Author Topic: What would/did you do?: student loans and relationship finances  (Read 968 times)

Britan

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What would/did you do?: student loans and relationship finances
« on: November 13, 2015, 03:00:58 PM »
Lookin to hear about how others have handled a situation. Here it is:

You're talking finances with the Love Of Your Life. Maybe you're married or cohabitating or whatever. You are young with some limited savings ($20k in retirement). LOYL has no assets and $80k student loan debt for a degree that actually pays off in terms of money and job satisfaction. Woo! You both have equal incomes. Here's the question, though. When budgeting and organizing finances, do you say:

1. What's mine is yours, what's yours is mine. Forget saving for now even though you could, and dump money in that student loan as if it was your own!

2. You deal with your shit, I deal with my (nonexistent) shit. Split all expenses evenly. LOYL pays off loan at the rate they see fit (which will be slower and result in more interest paid) while you stash away savings for retirement, a house, etc.

3. Some combination?

Obviously one is most mathematically optimal, but in relationships, mathematical optimality is not necessarily most important. I could see all of the above being valid choices depending on the people involved and the individual circumstances

For folks who have been there: what did you choose to do, why did you make that decision, and how did it turn out? .

Goldielocks

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Re: What would/did you do?: student loans and relationship finances
« Reply #1 on: November 13, 2015, 03:13:35 PM »
There is a huge difference between marriage and cohabitating...

If Married..
1. What's mine is yours, what's yours is mine. Forget saving for now even though you could, and dump money in that student loan as if it was your own!

If Cohabitating... for less than 5 or 10 years, so far, and not currently considered "married" by law..
2. You deal with your shit, I deal with my (nonexistent) shit. Split all expenses according to our respective income % evenly. LOYL pays off loan at the rate they see fit (which will be slower and result in more interest paid) while you stash away savings for retirement, a house, etc.  No to house savings by only one person for owning as a couple -- that down payment should be shared, too, unless the house is only in your name / your own personal investment.

Cohabitating -- you need to be able to cleanly split up assets if you split.  Married, well, you made a vow to support and protect each other for life, and that extends to your finances if you split up, if you don't love someone enough to help them with their life for a time after a divorce, don't get married. IMO.