Author Topic: Should I help my (non-Mustachian) SO with her student debt?  (Read 5635 times)

Riptoast

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Should I help my (non-Mustachian) SO with her student debt?
« on: April 16, 2016, 09:13:10 PM »
My SO other and I will be moving to Colorado in the fall for her to start a two-year graduate program. I will be looking for my first career putting my Masters degree to work. I can expect to earn ~$45,000 for an entry level position in my field.

Neither of us have any debt currently, she has a few thousand dollars in the bank and I have some personal savings (~$50,000 mostly in Vanguard funds). Her tuition will cost about $25,000/yr for two years. She is doing her best to find scholarships/grants/TAships/work-study to limit the loans she has to take out.

I don't intend to help pay tuition but I am trying to figure out if I should help pay more than our current 50/50 split on shared expenses (rent, food, transportation, etc) while I am earning an income and she is going into debt. She will be working part time during school and will probably earn enough to cover her half of expenses, but then won't have any left to go towards tuition, and therefore be racking up more debt.

Being in a committed relationship (we are engaged) I want to do my best to help her avoid debt since to a certain degree I feel her debt is also mine. I am more frugal than her, however, and would prefer to live extra-cheap for the next few years before she is earning an income (get roommates, eat lots of rice and lentils, etc) in order to reach FIRE sooner. She is not a big spender but is also no Mustachian, and wants an apartment to ourselves, decent food, a new bike, and some level of luxury (in my mind) spending.

I don't want to push her past her comfort zone on the spending front (don't want to totally put her off of Mustachian living and FIRE) so we will undoubtedly be spending more than I would prefer. I can justify this increased spending with the importance of maintaining a good relationship. I am afraid that if I am paying more than 50% of our shared expenses I will resent it. For example, if I was paying for 75% of our rent I would feel frustrated if she spent $45 on a haircut, since she might feel that me helping with rent frees her up to spend a bit more on "luxuries." I could also see myself selfishly resenting the setback to my personal FIRE date, since she doesn't have the same early retirement goals as me and is ok working a longer career.

Has anyone dealt with a similar situation? Should we just keep the 50/50 split since it is inherently "fair" and let her take on more debt and then pay it off herself? Should I be paying 60-70-100% of our expenses? Any relevant advice would be much appreciated.

okits

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #1 on: April 16, 2016, 10:17:06 PM »
How do you intend to manage your finances once you are married?  Proportional to income, 50/50, all one bucket?

meep

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #2 on: April 16, 2016, 10:31:50 PM »
Is there no way you can find a way to get a place without you putting in more than 50% or her getting into debt? Can you manage a studio? Smaller space means cheaper rent, less in utilities and less room for stuff so less spendings on tangibles. I would prefer a studio over roommates but maybe see how she feels.

Ann

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #3 on: April 17, 2016, 12:01:59 AM »
How do you intend to manage your finances once you are married?  Proportional to income, 50/50, all one bucket?

+1
Let's skip grad school for a sec.  Please make sure you and your girlfriend discuss how you are going to handle finances when you get married.  There is not an empirically right or wrong arrangement, but there usually IS one that instinctively seems fair to an individual.  Unfortunately that varies among individuals.  You seem inclined to believe 50/50 is inherently "fair".  I can tell you others would see an income-based arrangement as the most inherently fair.  My friend is like that - when she moved in with her boyfriend she automatically started picking up a higher percentage of the move-in costs and monthly bills.  She felt it was "only fair" since she made more.

Please don't get into a marriage without this discussion because one or both of you will feel resentment.  Especially since she will probably be the lower-income earner for a while (at the very least she'll be two years behind you in her career).

Now to thoughts on your actual situation: perhaps you can discuss going by a budget rather than straight up percentile?  Mostly for rent.  Like if you find a nice little studio apartment: you can be willing to pay 60-75% of that.  If she really would rather have something nicer, you'd contribute the same dollar amount, but that means she'd be paying the difference and it may end up being 50/50?

Just a thought.  Everyone is different.  And whatever you decide, you'll have to let her spend her money, within reason, on what she wants.  If she is entering grad school with no debt of any kind, then she has some sense of finances (or rich enabling parents).  If the extravegent things you are imagining are $45 haircuts, then she is still far more frugal than the average American.

BTW I wouldn't rule roommates out, but I would really listen to her concerns.  She will be working and in graduate school.  Likely she'll have lots of work that needs to be done at home, in a nice work-indusive environment.  That can be hard to dictate with roomies, who rightfully should be able to watch TV, hang around or (sometimes) invite over friends.

JJ-

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #4 on: April 17, 2016, 12:58:03 AM »
Ann has some great points. Communication is key. And yes, $45 for a haircut is pretty cheap as far as luxury items go.

