75k owed from the previous year and it keeps growing. He has an accountant but the pattern the last 2 years has been to file an extension while we wait on K-1s, then taxes on October 15, at which point the penalties and interest are already very high. This year I attempted to do them myself based on some assumptions from last year so I could understand how much this costs us per month. We’ll still use the accountant for the actual return and we’ll still file late.
Yes we’re talking about this but it’s not really getting resolved. The solution seems to be to wait a little longer for now. I’ll report back in the future, hopefully with good news. Thanks all.
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Not paying taxes owing...not willing to discuss selling property to pay off debts, has debts and renovation costs that he won't disclose.Aversion to saving for future, prefers to cash flow future costs... Not reserving the money for govt taxes and paying in full every year.. I mean, can't you file on time and pay, and then amend it for less penalty?
Anyhoo... This is quite foreign thinking to my MMM mindset. I honestly don't know what to suggest, only that the excessive spend on kids from first marriage (money pit) happens to a lot of great Dad's out there, he is not unusual in this commitment to his blindspot for them.
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The #1 problem here is the taxes. Those are your biggest expense, and it seems like your husband is avoiding it or pretending it's just like any other bill, which it is not.
The accountant should be advising you on how much to pay for estimated taxes. Is that not happening? If not, and you are, why is your husband not interested in this detail?
Last, your husband got upset (somewhat understandably) when you suggested filing separately because it would increase the total tax paid for the two of you unnecessarily. Why is he ok with paying extra on interest and penalties because of his failure to pay his taxes on time? That, too, is extra money paid for taxes that he is costing your family by not being on top of his responsibilities. Perhaps this argument could help him see why your current tax approach is causing you massive stress. Getting current on the taxes might close your budget, though it's hard to tell even with the new info.
You know all this, though, and have been through at least a round of conflict on the taxes and he was not receptive, which is why you moved on to the house in your head. He seems to have a different view of personal finance, which may be related to the fact your family has significant illiquid wealth in the house, his business partnership, his retirement accounts, and (in is mind) in his future earnings.
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When I see the %, I see 2019 and 2020 as potentially crappy years for you two, but THEN it looks to be amazing. The $amounts are paying the piper for previous years' excess, which sucks in the short term. If the 42% goes away by 2020, you'll have 42% to apply to DD's 529, correct? Or is the tax liability always going to be 25%?
I too struggle with high dollar item choices of my DH, but in general, I reign him in on a day-to-day basis. ;-) The NEXT time you DH gets a bonus, apply 100% to the tax bill. Or make an agreement that the next time he gets a bonus 100% will be applied to the tax bill, and not any rewards for all the kids. Make him promise to tell his older kids that he didn't get any bonus this year (because really he didn't - he overspent his old ones) and you're going to have a reset year. I have a feeling when bonus time comes around for your DH he has already spent it several times over in his mind. Any bonus received at your income levels should be divided by 50%....since about 1/2 goes to takes anyway. A $250K bonus is only $125K to spend. People so often forget this! I'm guessing your DH's bonus is at least enough to pay the tax bill, but that he doesn't want to use that money to do so. The home equity - was it yours or his? I certainly wouldn't want to put my equity into his tax bill when the house was in your name only. It sounds like the expenses are commingled though. In a divorce that would get really complicated.
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Our “income” is my income after withholdings for 2019 at our effective rate and 401k contribution up to employer match + his income before withholdings (we make quarterly estimated payments on his income).
His income: 75%
Her income: 25%
These numbers were so interesting that I re-organized those a bit and used 1000 instead of %.
