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The Money Talk

June 17, 2008

Personal finance experts typically suggest having the big financial talk before marriage.

Having dated T for approaching 4 years (!), I think having a formal money pow-wow is completely unnecessary. I’m (obviously) all over my finances, and there aren’t secrets. He knows I have student loans (not the amount), he knows I have savings (not the amount), and he knows I prioritize retirement accounts above a cash build up (presumably, for a house). He also knows that while home ownership is not at all my dream right now, I’d be willing to compromise at a later date. He also knows roughly how I’m spending my money, because even if we don’t spend every day together, we certainly know the details of each others lives.

I know he has zero loans, a small Roth IRA, and some undetermined amount of savings. It could be $10k, it could be $5k, it could be $20k. I have no idea, but it doesn’t really matter to me. I know how he spends his money (carefully) and neither of us have credit card debt.

Why not the amounts? I’m not quite sure, but I originally refused to say the number because of his mom! She (naively) once said not to marry someone with student loans. I don’t know where that old-school thought came from. I do ” understand “don’t marry someone in a financial mess”, but paying off my student loans simply is not the best thing for me to be focusing my money on.   Of course, T can see the bigger picture. He can recognize that, even strictly financially, what I’d bring to our life together is much more than student loans. And beyond the finances, I’m invaluable. 🙂 Right?

My student loans will never be a burden on us, nor am I going to change how I feel about him based on the exact amount in his bank. It’s something, and that is nice to know, but it doesn’t matter.

More than the amounts and various balances, the important thing is that I know his character and he knows mine. We have similar priorities and values when it comes to both money and life. We are both savers, but we believe in splurging in the same categories. Money may be the number one cause of fights (and divorce), but I think that is because most (non-pf bloggers) aren’t smart about money. We aren’t a statistic.

My thought isn’t “don’t talk about money before marriage” but rather, “I don’t plan on having an official money talk.” We have talked about various money topics as they come up, and it has always worked fine for us. In the case that money is rarely discussed, of secret debts (or secret assets), “the money talk” makes more sense.

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18 Comments leave one →
  1. Andrew Stevens permalink
    June 18, 2008 8:59 am

    Perhaps you’re right and it’s unnecessary, but you don’t inspire confidence in me with this post. The best reason why it would be unnecessary is because each of your finances are already an open book to one another, but that clearly isn’t the case. I find it a little odd that you’ve been together for four years now and he doesn’t even have a ballpark idea of your student loan debt (perhaps) and you don’t even have a ballpark idea of his savings.

    You’re certainly right that it’s the character that matters, but it’s curious to me that you’re pussy-footing around this issue. It’s not a question of why you should have “the big money talk,” but why shouldn’t you. You sound like you ought to be completely comfortable talking about this with him, yet you’re obviously not for some reason. Meanwhile, this post came off as rather defensive, giving all your reasons why you shouldn’t have to have it. I suspect this defensiveness comes from his mother’s comment and, despite your protestations, you still fear that the amount of your student loans is going to put him off. If I’m right, may I suggest that you trust your judgment about him (and not his mother) and suggest to him that you swap financial information. Certainly you should do this before you consider marriage.

    You should both get completely comfortable with having each other’s lives be an open book to one another, or it’s very likely that you will end up a statistic.

  2. Andrew Stevens permalink
    June 18, 2008 9:02 am

    By the way, there’s no reason on earth your student loan debt should be a barrier to any thinking person, no matter how debt-averse. If it seems like it is a problem, point out to him that your net worth is positive and you could (if you wished) pay it completely off right now. Then explain why you’re (wisely) not doing this.

  3. June 18, 2008 9:52 am

    He certainly has a ball park idea. He also knows roughly (exactly?) the payment. There will be a point when we join finances and the exact numbers will be known. Still, there won’t be surprises or anything really to talk about. I just don’t think it is an issue until then. (Though if he wanted to share all, I’d be fine with it. i haven’t pushed for it, neither has he, and I’m not worried about it)

    I do think he’d be more comfortable if I had no loans and more meager savings, even though that is not logical. He isn’t as interested in pf concepts as I am, and once said he would like to buy a house for cash someday. I explained to him the silliness of that (unless you really have nothing better to do with your money!) He is open minded (and has talked about loans since). He also was extremely nervous for a credit card, which is ridiculous since he’s so responsible.

    You hit the nail on the head about the defensiveness towards his mother. I don’t like her comment at all, and it bothers me that anyone would think that way. However, she has plenty of other (non-financial) comments that rub me the wrong way . She’s just a bit old-fashioned, and I try not to hold it against her. I probably should just let this one slide as I try to let the other ones….

  4. June 18, 2008 10:04 am

    I dont understand why you dont pay your student loan. Debt is debt whether it is CC debt with 0% or student loan.

  5. June 18, 2008 10:09 am

    @Chicky – the interest rate is low, and will be 0% when I’m in school from this September for about 2 years. It is also tax deductible. I can make more in a simple high yield savings account than they are charging me (well, maybe not with the current rates). Unlike CC debt, the rate won’t jump, the low rate isn’t a teaser rate. And if I lose my job, I can request a deferment for free.

    It is MUCH more important to me to save more for retirement and to have solid emergency savings. I’d even place savings for a house downpayment above paying down the loan. Once I am able to max my retirement accounts, have and efund, have a house downpayment, then MAYBE I’d pay them off more aggressively. But the interest will likely be less than mortgage interest rate!

