Trying to teach my fiancé about money and financials

[run.minnie.miles]

I respect your opinion about debt, but it's a very extreme one. Debt is only an emergency if there is no income source, or the potential for the income source to be lost. Some people have debt but VERY secure jobs, and the ability to EVENTUALLY pay it off. This is what drives mortgages and credit cards and loans.

We have debt, but we also have a guaranteed income source, so I feel no sense of urgency to pay it off. I am being aggressive with it now because we have other savings goals for the future.

But, an emergency? Not even close.

Thank you for respectfully disagreeing. I think a mortgage v. a credit card is a very different type of debt of course and should have specified. I do believe that the ultimate goal should be no debt, as every $ of interest is taking hard earned money away.

 

[DaisyJ]

Thank you for respectfully disagreeing. I think a mortgage v. a credit card is a very different type of debt of course and should have specified. I do believe that the ultimate goal should be no debt, as every $ of interest is taking hard earned money away.

Once again, not everyone that uses a credit card has credit card debt.

 

[Westcoastwild]

Thank you for respectfully disagreeing. I think a mortgage v. a credit card is a very different type of debt of course and should have specified. I do believe that the ultimate goal should be no debt, as every $ of interest is taking hard earned money away.

Ok, that makes a lot more sense. Of course to GET a mortgage with low interest, you NEED credit history and for that you probably needed a credit card. Or student loans.

 

[run.minnie.miles]

Once again, not everyone that uses a credit card has credit card debt.

Couldn't agree more! I use mine all of the time but pay it off every month. I love the points and perks!

 

[run.minnie.miles]

Ok, that makes a lot more sense. Of course to GET a mortgage with low interest, you NEED credit history and for that you probably needed a credit card. Or student loans.

Yes- should have specified the first time, sorry. The best thing is that you can demonstrate the ability to pay off debt/loan.

 

[ceecee]

What kind of work does your boyfriend do for a living, that he needs a truck? Construction is the one I can think of off the top of my head that warrants a truck IF he has to haul lots of tools and supplies on a daily basis. If so, certified used is the way to go. I am with others on the board not to move in with him yet. You guys really need to talk and plan your future together. If he doesn't want to, it may be a deal breaker.
Good luck to you.

Even then, $40K for a "work" truck that gets messed up??? TOO expensive!

 

[dosekies]

For the above, he is a plumbing apprentice. Will be finished with his apprenticeship in a few years.

 

[Jen and Ashwin]

We do not have a date set. We knew and agreed from the time we got engaged that it would be open ended until we got more settled and are both still ok with that. We've also agreed from the beginning on a small courthouse wedding with just a little dinner reception after, so definitely nothing fancy.

So what do you mean by more settled? Your fiance has been working for over 5 years and has no student debt. It seems like he should be plenty settled. I think you really need to sit down, discuss your priorities and come up with a time line to move forward. In my experience, open ended engagements don't usually work out well because it usually means someone is dragging their feet. Is it him or you?

ETA: I am not trying to be judgmental. And I don't think its a problem to live with your parents while you pay down some student loans, but you need to communicate with your fiance and come up with a plan together. Will you feel ready in a year? Two? And what will happen when you are "ready?" Move in together? Get married? These are the conversations you need to have.

 

[dosekies]

So what do you mean by more settled? Your fiance has been working for over 5 years and has no student debt. It seems like he should be plenty settled. I think you really need to sit down, discuss your priorities and come up with a time line to move forward. In my experience, open ended engagements don't usually work out well because it usually means someone is dragging their feet. Is it him or you?

We got engaged while I was still at school. We wanted to wait to move out together until we knew we could afford it without living paycheck to paycheck, as rent around here is at least $1,200 (without most utilities) a month for a 1 bed in a safe area and we have a dog which makes it even harder. Once we can get our own place, we would get married.

 

[Westcoastwild]

Even then, $40K for a "work" truck that gets messed up??? TOO expensive!

I don't know, that's probably easily the price of a reliable, heavy duty truck. At least in my area, it would be hard to find a lightly used truck for considerably less than that. You're either looking at New or something that you'll be putting a lot of money into in terms of upkeep.

 

[Jen and Ashwin]

We got engaged while I was still at school. We wanted to wait to move out together until we knew we could afford it without living paycheck to paycheck, as rent around here is at least $1,200 (without most utilities) a month for a 1 bed in a safe area and we have a dog which makes it even harder. Once we can get our own place, we would get married.