His income: 75 000 gross
His taxes: 42 000
His income: 33 000 net (is this now correct assumption how taxes in your country work)
Her income: 25 000 net
Her rental property: unknown
Together expenses:
Mortgage: 12 000
Together renovation debt: unknown
Together groceries: 2 000
Together child care for baby: 6 000
Together entertainment: 5 000
Together 529 for baby: 2 000
Total expenses together: 27 000
His expenses:
His car: 1 000
His child support: 15 000
His shared child expense: 8 000
His tuition: 7 000
His travel and kids: 5 000
His support for parent: 2 000
Total his expenses: 38 000
Her expenses: 0 (as baby 529 marked as together)
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Put that way, your groceries seem really high in comparison to everything else! And I'm guessing that you make more than 100k, so your groceries are likely even higher. Does your entertainment include vacations? If not and that's just netflix, shows and the like, that's really high too.
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I redid our numbers based on our combined gross income not including income from my rental property (more on that below), and used actual averages rather than back of the envelop guesses. Based on our current rate of payment on the 2018 taxes, not including penalties and interest, we will have them paid off in October of 2019. With penalties and interest I think we will have them paid off in November. Then we'll have 11 months of taxes on his income to catch up on for 2019. This is the pattern we've had since we got married, because he had a tax liability from the year prior to our marriage, plus he was not current on taxes for the first year of our marriage.
If my husband withdrew 15% of his IRA, we could pay all of 2018 and get current on 2019, plus pay the penalties and interest on 2019.
If we sold our house, we could pay all of 2018 and get current on 2019, plus I estimate we'd have 20% to put down on an older and smaller, but adequate (for me) home in our community, or we could rent for a while.
His Income 76%
Her Income 24%
His 2018 Taxes 32.50%
His 2019 Taxes 0
Her 2019 Taxes 8.10%
Mortgage & Heloc 11%
Groceries + Food 2.70%
House Related 2.10%
Nanny 5.40%
Baby 529 Plan 0.90%
Gas 0.03%
Dry Cleaning 0.03%
Entertainment 3.60%
His Expenses
child support 11% (going down soon)
Shared child expenses w/ ex 5.40%
Additional child expenses 4.50%
His kids’ tuition 3.60% (going up soon)
His car 1.60%
His parent 2.20%
His capital calls 4.50%
His discretionary spending 0.09%
His/their undisclosed debt ?
Her expenses
Her discretionary spending 0.09%
Her random car expense 0.03%
Her 401k 1.80%
Total 101.17%
Not included above are random things that can and do come up (and of course the undisclosed debt, payments vary).
Some of the low hanging fruit explained: groceries and food includes all food and takeout, diapers, house supplies, etc. Given that we both work a minimum of 50 hours a week, and my husband probably works closer to 75 hours a week if you count his travel, and we have a young child at home, it is not conceivable for us to cut back on this, or on the cost of a nanny, without whom we could not do our jobs. Same with "house related expenses" which include a biweekly cleaning and gardening. Entertainment includes everything we spend as a family and as a couple on vacations, road trips, an occasional concert or sports event. This is an area where we can and are cutting back, but we're already pretty careful.
My rental property nets $35,000 a year and it's not included because I bought it many years ago before we were married, and I account for it in a separate business checking account which also predates our marriage. I'm currently allocating 100% of the net proceeds to "his 2018 taxes". I don't think it's wise for me to sell this property to pay off the taxes because (1) after years of depreciation, the tax liability will be significant; (2) I think I'd resent him a lot if I did it; (3) I think it'd enable the current situation that we have with overspending; and (4) it could take a long time to sell anyway.
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What % would his "potential" not guaranteed 2019 bonus AFTER taxes be? As a %. When does this traditionally come? I don't think you included that yet, and it has a true bearing in the overall situation.
If he doesn't spend that bonus, and applies it to the taxes, it might be all OK sooner than you think. It doesn't seem like it now to you, but to him, it might not seem like a big deal if he plans to use the bonus for it.
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October 2019 is very soon! You should really remind yourself not to make long-term decisions to solve such a short-term problem. Selling a house and buying another would take months too, and would add stress and complication to your lives during those months, and would adds its own transaction costs or taxes.
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His bonus which would come in December could be anything from 0 (last year) to enough to payoff all our tax liability and undisclosed debt, so yes, this very well could be a situation where I need to just make peace with the tax debt and stop stressing.
