Kennon-Green & Co. Fiduciary Financial Advisor, Wealth Management, Global Value Investing

There was an article three weeks ago in The New York Times that began with the following paragraph:

Nobody likes unpleasant surprises, but when Allison Brooke Eastman’s fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days. [snip] (The story goes on to say that Allison owed more than $100,000 due to the cost of her education.)

When, exactly, are you supposed to reveal a debt of this size during the courtship? Earlier than you’d disclose, say, a chronic illness?

Women in debt are less likely to find a mate

If you are in debt, the odds of finding a financially successful mate are slim to none because people who believe in living frugally, saving their cash and being disciplined with their investments aren’t going to want a spouse that they have to struggle against constantly. Life is hard enough without having an enemy at home that doesn’t share your goals. Image © George Doyle/Valueline/Thinkstock

There were a few commentators that were just aghast that the fiancé would end the engagement and break off their relationship entirely.  Yet, a vast, overwhelming percentage talked about how they would do exactly the same thing, no questions asked.  In fact, that seems to be a very common response in men: They aren’t willing, even for love, to get saddled with years of black hole payments when their money could be going, instead, to buying a home, season tickets to their favorite sports team, a nicer car, and investments.

The answers got particularly brutal – almost downright vitriolic – when the debt belonged to the woman and she insisted that she wanted to be a stay at home mom at some point in the future.

My question: Is this really a surprise to anyone?  Allison actually said, “But it had never occurred to me that this is something that might end up being a deal-breaker.”  Seriously, Allison?  You think Prince Charming is going to pay off your massive student loans because he loves you?  You don’t understand men at all.

I realize that I fall into the stereotypical guy response here and part of that has to do with genetic brain wiring and gender but there is no way I’d marry someone with a huge debt load and no assets regardless of how high my income or wealth was at the time.  I mean, $2,000,000 against a much more valuable apartment building in Illinois?  Sure.  Fraud victim?  Yeah.  Prior bankruptcy?  Probably.  Medical school loans to become a neurosurgeon?  Of course.  But $100,000 in student loans with $20,000 in credit card debt and a job paying less than $50,000 per year?  Not a snowball’s chance in hell.  You’d be starting out behind the eight ball, with a huge percentage of your own paycheck suddenly disappearing overnight for liabilities that were incurred before you even knew the person.

[mainbodyad]With a few notable exceptions, people are drawn to others who “get them”.  Someone who is financially successful isn’t going to want to have to struggle against a spouse who is hemorrhaging money on meaningless, worthless stuff.  In The Snowball, Warren Buffett talked about how he dodged a bullet because he almost ended up with a woman who would have been a disaster and, had he married her, none of us would even know his name.

In other words, it’s not about the money.  It’s about decisions, choices and character.  If you can’t manage your own affairs, how will you manage it when it’s “our” money and there are kids involved?

In the case of our New York Times story, you have someone who is now stuck under interest and principal payments on student loan debt for a photography degree.  Had she instead taken the money and put it into a photography business, which is a field that does not require a college education, she would be vastly ahead of where she is now.  She should have gone to a lower-cost school for something like marketing that would have benefited her core passion, become a great photographer, and used her skill set to support her newly founded firm.

It will take decades for her to get out of this mess unless she does something intelligent.