When I got my first job, my rent was $1100 a month. I lived alone and made $40k a year. I didn't have student loan payments, but I did save $1000 per month towards a house down payment on top of my regular monthly expenses. I would imagine that between the two of you, you make more than I did. This makes me think that you could afford to move in together without living paycheck to paycheck. And if not, you really need to start tracking your spending and get a grip on it because budgeting is the only way you are going to know when it is feasible for you.

 

[kymom99]

I don't know, that's probably easily the price of a reliable, heavy duty truck. At least in my area, it would be hard to find a lightly used truck for considerably less than that. You're either looking at New or something that you'll be putting a lot of money into in terms of upkeep.

It depends on if he needs the truck for work or if they supply the vehicle. Also, a certified used takes a lot of risk out of buying used. I know used work trucks aren't that easy to find though. My dad was a farmer. He always bought a new truck, never a new car. Once he bought a used truck and it was a piece of crap. Never again.

 

[run.minnie.miles]

A good guideline for a vehicle purchase is the 20/4/10 rule. Put at least 20% down, no more than 4 yr loan, payments no more than 10% of income. Even better if you can put more down and pay off sooner.

 

[Albort]

i had a friend who i first met was a huge spender. For the longest time, when we go shopping, i always ask him if he needs it or does he want it. I think i asked him so many times, it rubbed off him and now he does it to his wife who is also a big spender... lol

 

[DLgal]

We got engaged while I was still at school. We wanted to wait to move out together until we knew we could afford it without living paycheck to paycheck, as rent around here is at least $1,200 (without most utilities) a month for a 1 bed in a safe area and we have a dog which makes it even harder. Once we can get our own place, we would get married.

I hate to break it to you, but a LOT of people live "paycheck to paycheck" forever. We have been married almost 17 years, and we have 2 kids. We STILL live paycheck to paycheck (although we fund IRAs, a 401K, two college savings plans, and investments). We use up everything we take home, in some way or another.

$1200/month for an apartment is VERY low, especially for two people working full time. You should easily be able to afford to live on your own. Most people spend 20-30% of their take home pay on housing.

If this is out of reach at THIS point, you need to reasses where your money is going every month.

 

[Westcoastwild]

It depends on if he needs the truck for work or if they supply the vehicle. Also, a certified used takes a lot of risk out of buying used. I know used work trucks aren't that easy to find though. My dad was a farmer. He always bought a new truck, never a new car. Once he bought a used truck and it was a piece of crap. Never again.

Yep. Exactly the same for my farming relatives. The truck is a workhorse, and people work those until they're gone generally.

Although I'm not saying that the guy in question needs it. I'm kind of assuming it was a shiny new toy. But was just responding to the poster who said that was a ridiculous price for a work truck. It isn't.

I have the feeling that to the OP, a decent price for a vehicle is less than 10k. You can't get a reliable work truck for that. 30-40k is what you'd be looking at (at least where I live) because there just aren't certified preowned ones suitable in the area. It's brand new or junker.

 

[Westcoastwild]

I hate to break it to you, but a LOT of people live "paycheck to paycheck" forever. We have been married almost 17 years, and we have 2 kids. We STILL live paycheck to paycheck (although we fund IRAs, a 401K, two college savings plans, and investments). We use up everything we take home, in some way or another.

$1200/month for an apartment is VERY low, especially for two people working full time. You should easily be able to afford to live on your own. Most people spend 20-30% of their take home pay on housing.

If this is out of reach at THIS point, you need to reasses where your money is going every month.

Yeah. Part of adulting is that you figure out what you CAN afford and live accordingly. Smaller place, or less than desirable neighborhood, or somewhere out of town. Or cut other expenses.

To put it in perspective, I think on my first apartment I was paying 550? That's not splitting it. It wasn't a newer place. It's just that I had to live in town because I knew I could not afford gas, rent, and a reliable car. And that was on minimum wage. So easily 50%.

We got engaged while I was still at school. We wanted to wait to move out together until we knew we could afford it without living paycheck to paycheck, as rent around here is at least $1,200 (without most utilities) a month for a 1 bed in a safe area and we have a dog which makes it even harder. Once we can get our own place, we would get married.

Consider 2 things

1) most people do not stay in the same house or even town for 30+ years. So let's say you buy your own place. And then either of you get a great job offer in another state. You're going to have to sell your house and rent. And you're going to have to make that work with your budget.