    “Debt is debt whether it is CC debt with 0% or student loan.” What about mortgage? Do you classify that as debt?

  6. June 18, 2008 10:21 am

    ohhh YES.

  7. June 18, 2008 10:23 am

    At this stage in my life, I can’t imagine sharing my information with any one…no one knows how much I have in retirement savings or regular savings. My family is aware where I have my accounts and that I have a small ($30k) life insurance plan.

  8. June 18, 2008 10:31 am

    @saving diva – I’d be interested in a post on why you have life insurance at your age and status. I don’t (except whatever the company provides) and don’t find it necessary. Or you can respond here if you’d rather not write a whole post.

  9. June 18, 2008 10:31 am

    In my opinion, being gf/bf vs being engaged vs being married is all different even if you’ve been with bf for 4 years. They are different stages of life. So sharing with your bf “roughly” is totally appropriate because you are at that stage of your relationship. Once things are official believe me the dynamics of your relationship will change.( in a better way)

  10. June 18, 2008 10:32 am

    @saving diva (again) – PS, your name in your comments links to a specific post of yours from May, not the main page of your blog.

  11. June 18, 2008 12:54 pm

    You BF’s mom comment rubs me the wrong way too (but I also have a lot of student loan debt too!). Under her rubric, doctors and lawyers and other people with professional degrees would be ummarriable despite generally having the ability to earn a lot of money in the future.

    I also struggle with how, what and when to share my student loan debt burden with my BF. He knows I have debt (I am lawyer, ugh) but I have never given him a specific number. I also let him know that this debt will never become his- for instance if we marry and I were to die or we were to get divorced. My student loan debt will either stay with me in a divorce or be forgiven if I die or become disabled.

    However, I often feel like I have a reverse dowry and that sort of sucks. Which I guess is the reason your BF’s mom’s comment irks me.

  12. June 18, 2008 1:32 pm

    @C – I think that when viewed in a big picture, SL debt isn’t a big deal. Big picture being earning potential, other savings, etc. But when viewed as an isolated thing… it can be unnerving to those who didn’t have to deal with it.

  13. June 19, 2008 3:50 am

    You asked Saving Diva why she had a life insurance plan…

    I am 23 and have one too. I think my plan is 60k (it’s not quite double my salary) I have one because it’s a work benefit. I contribute a dollar a month for this, and for such a small amount I figured it was worth it. You never know what will happen (even if you are young) and it didn’t cost me much. R has a life insurance plan too, same reasons.

    R has a ton of student loans and it took him a while to get comfortable telling me the details. I didn’t understand it, but it seems to be a common thing. I guess people are embarrased with the debt they have?

    Are you paying anything on the student loans or are they still deferred?

    And to answer another comment not directed at me (sorry for intruding on the comments here) I also consider a mortgage to be debt. It’s the same as a car payment – it’s a large amount of debt for an item that costs a lot. You owe money, so of course it’s debt.

    k, long comment done. 😉

  14. June 19, 2008 6:21 am

    @L – I’m paying them for now, they will become differed in the fall when I start school as a half time student.

    It isn’t so much embarrassed. I think I have quite a reasonable amount and a career from it. I guess it is just worry for lack of understanding, particularly after hearing what his mom thinks about it.

    I may have life insurance through work, but since no one depends on my income, i’m not too concerned. I suppose it would be quite cheap.

    Mortgage is debt, but I don’t consider it the kind of debt you need to snowball and rush to pay off. You know?

  15. Bonnie permalink
    June 19, 2008 7:28 am

    StackingPennies, I’ve been with my boyfriend for almost two years, and we don’t know the exact details of each other’s finances, either. I know roughly how much debt and saving he has and vice versa. I have made it very clear to him that I am paying off my debt and not using my CC. I would like for us to have more money discussions, but it seems to be difficult when you’re just dating and not living together, engaged, or married. How much is really the other’s business when your lives are not really intertwined yet? I do know that I was absolutely APPALLED that he did not have a 401K or any retirement savings–he will be 40 next month! He did just sign up for a 401k, though, at my gentle urging.

  16. June 19, 2008 7:33 am

    @Bonnie – It is great that you at least convinced him to start–he’s way behind! It is a little hard, especially for people who are private.

    We aren’t engaged or living together. However, engagement talk has been thrown around, living together is planned for next year. So it is each others business, to an extent. But I also think exact numbers don’t matter much until it is at that point–we know enough that nothing will be a surprise!

  17. June 19, 2008 9:46 am

    If it makes you feel any better, Chad and I are over 5.5 years and engaged, but I don’t know exactly what he has and he doesn’t know exactly how much I have. We both know the rough amounts, and if asked, there would be no problem in sharing.

    Your best point was that you know your bf’s character. You know he’s not hiding massive debts from you, he knows you’re not hiding anything from him. As far as I’m concerned, the “Big Money Talk” is for people who have not even a ballpark figure how much their future spouse makes/owes/spends, and nothing will prompt that unless there is a formal conversation. You and T have nothing to worry about.

    And student loans are perfectly acceptable debt, it would be silly to pay them off completely when they’re deferred at 0% interest and risk not having liquid cash when you actually need it! Militant no-debt people make me laugh sometimes.

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