Before I was married, I never gave much thought to debt in marriage. I didn’t have any debt, and I just expected I would marry someone who didn’t have any either. I figured I would marry someone who was wise with his money, like I had been with mine.
That just happened to be the case. We married and started living happily (and frugally) ever after. Six years later we had six figures of student loans that we can call our own.
Thankfully, debt in our case has been pretty straightforward. However, in many situations debt complicates and corrupts relationships. Financial problems are a leading cause for divorce, so I think discussing debt in marriage is worth our time.
Let’s take some time to discuss how we define debt ownership in our relationships.
YOURS and MINE
We all bring strengths and weaknesses to our relationships, both financial and otherwise. While it’s common to merge accounts that are in the black, some have different feelings about combining accounts that are in the red. I know of couples who go into their relationships each with their own debt. Spouses work separately to each pay his or her own debt off.
Sometimes the one partner that brought debt into the marriage strives to pay it off alone for years without the help of the other.
YOURS and MINE Becomes OURS
In other cases, couples pool their debts as they would their assets. They work together to pay off their combined debt, then move on to other financial goals. Even when one of the spouses is debt-free, he or she helps to carry the burden of debt for the other.
OURS by Mutual Consent
In a comment recently, a reader talked about me working to pay off my husband’s debt. That took me by surprise. While the loans are certainly in my husband’s name, I always refer to them as our loans. Together we have undertaken over $100,000 in student loans to put him through law school, but those loans also fed and clothed us and put a roof over our heads. Those loans allowed me to stay home with my little ones as I had always planned to do.
We are in this together. They are our loans.
OURS Not by Mutual Consent
On first glance, you’d think that once you’re married that all future debt is shared. When you’re on the same page financially and have mutual goals, then what is ours is probably clear. It’s less clear who bears the responsibility when one spouse develops habits that rack up debt without the other knowing or against the other’s judgment. What about when communication fails and trust is broken? Does the ownership of the debt change? Should it?
It’s Your Turn!
As in all Debt Discussions at Six Figures Under, it’s time for you to share your experience and opinions. Let’s learn from each other to improve both our finances and our relationships. Here are a few questions to get you thinking.
- Did you (or will you) think about who is responsible for debts your spouse brings with him or her?
- As a couple, do you (or did you) consider your debt separate or combined?
- What are the benefits and drawbacks of labeling your debt as yours, mine, or ours?
- Is one method (combining or keeping separate) healthier for relationships?
- Does the best method change depending on the type of debt?
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I’m going to dissent a little bit, and say that separate finances works great for our situation. I spend the money I make on the things I want and he spends the money he makes on the things he wants. We each have the things that we cover for the house. But, I am very interested in paying off “my debt” and he is not as worried about “his debt” so I don’t want to waste time and interest getting him on board. That being said, we have similar spending habits (no credit card debt, like to shop around for a good deal, discussions about spending large sums of money/lending to friends or family) and the same goals (retire by age 50 – which to us means that we don’t HAVE to work, travel like it’s our job, etc). He also is picking up some of the burden in relation to entertainment expenses that I don’t want to spend my money on. It’s not for everyone, but it works for us.
That’s sounds great Amy! Separate finances is working well for both of you! 🙂 There’s nothing wrong with that!
My husband and I tried the whole “separate” thing before we were married. And trust me we had discussed for years how to deal with “my” extremely large student loans without punishing him. But all that did was punish me instead. He’s effected no matter what so he mine as well have a say. So when we got married we decided that we’re in this together. We’ll either win together or lose together but no matter what we’re doing this together. Its harder when one spouse brings all the debt to the marriage and it wasn’t accrued together. The idea that on our wedding day he also signed his name to six figures in debt wasn’t an easy pill to swallow. But when you really love someone you’ll be surprised what your willing to do. And its funny when you learn how to communicate and find common ground in your finances… you’ll find it touches every other area of your marriage as well. Sallie Mae can take our money but she’s not taking our marriage. Despite how we got here, we’re in this hole together…and together we have twice the manpower, and twice the income to kick ol’ sallie mae to the curb once and for all.