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The 0% for 2019 tax has me a bit worried that you'll continue to be behind. Is he not paying estimated taxes at all?
The 0 bonus years hurt. They do. The odds of there being two 0 bonus years in a row are slim. I can commiserate because my DH's bonus is between 85%-150% of his base salary. We live off the base, and save off the bonus. A $0 bonus year means a tight tight year. We have a large emergency fund though. In 10 years, your DH will be singing your praises. My DH tells everyone he'd be driving a brand new Porsche, but living in it if it weren't for me. ;-)
9 months feels like a long time to wait, and I understand it's stressful. Yes, your DH has made some very poor choices. You have to decide if he's worth the long-term investment and commitment to helping him change past habits to more positive ones. Digging out of debt isn't fun, but it does appear like he has the ability to service the tax debt in the future. I'm also going to say he may have made an undisclosed (so you wouldn't get in trouble if it ever came to light) deal to NOT take a bonus last year. There may have been more pressure from his ex to give it to her and their kids - even a potential court grab. If child support ends at a certain point, he may be waiting to time his large payout until after his youngest is 18 and they can't drag him into court. Honestly, I would think it was better to not know about it....These kind of situations are far more common than you would expect - and for the #'s you're talking about, I could see him doing it to protect your future family if he thinks he's paid her and them enough.
Selling the house in the next 9 months does not seem like a good idea to me - and full of additional stress.
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I think the most important part now is for the OP to really talk to her husband and reach a level of mutual understanding. Has that started yet? Without a clear goal and agreed-upon values all of this is just us spinning our wheels.
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Mortgage & Heloc 11%
Groceries + Food 2.70%
House Related 2.10%
Nanny 5.40%
Entertainment 3.60%
His Expenses
Additional child expenses 4.50%
His car 1.60%
His capital calls 4.50%
I think these are the areas where the two of you can look at making changes to reach a sustainable path towards a shared financial plan. The rest is either two small to matter or is simply not optional any longer. These categories represent about 1/3 of your total income. A visit with a financial planner and exploring how changes to these numbers affect your long term finances could help motivate him to make changes.
If my husband withdrew 15% of his IRA, we could pay all of 2018 and get current on 2019, plus pay the penalties and interest on 2019.
If we sold our house, we could pay all of 2018 and get current on 2019, plus I estimate we'd have 20% to put down on an older and smaller, but adequate (for me) home in our community, or we could rent for a while.
I really think one of these two scenarios would be best - a financial planner could help evaluate the long term effect of using IRA to get current on taxes and compare that to downsizing the house.
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I understand that you want to keep your rental property separate.
But since you are using all of the net proceeds towards DH’s debt I think you should include it in your numbers.
That way he can see you much your income is subsidized his lifestyle.
Considering he makes 3x more than you this is crazy.
I also agree with the poster that you should be accounting for 2019 taxes.
Even if the money isn’t going to payments the debt is accumulating.
Otherwise, good work for taking a serious look at the numbers. It can’t be easy.
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The money he spends on his kids is not the issue. You said in the original post that 55% of his take home income goes to them. If this is TRUE after tax income then I don't think 55% is too much to pay to put your three kids through college. If he was still married wouldn't 55% of his take home pay go to providing for his three kids?
The problem is that HE is a lousy financial manager. He never downsized his lifestyle after divorce. He doesn't pay his estimated taxes.( I'm self-employed. I put away one third of my monthly income every month to pay my quarterly tax estimates. I never owe money to the IRS because I don't spend money I don't have.)
You should never have taken out that Heloc in only your name. Why can't he sell some of his "illiquid" assets to pay that off and pay his taxes? If he owns investment properties he needs to sell them to pay his debts. There must be some way to sell his assets.
Once his debts are paid you need to make sure that your household is living a lifestyle that is supported by your income plus 45% of his. And meanwhile you NEED life insurance on him, at least enough to pay off the taxes and the HELOC.