I find it reassuring that she's doing her part to reduce the amount of loans she has to take out by getting scholarships or gigs on campus, so at least she's not expecting to pay for the whole two years at 7% or live off you.

As far as what's "fair" regarding the split of expenses... you two have to jointly decide what's fair. Until you both find jobs, you'll have no idea what your inflow looks like. In the meantime, since it sounds like you're moving from out of state, I would encourage you to jointly build a "move" fund at a level that can at least cover a security deposit, first month's rent, moving expenses, and probably double what you spend on groceries and transportation currently. This should help smooth out "who pays for what" while you get settled.

Also, as somebody with SL's who dated and married somebody with no SL's, despite how much she wanted to "help" with my loans, I told her to "help" by saving or spending her money however she wanted. She was and still is fairly frugal, and it sounds like your SO is at least fairly frugal too, so I'd recommend relaxing a bit there, especially if you want her to stick around.

On another note, I think there's something of a red flag in your post regarding your frugality. Are you eating lentils and living with roommates right now? Are you living "extra cheap" to boost your savings rate or to make your FIRE journey easier later? Be careful about implementing an abrupt change in lifestyle during a likely stressful transition for your SO. If it helps, remember that this momentary debt setback should ultimately boost your household income, so focus on the big picture.

You'll figure it out, don't worry. It'll be stressful over the next few months, but keep talking to each other and it will be OK.
« Last Edit: April 17, 2016, 01:01:09 AM by JJsfr »

Sailor Sam

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #5 on: April 17, 2016, 03:36:00 AM »
You talked about fair. I've noticed that in well balanced marriages, fair doesn't enter the equation very often. Instead, you have a split that you both find equitable. This goes for spending, chores, and child raising. If you can't get that part down, you're in for some miserable fights.

Like others above me, I'm going to suggest talking to her, instead of the internet. It sounds like you guys need to have critical money conversations before she starts school, and definitely before you get married. There are guides on the internet, both religious and secular, that will take you through some very critical conversations. And don't stop at one session. Keep probing, until you are certain into your bones that you've both internalized what the other is saying.

One of the biggest joys in my life is feeling like I'm on the exact same path as my wife. It is her, and me, and fuck the rest of the world. Not just on spending, but our larger life goals. We sat down, and came up with a mission statement for our marriage. We talk once a month, to make sure things are still going well. That everyone feels equal, and nothing is being misbalanced. I know it can sound a little corny, but it's such a good place to be.

little_brown_dog

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #6 on: April 17, 2016, 06:16:49 AM »
I am pretty mustachian but I would not want roommates as a couple. To me that is extreme unless you are in really dire straights or you really truly do not mind not having your own space. If she doea not want roommates that is completely normal, not spendypants.

I have never made as much as my husband. Rjght after my grad program, he paid 75% of living expenses because I made so much less and he wanted me to focus on putting as much as I could to my debt. As he made more over the years he threw as much extra cash as he could at them because he viewed them as his debt too. This method worked well for us. 5 years after moving in together we have eliminated all debt including approx 100k in my student loans. However this requires that you truly take a "what is mine is yours" approach to your relationship. You really gotta be in this thing till death do you part if you want to be okay with essentially helping to pay off a huge chunk of your partner's debt. In our families divorce is not an option barring extreme circumstances so our way made sense to us. But I know many couples nowadays do not feel the same way and therefore might benefit from limiting their financial investment in their partner (at least at the beginning).
« Last Edit: April 17, 2016, 06:25:05 AM by little_brown_dog »

Noodle

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #7 on: April 17, 2016, 07:40:53 AM »
I applaud you for thoughtfully considering finances well in advance, but I think you are a few steps away from figuring out how to split expenses.

I would keep having those conversations about your goals as the family you will someday be--other than FIRE for you, what do you want that family to look like? Kids, stay at home parent, geographic flexibility so your SO can go where the best jobs are for her, planting roots near your parents as they age?  What about that wedding that you will have someday? Big, small, somewhere in between? Knowing that you have two different personalities in your couple--someone who wants to go all in to achieve goals as quickly and efficiently as possible, and someone who wants to enjoy the journey along the way--means you need to work especially hard at knowing clearly what your goals are and practicing good communication skills.

I'll be honest, I would also spend some time in contemplation if you feel like you are tempted to resentment that your SO's choices mean a longer journey to your goals--it's totally understandable, but so, so corrosive to a happy marriage. Your SO is who she is, and choosing to marry her means that YOU are choosing this longer path to your goals. So will having children. So will having pets, if you do that. I'm not telling you to break up, at all, just see if you can find a way to come around to accepting the life that you are actually going to be living with this person.

As for the actual finances...I would wait till you get to Colorado and see what your income is and what the available housing options are; also what her grad program is actually like in terms of the work and time involved. It may be like the one you did, or it could be very different, so planning based on your experience is of limited value. Answers may reveal themselves once you have data in hand, and there is nothing to say that you can't start at a 50-50 split and then later increase your contribution if you feel it is appropriate.

