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.

  • Frat Man

    Joshua, I know we’ve touched on this before, but I have to get an ask- how many items do you throw across your office when you see authoritative sources write articles such as these?

    “Why Gold is a Must-Own Investment”
    http://articles.moneycentral.msn.com/Investing/top-stocks/default.aspx?feat=1807154&GT1=33002

  • When I was younger, maybe. Now? I realize that a free will market involves two sides to every trade. For every person selling gold, there is a buyer purchasing it from them. That means that one of those two people is right and one is wrong.

    In the case of gold, we have both owned gold and traded it through gold ETFs. The same for silver.

    No asset is “good” or “bad”. As Benjamin Graham said 80+ years ago, you must simply ask: “1. At what price, and 2. on what terms?” Those are the only two questions that matter. If I thought we were going into hyper inflation, I’d be buying farms in Canada, apartments in Hong Kong and gold bars in London.

    What I hate is that average people, who work hard and try and save there money, get convinced that gold is a good long-term buy and hold investment. They don’t understand the nature of the asset. As I’ve said before, with gold, you can either use it as a store of value or as a trading vehicle through which you can make massive profits or go bankrupt, especially if using commodity futures, which allow for 30-1 or greater leverage. If you knew gold was going to triple, a full-blown fully-leveraged nightmarish-ly risky position with gold futures could turn every $1,000 into $90,000. If gold fell by 10%, though, you’d have to sell your car, house, and first born child because the leverage would mean you lose 300% of what you invested, requiring you to come up with an additional $2,000 in cash for every $1,000 you originally put in the futures account.

    I don’t like trading for the most part because the annuls of the Forbes global list for decades has included thousands of business owners, entrepreneurs, and long-term investors but very, very few traders. The reason is that if you are wrong in a big trade, it can wipe you out whereas with a business mindset, if a single investment goes bad, it doesn’t do permanent damage. When Ray Kroc was rolling out McDonald’s restaurants, if one ended up failing, it didn’t take down the entire empire. A commodities trader doesn’t have that luxury.

  • Elisabeth

    Agreed. When you marry someone, you don’t just marry their debt – you marry their spending habits. Why would you marry someone whose values are the opposite of your own? You would be setting yourself up for more marital strife than necessary. Relationships are hard enough! But it goes both ways, meaning that as a woman concerned with carrying no debt and living below my means I would definitely veto a potential serious relationship with someone who didn’t share those values.

    Do you think that in general women are more likely than men to overlook serious debt when marrying?

  • I have to chime in here – because I also married with debt (my own) due to funding my own education (it was for a PhD degree, which I earned, but came out to $45,000 debt in student loans). It comes down to the REASON for the debt, plus the PERSONALITY of the holder of debt. When my husband and I got married, my husband’s immediate family were concerned that I had significant debt. In fact, one comment to my husband – which made him seethe and see red – was, “do you realize how much money she owes?!”

    So why did my husband do such a “foolish” thing? Well it sure wasn’t all lovey dovey. He’s an engineer with extreme logical thinking (and he had zero debt because he played it smart). He told me that he knew from my personality that I was a doer, and my fierce sense of independence was reassuring.

    He did not know this – but I later told him – before we got married, I actually called around some lawyers asking them how I could get a prenup drawn. They were completely confused when I told them that it wasn’t to protect MY assets, which I had none, but to protect my finance’s assets. I wanted to protect him from whatever debt that I and/or my relations may have owed. A few of them told me that this was the first time they’d ever gotten a call like this. They said not to worry since my debt was before our marriage and my husband wouldn’t be liable for it, and wished me well on my way.

    In fact, when I was still completing my degree and in a long distance marriage, my husband had to pay the full rent that was supposed to be split between us if I were living there. He had a roommate before, but in anticipation for my eventual arrival, the roommate was discharged. He never asked for my share or for repayment, because he believed this was the nature of how things go when you don’t know when you’d graduate with that kind of a degree. He even paid off some credit card debt I had that I got from trying to support myself on below-minimum wage (I was earning $15K a year as a grad student), to save me interest from the credit cards not being paid off.

    When I finally arrived to the state my husband was already working in, I drew up a balance sheet of everything I owed him, including the credit card debt he helped pay, right down to the split in rent from the month the roommate was discharged. Once I started working an entry level job, I wrote my husband a check and insisted that he deposit it. Within 2 years I paid off all $45K of my student loan debt. Then I went on to double my salary and triple my earnings a few years later when I started my business.

    My husband often jokes that our marriage was one of the best investments he’d ever made; and he sincerely is proud of what I’d accomplished and what we both have since accomplished together as a couple.

    • Andy G

      Right, because all women would make good like you. Just like Wendy Davis who got her husband to help get her through law school and literally days after he’d paid off the last of her student loans, she divorced him.
      You could look up solipsism, because you comment is about as solipsistic as it gets.

    • Larz0

      Jane, you story seems to serve the purpose of the typical female response of “But I’m not like that!” rather than do the reader any good. While your actions are to be commended, your case is the extremely rare exception. For every person like you, I’d bet there are 1000 who have drained their mate dry.

    • Wow !! thanks for sharing …..
      “but to protect my finance’s assets. I wanted to protect him from whatever debt that I and/or my relations may have owed”
      do you have a little sister 🙂 ….. if yes, can i have her number or something. 🙂 🙂

  • P.S. I’m now a stay at home mom – but this was a decision my husband and I agreed to as part of our family values. Side note – I have earned a 6 figure income or close to 6F income as a SAHM from the businesses I’d built.

  • Linda

    Someone asked if women would be more likely to overlook debt when marrying. I guess that depends on the woman.
    I married a man with debt. I didn’t find out how much he owed until after we tied the knot. The reason was that he didn’t even know exactly how much he owed himself until I went through his finances for him. I did feel the urge to smack him on the head. Once for having the debt in the first place (for furniture, TV, a car and a vacation), and once again for not knowing how much it was. He didn’t even know he was late on some payments and had overdraft fees on his bank account racked up that made my head spin. I got worried for a bit that there was a side to my husband that could mean financial trouble for me.

    Luckily, my husband is smart and he is the absolute opposite of a slacker. He just wasn’t thinking about money much and thus wasn’t applying his smarts there. But he felt that his debt was his responsibility and did not expect me to help him pay it off. And indeed he didn’t. But he did let me help him clean up his financials. He makes a salary as good as mine. He savvied up financially, he is even now a frequent reader of this blog. He got rid of his highest interest debt, now has an investment account, opened an IRA, puts money in a savings account, and I got him a phone contract that doesn’t bleed him dry.

    So all is peachy, right? No, it’s not.

    It still puts a strain on us that almost the entire remainder of his paycheck – after the portion we each put into our shared account, goes to pay off debt. It is still that much. Before the cleanup, his financials were unsustainable and he wasn’t even aware of it. The debt will be gone in a few years, but until then, whenever we want to do something out of the ordinary, be it a weekend trip or a new toy, he struggles to come up with his half. Which usually means, if I still want it, I have to pick up the tab, increasing his debt to me, until he can pay it off.

    We opened a business together a year ago and it is going pretty good. My plan is for our company to make an extra distribution to him to pay off his debt. Then, as soon as financials allow it, I can make the same distribution to myself. This way, we can save him paying interest, and bring us to a more equal level of monthly spending power. It isn’t unfair, because I would also make the same distribution to myself – eventually. My husband would not have it any other way.