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He should cash out enough of his retirement savings to pay the back taxes and penalties - and cash out again in 2020 to pay the 2019 taxes and penalties. Even with the taxes and penalties you will probably come out ahead - and your stress level should be reduced. Hopefully, he will see the folly of this approach when he sees the hits to his retirement accounts, and this will motivate him to start making quarterly payments (and living within his means) to stay current. I can't imagine funding my retirement account before paying bills (including my taxes).
If this doesn't get addressed soon, it will continue to snowball. I had so much anxiety reading your posts - I would be "shaking in my boots" if I lived like this. My sister (primary breadwinner in her family) has lived the life of taking care of her husband's first family while trying to give their kids a good life. She's been miserable and financially burdened for years. And now they are going through an expensive, depleting divorce. This is your future if you don't work together to figure this out. You have my sympathy.
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And btw his will should give enough to you to pay the debts and pay for college for your daughter and raising her.
A cautionary tale - my aunt was widowed and remarried in midlife when both had kids grown and independent. They had a nice life together for 20+ years. When he died his estate went to his kids; she had to move out of the cozy little suburban home they had retired to and live her last year's in a trailer park. I don't know whether he neglected to change his will, had a bad will, or if his sons convinced him to change it on his deathbed, but don't let this happen to you.
(Btw those "illiquid" assets, do you have proof of their existence?)
Seeing a financial advisor together will take the burden off of you to point these things out to him.
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And btw his will should give enough to you to pay the debts and pay for college for your daughter and raising her.
A cautionary tale - my aunt was widowed and remarried in midlife when both had kids grown and independent. They had a nice life together for 20+ years. When he died his estate went to his kids; she had to move out of the cozy little suburban home they had retired to and live her last year's in a trailer park. I don't know whether he neglected to change his will, had a bad will, or if his sons convinced him to change it on his deathbed, but don't let this happen to you.
(Btw those "illiquid" assets, do you have proof of their existence?)
Seeing a financial advisor together will take the burden off of you to point these things out to him.
Either his will or a life insurance policy with you/your daughter as beneficiary. Also be sure to get a life estate to his share of your primary residence so his heirs can't force a sale until you move out.
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The money he spends on his kids is not the issue. You said in the original post that 55% of his take home income goes to them. If this is TRUE after tax income then I don't think 55% is too much to pay to put your three kids through college. If he was still married wouldn't 55% of his take home pay go to providing for his three kids?
I get that OP and her spouse are high earners, so the math may be different, but yikes. By your math, that's 55% for three of his four kids, which would mean 73% for all four kids. Even if we attribute half of theoretical family spending on necessities (housing, food, clothing, healthcare, etc) to the kids (either direct payments or as part of child support), that's way, way too high. That's 27% to pay for the other half of necessities, contribute to retirement savings, and for the adults to have any spending money.
Put differently, it means that, assuming ALL of the rest of the income goes to necessities, then 45% of the family income is going to non-necessary spending on the kids, while the adults get zero non-necessary spending, including retirement savings.
Even putting 55% towards all four kids combined would be a high number, in my opinion, particularly if it doesn't include expenses like daycare (I don't think of daycare as spending 'for my kids' so much as spending 'for my career,' but that's a separate issue).
As another data point, the calculation of expected family contributions for college maxes out at a 47% *marginal* rate (the effective rate would be lower, perhaps substantially so, depending on household size and income).
In this situation, OP and her husband should absolutely be downsizing, and he should make all of his court-ordered child support payments. But she is not being unreasonably to expect him to discuss ways to cut down other spending on his kids, because he simply cannot afford it.
For OP, I think one helpful basis for this conversation would be to run the numbers on how your finances would look if you did get divorced. Assume that you'd split the custody of your shared child 50-50, and include state standard child support based on that time split. Not because you should do that, but to put a number on how much you are subsidizing him each year.