K-ice

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #8 on: April 17, 2016, 07:56:08 AM »
Lots of good questions & replies.

You really need to ask her what she wants.

I insisted on paying half our expenses thru grad school. But I had enough TA, & funding to make it work.

My SO found this odd because they paid for everything for their former girlfriend. The situation was exceptional because they were a foreigner who couldn't work. But he was happy, at the time, to pay for everything, eventually including the one way ticket home.

Back to us, so he found it refreshing I insisted on 1/2.
We did have roomates for one year. But 2 couples in a 2 bedroom resulted in us never speaking to the roomates again.


We have always kept his/hers & 50:50 ours but in hindsight maybe we shouldn't have done 50:50 ours.
His/hers include clothse, hobbies, tuition etc. while ours is living expenses vacations.

15y together and he earned more than me the first 10y. So he has much more savings
Sharing the "ours" proportionnel to incomes is maybe more fair. 

I also think for tax planning you eventually want even incomes in retirement.


During one small point in time I paid more but he paid me back.

When I took a year mat leave, I had saved the year before so I could keep paying my half. (Ps Canada is great & provided me about 1/2 of what I needed to get thru the year.)

But talk about what you would do if she didn't work 5y from now when you have kids. What if one of you were hurt/sick & couldn't work? The 50:50 should probably change unless you insist each have their own savings &/or insurance.

Neither of us had to go into any debt. I think that would have changed the discussion a lot.
Paying the bank interest if the other could cover it would be pointless.

We probably would have written up a little agreement that I had an interest free loan from him to cover tuition.

Best of luck in this exciting time.




 

 

Riptoast

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #9 on: April 17, 2016, 04:00:57 PM »
Thanks for all the thoughtful responses. Your advice has given me more to think about as my SO and I get closer to this next phase.

@ Ann: I appreciate you pointing out that 50/50 is not everyone's idea of fair, and needs to be negotiated case-by-case. I am a fan of salary-based contribution once we both have salaries, but applying that maxim to our upcoming situation would have me paying for everything, so I was panicking and falling back on 50/50 because I wasn't sure what other ratio to use. I like your idea about me fixing a budget for rent, for example, and agreeing to pay about 75% for a cheap place, which she can choose to upgrade and pay the difference. Sounds very logical to me.

@JJsfr: Also great advice, thanks. Good point about the stress of the upcoming lifestyle shift. We have both gone through recent periods of living with roommates and eating ultra-cheap, but she is less thrilled about having to continue with that lifestyle than I am. Thanks for reminding me that this next phase will be exciting but also parts will be stressful and I should be prepared to cut her some extra slack.

Bottom line I got from all of your responses is that continued communication is key, and willingness to focus on my larger priorities (future, family, jobs, home with my SO) instead of getting too preoccupied with the gritty details of daily frugality.

Thanks again for all your support!


ender

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #10 on: April 17, 2016, 06:19:36 PM »
You talked about fair. I've noticed that in well balanced marriages, fair doesn't enter the equation very often. Instead, you have a split that you both find equitable. This goes for spending, chores, and child raising. If you can't get that part down, you're in for some miserable fights.

Like others above me, I'm going to suggest talking to her, instead of the internet. It sounds like you guys need to have critical money conversations before she starts school, and definitely before you get married. There are guides on the internet, both religious and secular, that will take you through some very critical conversations. And don't stop at one session. Keep probing, until you are certain into your bones that you've both internalized what the other is saying.

One of the biggest joys in my life is feeling like I'm on the exact same path as my wife. It is her, and me, and fuck the rest of the world. Not just on spending, but our larger life goals. We sat down, and came up with a mission statement for our marriage. We talk once a month, to make sure things are still going well. That everyone feels equal, and nothing is being misbalanced. I know it can sound a little corny, but it's such a good place to be.

+1

AZDude

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #11 on: April 18, 2016, 10:28:40 AM »
Quote
Being in a committed relationship (we are engaged)

Then yes, you should. Even asking the question makes you seem less committed, IMO. You do not have to pay her tuition, but providing free room and board will cost you little more than you would be paying by yourself and would help her out tremendously. Also sets a good tone for the relationship going forward.

Think of it this way. When she graduates and you are both working and making a good salary, you want to be racking up the savings, not paying down debt.


esq

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Re: Should I help my (non-Mustachian) SO with her student debt?
« Reply #12 on: April 18, 2016, 12:39:17 PM »
I could also see myself selfishly resenting the setback to my personal FIRE date, since she doesn't have the same early retirement goals as me and is ok working a longer career.

Not sure if you mean she wants this for both of you, or just for herself.  Either way, this raises a red flag. I know you'll make sure you include it in your conversation about the future.