2) who pays for the dog? Food? Vet bills? Dog sitting? Because I bet the two of you aren't splitting that as it is. Either your parents are involved or his parents are involved or there's at very least an unequal division of labor. I mean unless that dog stays one week with you and the next week with him and you switch off.

My point is that dogs and rent are something you've got to account for in a real life budget. They aren't something that can be "too expensive" as an adult. Because 1) you need a roof over your head and 2) you need to care for and feed your dependents. Like you can downsize your house or spend less on groceries and other supplies but those are items that exist.
$1200 dollars and vet bills are nothing compared to house renovation and braces for the kids.

 

[mustinjourney]

A little backstory: I am 24 and my fiancé is 23. We both currently still live at home until we can afford to get our own place. Luckily, we live within 10 minutes of each other and both of our families are ok with us staying over so we are together very often.

My parents raised me to think about money and how I spend it. I make sure to budget and save what I can and do not make big purchases without thinking about them first. I graduated college 2 years ago with about 60k in student loans. Since then, I bought a great used car for about 15k which I paid off in 10 months and have also paid about 15k towards both of my loans. Personally, I think that is a pretty good start for me!

My fiancé's family is the exact opposite. They seem to buy what that want because they want it and worry about paying it off later. They go on vacations that they can't afford and then complain that they can't fix what they need to in their house. It bothers me so much!!!!! My fiancé currently has a motorcycle payment that he still owes a decent amount on, but he also needs a new car. I am trying to get him to understand that he cannot afford a nice truck or jeep like he wants. He needs to get something that will work for him, but that he can also afford to pay for. We are trying to get married and move out, so a 40k car isn't really realistic for him because he does still have that motorcycle payment too. But every time I think I'm getting somewhere with him, his dad comes in and brings him back to 'oh you need a truck' without thinking about the financial aspects.

How can I get him to see that he can't afford it!? I don't understand how his family thinks this is ok!!!!

Get this fixed on the front end...and make sure you are aware of how much debt he truly is in. The day before my sister got married, she probably had $30-$50k in savings (she was a teacher and was around 31 years old) with no debt at all (no house or car). She was incredibly frugal and saved a lot.

Her husband had just graduated with a PhD in Psychology. He told her he had about $70k in student loans. Turned out it was closer to $125,000. He was also a complete moron with finances. Bought a brand new mustang GT after graduating (still didn't have a job offer). Oh, and they were living in Los Angeles. So the day after marriage -- they were in the hole a LOT of money.

Long story short -- after 8 years and two kids later -- they're more or less living paycheck to paycheck and if not for MY parents and brother in law, the student loans would likely still be over $100,000. No idea what they're down to -- b/c my dad refuses to tell me how much he has paid off on them (again -- he's paying money on his son-in-law's education. dude's parents are just as broke as he is apparently. Shocking. Side bar -- my parents did not contribute a dime to any of our educations -- so the fact that they're paying for the son-in-law's is a bit crazy), but they do it b/c of the grandkids and the crazy amount of stress it has caused on my sister.

I echo the Dave Ramsey book. It's not meant for some people -- but for most people that are financially illiterate -- it is a great book.

 

[azdisneylover]

For the above, he is a plumbing apprentice. Will be finished with his apprenticeship in a few years.

Wishing him the best with the apprentice program. I will suggest again to google certified used trucks in your state (or country) to obtain a truck that has a warranty. Construction work is fickle. Feast or famine. It makes budgeting tricky. Good luck to you and I wish you and yours the best.

 

[crisi]

I agree with this. Debt is a tool in modern society. It actually benefits you to have it. It's really difficult to do things like rent an apartment without a credit rating. And that rating is based on history of debt- proportion to income, proportion of credit available, how long you've had the debt. Paying your credit cards off and then cancelling them actually makes your credit score worse.

There are five kinds of debt (some debt fits into multiple categories)

• Debt for things most people can't pay for out of pocket, but are necessary - mortgages. Maybe student loans. Maybe cars. That's fine
• Debt for things you want or need that you pay off every month - credit cards - that's fine if you have the discipline.
• Debt you take on when you sign a contract - cell phone, cable, car leases. I don't like these myself unless they are relatively small amounts.
• Debt for things you want that you don't pay off every month - not need, want. Credit card debt. This is into the "warning, Will Robinson!" range. It may be manageable, but you are paying very high interest rates because you needed that tube of lipstick.
• Leverage. If you can afford to pay cash for something, but the debt is cheap and the money can be invested elsewhere, you are basically getting free money off the delta. This is IMHO the only kind of good debt there is. And its how the rich get richer