And to be clear, spouses subsidize each other all the time. I paid off my husband's student loan debts for him after we got married, and have zero resentment about that! But that's because we run our finances as a team, and make decisions together about what will provide the optimal outcome for our family. Your husband wants to have it both ways. He wants shared finances for the purposes of having you subsidize his lifestyle, but he doesn't want shared finances for the purpose of financial decision-making. He can't reasonably have both of those things at once.
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Your husband wants to have it both ways. He wants shared finances for the purposes of having you subsidize his lifestyle, but he doesn't want shared finances for the purpose of financial decision-making. He can't reasonably have both of those things at once.
Well said!
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I am remarried; I have 2 biokids and my H has 1. My exhusband is remarried and has 3 stepkids, 2 of whom are in college. We're dealing with a lot of combinations of parenting and stepparent influence. It's HARD, but that doesn't mean it has to be impossible.
His Expenses
child support 11% (going down soon)
Shared child expenses w/ ex 5.40%
Additional child expenses 4.50%
His kids’ tuition 3.60% (going up soon)
His financial obligations to his three oldest children are approximately 25% of your joint income, which makes it about 33% of his income. This is a pretty reasonable figure. In my state, a parent with 3 kids would pay 30% of their income in child support. Your husband values paying for college for his kids, so he spends a little more than this.
The kids aren't the problem. The ex-wife isn't the problem. It's easy to focus on them when looking at the line items, but I would recommend that this spending related to them be completely off the table in discussions. Your H and his ex have come to an agreement together on how their children will be raised. While it would be ideal if he would discuss this with you and listen to your input, he has made promises that he's legally obligated to fulfill. That agreement may not match your values, and there's no reason why you and your H have to spend at the same level on the child that you share. Different families, different values.
I strongly encourage you to work through this stepparenting hurdle with your therapist.
I'll second the response to get a financial counselor and to try marriage counseling again, perhaps with a different therapist. The focus needs to be one the future, not the past, and the therapist needs to be skilled enough to redirect both of you when he gets defensive and you get distraught. Pretend the spending on the three oldest kids doesn't exist, and then sit down together to work out shared financial values and goals. At this point, I'm not confident this is a conversation that the two of you should have without a trained professional, because you've had too many examples of the wrong way to do this.
If, after 6 months of joint counseling with a good therapist, the two of you can't agree on shared values, then you have a choice to make. If your husband refuses to do any of the work or keep seeing the therapist (my ex stopped marriage counseling as soon as the therapist started trying to address areas he needed to change)...then you have a choice to make. If your husband isn't willing to be totally transparent about the debt....you have a choice to make.
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Thanks for all the great advice.
Some posters have suggested that I need to think of us as one big family and more or less be okay with current spending on the older children (two of whom are adults). That I should think of the big picture, and it's okay if I stop 401k contributions and saving for our daughter to go to college, and throw everything toward this debt while we keep up current spending on him and his older kids. But as a second spouse, isn't it possible that he could die and leave me with a huge tax debt, but leave his entire estate to his three older children? I get that I'd have an elective share, but it might not mean anything under our circumstances (his money was made before our marriage and now he's overspending both of our incomes). If we get divorced, I am in a terrible position for the same reason. I know we could talk about it and he can say he'd never do something like that, but the fact is that he can, and that puts me in a very vulnerable position. I think the solution has to give me a way to continue to max out my 401k as I always have since I got my first job, plus save a reasonable amount for our mutual daughter's education, plus leave my rental property alone. Am I wrong here?
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Yes I totally agree that you need to protect yourself and your child. If he died you could end up in a horrible situation. I would tell him to use his retirement money to pay the taxes and then to keep current. I would put your money in retirement and college funds. He is jeopardizing your daughters future and yours at risk by indulging his adult children’s every whim.
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Thanks for all the great advice.