I love your attitude Kate! I’m so glad that your husband is on board and that you are a team. There is serious power when couples are united in accomplishing an a huge goal. And you’re right that it spills over into other aspects of life too. 🙂
This has really got me thinking. In our blended family, yours, mine and ours usually refers to our kids. Now that I think about it, my husband and I have done a far better job blending our family than our debt. Debt that comes from previous marriages brings with it a whole new set of baggage. Thanks to all here for making me realize that it’s time to focus in and attack our debt as a team. (I blog about blended families at liveloveblend.com & you can bet there will be some money/debt blogs coming in the very near future)
I’m sure that finances with blended families can get really complicated, even more so than just with two people who get married for the first time. Either way, there is real power in working as a team to conquer your debt. Best wishes Andi! Thanks for sharing!
I am very “old fashioned” about this particular discussion. I 100% do not believe that having finances seperate while married is a wise choice. I KNOW there are plenty of people out there who will disagree, and that’s ok, but when it comes to my marriage we share it all.
Why? Enter a friend of mine who refused to accept her “husband’s debt”. Granted he made bad decisions regarding credit cards more than once. He didn’t learn his lesson. However, when it came time to refinance the house, she soon discovered that “he” was $50,000 in debt and she didn’t know about it. Loan declined.
Had they simply taken the time to have a dialogue, had they worked as a team instead of his and mine, their story would have been very different. If they combined their finances the debt likely wouldn’t have happened because he would have been “caught” before it was out of control.
Every person I know who has had their finances seperate have had money issues and dishonesty in their relationship. It’s not worth the risk to me!
I guess we’re old fashioned too. For us marriage is becoming one and sharing everything!
Thanks for sharing your insight and experience Jill!
We only had mortgage debt when we married so it was easy to consider them both ours. In fact, throughout our marriage, everything has been shared. I was the primary breadwinner for awhile when my husband went back to school.
I’ve been thinking about this situation though and wondered what is the best way to handle it? A couple both bring debt to the marriage, let’s say his is greater and let’s say she has the higher income. How do they share the expenses? 50/50, prorated on income, one big pot? Likewise how do they pay the debt? My daughter has started living with her boyfriend and she is in this situation.
That’s a tough scenario. For me, marriage is the clincher. If you said that your daughter and her boyfriend were getting married, I would definitely say their income should be one big pot since they are one, but just living together makes things complicated. I guess maybe it depends on their level of commitment, which means no one can decide it for them, and even then the level of commitment may be different with each of them. That’s just my take. Good question!
A great post – and as always, very thought provoking!
The debts that my husband and I have and are currently paying off were accrued by both of us. However, I feel the same way as you…if one of us had had an individual debt, we would both be actively working to pay if off and would consider it ‘ours’.
Fortunately, in Australia, university level education doesn’t usually result in a huge debt. I always think that it’s incredibly unfair in the US that you have little choice but to get large student loans. Seem like a huge burden for a person to have, as they start out in their chosen field.
My husband and I merged our finances very soon into our relationship, which always seemed to take others by surprise. It never felt at all risky to us, however, as we have always shared the same goals.
Maybe we should have gone to Australia for school. 🙂 That sounds wonderful to get a good education and start a career without a load of debt holding you back.
As long as you trust one another (which hopefully you do if you’re married!) and have the same goals, then I think it makes sense to combine and be one.
When my husband and I graduated, we worked on “our” student loan debt. Together our spare money went to the highest interest loan, whether it be mine or his. BUT when we started the home buying process, he wanted to pay more than I was comfortable with, so he contributed more to the down payment from an investment that was given to him as a child. Even though I consider the debt ours, I don’t consider his IRA or Roth accounts to be ours (mostly because they were given to HIM from his dad). I think it would be an interesting topic for you to discuss investments… if they are ours or yours.
We’ll have to talk about investments sometime. In our case, like our debt, our investments are shared as well. Neither of us have inherited (or been gifted) anything substantial and we didn’t bring any investments into our marriage, so our everything we have we’ve acquired together. Even so, I’m sure they would be shared.
That’s nice that you worked together on your debt and just paid the higher interest debt, no matter whose it was.
My husband and I both brought about the same amount of debt into our marriage. He worked to help me pay off my school loans first and then I took a second job to pay off his car. It was definitely 50/50.
That is why now we will never go into the loan game again! It took a good 3 years to get it paid off.
Great job getting working together to get everything paid off Michelle!
Thankfully the Husband and I didn’t really have to worry too much about this when we were first married. We did both have credit card debt, but lived solely on his income to pay it all off and start an emergency fund. For the most part, we’re in it all together. I think it really depends on the couple, their relationship and the temperaments of the individuals.
