Getting married soon and I really want us to get off on the right foot. We are coming from two different spots financially. I currently own our home, a rental, no debt beside those and have a healthy savings. She is coming with little savings and about 40k of student loans (4 fedloans all at about 6%). There is no animosity or anything, but I def think about our financial future and goals more than she does and take that “CFO” role. While we do work as a team, it is probably me going to decide how to move forward.
So my question for you, is how would you look approach this? Would you tackle the student loan debt first (I was thinking maybe a Dave Ramsey snowball approach to the 4 loans)? Just pay minimums and look to pick up more rentals (which is also more of a goal of mine, but she is good with it)? Try to get some equity out and pay some off (we cant get enough for all the loans)?
We have options, but just want to see how you would try to tackle this as a team.
Thanks for your help
Mark, if I didn’t know any better I’d say you were rehashing my life exactly. I’m proud to say that this September we will celebrate 15 wonderful years of marriage. Even before we were engaged, it was clear we were coming into the marriage from two different financial situations. She was already working as a professional and I was scraping by to start a business; so, while I may not have had any debt, I certainly wasn’t cash flush.
Our first obstacle was the expense of our wedding, for which we were responsible. Not wanting to add any more debt, I led the charge of setting a goal of $24,000 and having us each contribute the amount necessary to reach this goal every single month. It wasn’t easy. Each and every week, we would sit down with our wedding binder to look over the budget and plan accordingly. There were some heated discussions around that table for sure; however, over time, we were able to slowly tackle the goal until it was all accounted for and our wedding was delightful. Whether it’s paying off that first credit card or a wedding, I think setting a goal as a couple, working towards its success and then celebrating the win is what made the difference for us, and it will set the stage for you. I agree with your subtle suggestion, take the Dave Ramsey approach and debt snowball those suckers however that is actually the easy part, the hard part for you will be the psychology of the entire situation.
I think the first thing I can say is that you must really, truly OWN the entire package of the financial circumstances into which you’re marrying. While you mention there is no animosity, which is good, there literally CAN BE NO ANIMOSITY at all. Let’s face it, you’re human so at times, when you’re taking the emotional lead on your debt reduction plan, you’re going to feel frustrated that you’re not farther along in your financial goals. It’s at that time when you’re going to have to shelve any and all negative emotions and move on. You cannot, I repeat CANNOT, hold any of the financial debt over your wife’s head, regardless of whether you’re in the process of paying it off, have it paid off or are even 20 years down the road after being debt free. When you say I do, this debt is yours as well, and no longer is it what you have or what she has, but it is yours together. This means no negative comments, sighs or even the slightest innuendos. She may already feel guilty bringing this into the marriage, you cannot compound it when you get frustrated or discouraged. While it may give you that slight release, it will not be healthy for the marriage. Trust me when I say, I learned this first hand.
I think the key for me and my wife was the fact that, while I took the CFO role, she played, and continues to play, the supporting role very well. To this day, I’m sure she feels like I’m sometimes over the top when inputting our expenses, tracking each dollar, allocating for various projects, expenses or goals; however, the net result for us has been that, through our teamwork, we’re completely debt free and live in our dream home, while she has stayed home with our children since we brought our 12 year old home from the hospital. Since the team is working well, there’s no reason to change it.
Your question spoke to me because, as I mentioned, it was precisely my situation. I’m glad you wrote in because I can promise you, your future success will be more about how you handle this situation than how your wife handles it. Take the lead in your finances, do not hold anything over your wife’s head at all, respect her for her incredible qualities and remember all the reasons you love her. After 15 years of marriage and a total of 22 years dating (yeah, that’s another story altogether), I can honestly say I am thankful my wife is exactly who she is and I’m happy to take the lead on all of our finances.
In conclusion, I think the only challenge you’ll have is lovingly explaining to your wife how important this area is to you. Trust me when I say, there will be things that are important to your wife that you may think are silly. Just as important as it is that your wife respects the level of importance you feel about money, will it be for you to respect whatever it is she feels is important. Work together to discover these areas, respect each others’ differences and, no matter what, put love ahead of any and all challenges.
Congratulations on the marriage and let me know in a few years how it’s going!