Some posters have suggested that I need to think of us as one big family and more or less be okay with current spending on the older children (two of whom are adults). That I should think of the big picture, and it's okay if I stop 401k contributions and saving for our daughter to go to college, and throw everything toward this debt while we keep up current spending on him and his older kids. But as a second spouse, isn't it possible that he could die and leave me with a huge tax debt, but leave his entire estate to his three older children? I get that I'd have an elective share, but it might not mean anything under our circumstances (his money was made before our marriage and now he's overspending both of our incomes). If we get divorced, I am in a terrible position for the same reason. I know we could talk about it and he can say he'd never do something like that, but the fact is that he can, and that puts me in a very vulnerable position. I think the solution has to give me a way to continue to max out my 401k as I always have since I got my first job, plus save a reasonable amount for our mutual daughter's education, plus leave my rental property alone. Am I wrong here?
There is no HAS TO. There is only what the two of you agree to.
Here is the one thing I know: You cannot solve this problem yourself in your marriage. You and your husband solve it together, or you file for divorce and rebuild on your own.
Right now you are in option C: Complaining to internet strangers. And that's OK for now. I spent plenty of time doing that while my first marriage was in its death spiral. But eventually, you have to decide how long to wait for him to get his shit together.
(As someone in a stepfamily, I wouldn't focus on the spending on his older kids--I would focus on the budget as a whole. If there are not enough dollars for the current spending, let him see that. Nagging him to spend less on his kids is not a good look, even if maybe that's where it ultimately ends up. It has to be HIM seeing that that's what needs to happen. )
Normally, I don't believe in ultimatums, but I don't see any other choice here. He HAS to work with you on your joint finances and living within your joint means, or there is no "joint" anymore, and he can pay off his own goddamn tax bill and add a fourth round of child support.
Your husband wants to have it both ways. He wants shared finances for the purposes of having you subsidize his lifestyle, but he doesn't want shared finances for the purpose of financial decision-making. He can't reasonably have both of those things at once.
Well said!
+1 to this.
I get how hard this is. You want there to be another answer. I really, really hope that your husband comes to see the gravity of the situation and its deep unfairness to you.
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The recommendation for him to pay off taxes for 2018/2019 with his retirement is a good one. Yep, a bit of a penalty, but he can make it up with future bonuses.
I also like the idea of life insurance on him, until the large joint debts are paid off and a fund for your daughter started.
Question? What is "His Capital Calls 4.5%" This is the cost of your food and household (cleaner, gardener) combined. It's huge.
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I've read this thread for a while and am struck by how similar it is to my situation. My DH does not have children from a prior marriage but had huge unpaid taxes when we married (undisclosed), and overall really poor financial habits, as I see described by your DH. We've been married 20 years now and I just want to share a few things from my experience. I've tried many many many times to get on the same page financially with my DH. When we first married I was responsible financially but not smart or frugal (i.e. I always paid my bills but spent more than I should have given my income). His spending habits were not the red flag they should have been when we were dating. All these years later, I've gotten smarter and understand that money does not buy happiness, but he has not. He is a also high earning, works a ton. Can not be "bothered" with the details of life and saving, he'd rather figure out how to earn more money. All in all, although he says he is willing to change and that he shares my goals, his actions do not support this- over and over.
All that bad stuff said, I have stayed with him and intend to. I love him and he is a good father. He has made concessions- we live in a small home (but in an affluent area) that he does not like. I manage the finances and make the key financial decisions (although he still has serious amounts of slush money from side work). I don't want to paint a pretty picture because it's not that pretty, and he still exhibits "financial infidelity". These things are hard on me, hard on us. And in fairness hard on him because all these things create tension in the relationship. His values are so different than mine, yet I act like mine are the correct ones. To elaborate, my values are to live more simply and use resources wisely. His are to experience as many things in life in possible and engage in the many activities he enjoys and take care of family/friends. He's not a bad person because he wants to do all the things regardless of the cost (although it can be hard to remember this, lol).
Reducing our larger fixed costs has helped a lot, but it's not a silver bullet. As you already know, there isn't one. What I would offer as advice is to understand his view, his values and be open to the fact that they also have value. From there you need to decide if you have live with these differences.