I think you’re right. It really depends on the couple and their relationship.
My husband and I each had our own debts when we met. It was only after we married that we decided to pool our debts and work together and for us this has worked really well, as it meant that at last we were on the same page. We only have debt in my husband’s name left now, but to me, it’s my debt too. We’re a family and the debt is ‘ours’ for us both to get out of!
Being on the same page makes such a difference! I think it really helps to be on the same team to tackle each other’s debt. You’re getting so close!
I’m not married but when I do, regardless of how much we have to our name (assets, debt, etc), I plan to have combined finances/ combined everything. If I am to share a future and the rest of my life/dreams/goals with this person, I should also definitely be able to share my (his) money. We’re working towards one life, so this should also mean a combined financial means of doing so – debt and all.
Definitely! That was our plan as well. It helped that we had similar views on money and spending too. I think we are so much better equipped to handle bumps in the road because we are unified.
I tend to think of my loans as, well, mine. My husband paid my living expenses throughout law school, while he was living abroad. The mortgage on his house in Scotland is his. Not that we don’t both support each other in paying them off, but we also have separate finances.
It’s a matter of practicality on our part. We live abroad, my employer is a US entity, I’m a US citizen, so I’m taxed. My husband isn’t a US citizen and doesn’t get taxed at all. If we combined anything in that bank account would be reportable to the IRS. So we keep things separate.
My salary goes toward loans and childcare. His salary goes toward living expenses, savings, investment and the mortgage.
It sounds like you have a pretty unique circumstance! That’s great that you are supportive of one another even though you have separate finances.
Great post! As another commenter stated, when we got married we became one. So we think of pretty much everything as ours.
My husband had some debt when we married. Yes, it was ‘his’ but it quickly became ‘ours’ to deal with and pay off.
That’s great that you were able to team up with your husband to tackle the debt that he brought into your marriage.
We didn’t have debt because we were so young when we married but we have never considered anything mine or yours. Everything we have is ours. He worked so that I could stay home with the kids but it is our retirement. He wouldn’t have been able to do half as well at his job without my support and I wouldn’t have been able to homeschool without his. We truly trust each other. That being said not all relationships are like that and trust can be a huge issue with money. If it was anyone but my husband I know I would look at things differently.
My husband says the same thing– that he does better in his job because of me. Having a wife and kids to support provides more motivation to work hard than anything else.
Just to chime in on this: Whenever I feel like I am not contributing enough (because I don’t bring in any money), he reminds me that he could not work without my taking care of the kids…this thought makes me feel better like I am at least saving us daycare costs which are outrageous!
This is just my personal opinion, but when I got married, I became “ONE” with my husband. So we gladly share EVERYTHING, good and bad! 🙂 I took his last name, so why not take on his debt? Like you, Stephanie, the ENORMOUS school debt my husband obtained is what allows me to stay home and raise our children and is what pays our bills. So, I TRY to have a good attitude about it and also just be ever so thankful for job security, as that is so hard to come by these days and priceless. I also believe it’s important for married couples to combine finances because if the two of you are working TOGETHER on a common goal, usually you can blow it out of the water MUCH faster than if you are working on separate goals. Again, just my outlook! Neither of us ever had credit card debt or any other kind of personal debt (save car loans which we both had), so I guess it was easy for us to combine finances and not look back.
That sounds like us too. We never really discussed “yours” and “mine” (with debt or anything else) because we had the mutual understanding that in marriage we would be one.
We aren’t married yet, but my boyfriend and I have had several discussions on this. We both have student loans and are currently working separately to pay them down. I have a lower balance, but he makes more, so we honestly don’t know who is going to end up paying off first (there’s a difference of about $6k). We agreed to help the other when one of us becomes debt free. We don’t really want to get married until they are paid off, this way we can start without any debt. Plus, we’d like to be able to pay cash for the wedding, and student loans would be a hinderance.
Everyone does have different opinions on this, and it’s interesting to read about how couples manage their debt. I really liked your explanation of how your husband’s student loan debt is a joint responsibility.
That’s great that you’re going to help each other when you are done with your own loans. If you enjoy fun competition, you could have a race (though for some couples this wouldn’t be a good idea). For us, a little friendly competition is motivating.