DH has a loan. WWYD?

[qui]

(long time poster, first time anon post)

My DH is currently working freelance, he brings in a really small income from that but doesn't want to work a 'real' job because he keeps thinking the project he is on is always the next big thing. . . He does not make enough to sustain himself or our family. I am the primary breadwinner and also am working freelance. We both work from home.

He has two masters degrees. His second masters he had to take out (unsecured) credit line to pay for. He did this before we met. He has not been making regular payments on the line of credit for about a year as a result of the economic situation hitting our field pretty hard and the bank is now getting nervous. They are requesting he pays back about 50% of the credit line immediately or they will basically report him as well as turn it over to a very high rate loan (like 15-20%).

However, my DH is not a saver, he literally has no money to his name.
He tends to spend every penny he has access to in both his account and our joint account. He comes from a rich family but was 'cut off' when he was in his mid-20s so he never learned how to live frugall . He is not aware of the cost of something, for example, in the grocery store unless I specifically ask him what it cost before he puts it in the cart. I find all of these things slightly frustrating since when we first met our joint account was very healthy and now its in the negative most of the time. Literally. He does not plan for the financial future in any way.

However, I have been saving aggressively about 30% of my paychecks for about 5 years now in my own personal account. I have enough cash in my savings I could pay off his loan (or buy a car or a boat ). However, if I did pay the loan off, we would have no 'emergency cushion' and I also fear DH would not 'learn his lesson' in terms of his spending but I know if I don't offer to help him, he will be in a very very bad situation with our bank and possibly it could have long term consequences for us (say if we ever want to buy a house). . I have considered offering to help pay some of the loan or part of the loan. I have been thinking about this for weeks now without being able to come to any sort of conclusion. I feel guilty if I help him and guilty if I don't.

What would you do in this situation? If you are the breadwinner and your DH really needed your help but the situation he put himself into could of been prevented had he of thought ahead-- at all.

[honeybunmom]

I am in this situation. When we married, my dh was finishing school. That was almost 7 years ago. In the meantime, we bought a fixer upper and during the first phase of that, he dropped the last 4 classes he was in and needed for completion. We just moved in last October. Many thousands of dollars later. Much more than dh had estimated and yes, this purchase was his idea. But, I digress.

When we got married, I paid his debts because I thought that was the right thing to do since we were married. We bought the house 1 year after we married. We had a joint account at the time. Shortly thereafter, he cleared out the account for something house related that he did not discuss with me and I thought we agreed the money would be used for something else. I stopped contributing to the joint account at that time. He linked his cc to it and the account is constantly in the red because he's got nothing in there to make that ach payment.

Then, we had an IRS refund garnished because he had a student loan he did not pay and did not tell me about. His lame excuse was that they never got back to him about the deferment.

To make a long story longer, I'd probably pay it. Since you're married, it could impact you. That house we bought is just in my name because his credit was too crap for him to be involved.

I try to take the long view and really lean on my spiritual beliefs with respect to my marriage and my responsibilities in it. It's up to me whether I feel taken advantage of. And, really, I'd much rather be in my shoes than in his because I don't have to look to anyone other than myself to bail me out of messes. Oh, that's right, I don't get into those kinds of messes! [But if I did, say, get screwed in this economy, I'd have the goodwill built up with my mother to rely on ]

[qui]

And, really, I'd much rather be in my shoes than in his because I don't have to look to anyone other than myself to bail me out of messes.

I sort of share this view.. but I find it discouraging that my DH would do this, esp because it puts me/all of us in a bad situation. I know I only have me to rely on, ditto DS. . I just sometimes wish I wasn't the only adult.

Sadly, I saw it coming and I could kick myself for not saying something two years ago about this. lesson learned.

I guess I am just afraid if I help him out and pay it off, its going to continue the cycle and we'll never get anywhere.

[astar326]

when i met my dh he had a few unpaid cc's and a school loan (his bio-dad was court ordered to pay for his college, but took out a loan in dh's name and never paid it). after yrs of lawyers not being able to work it out i just paid off what he owed. after that he entrusted me with controlling our finances. he is really good about asking before spending. so if i had to do over i would pay it off again prob sooner.

[blessedwithboys]

i would not pay it, i would separate all of our finances and worry about myself and my kids. but i'm a bitter divorcee, so take it fwiw LOL

[Vaske]

I think you should not offer to pay. So far it is his problem, and it needs to BE his problem more than yours. If he asks for help with it, then you can start working out a plan with him. Maybe the bank would accept less than 50%. Anyway, credit scores can be improved later. It sounds like you have marriage work to do right now.

I think, if you're going to keep him, that joint finances would work out better than separate. You could manage the money and gave him back some of his earnings to blow, instead of all of them.

My husband too is horrible with money. But (as his mom just told me) he is humble enough to admit it and to learn from me and to let me say "No, we can't afford that right now". He would be hopelessly broke if he were still single.

There's a benefit for me as well: he balances out my natural stinginess and helps me to spend a little money on fun stuff.

[SeekingJoy]

I wouldn't pay it. This coming from someone in a great marriage with completely co-mingled finances. It doesn't sound like you can fully trust your DH as an equal marriage partner. For me it wouldn't be about teaching DH a lesson as much as limiting my exposure to the consequences of lazy and irresponsible decisions.

[velochic]

Until you see that the core of his problem - his spending habits - change... and for a long period of time (like years), I would not spend a dime toward his debt. He will get you both in the same boat except then you will no longer have any emergency fund plus a load of debt. I would be very careful about how to proceed. I am usually of the opinion that finances/decisions be 50-50 in a marriage, but in this case, I think you need hold the reins, and hold on tight. He will pull you down with him.

[Delicateflower]

If you are planning to stay with him, I'm pretty sure your credit is intertwined with his? As in, they can come after you for his debts?

If that's true, then it's time to treat him like a child, because he's harming your family with his irresponsibility. I think you need to lay down the law. Pay the amount of the loan that you need to to not get the higher rate for him, but as a condition of doing that, take back the checkbook, credit cards and debit cards and put him on a cash budget. Maybe you need to divide up the household expenses and have him pay you 50% of them, then he gets his cash to spend. And pay the bills in front of him every month.

This is coming from the partner who is worse with money, and so I have myself on a cash budget, and all the bills automated.

[laohaire]

I guess I would ask myself what my goal is, what do I hope to acheive.

If it's to get him to change his ways - well, you can't really do anything to do that. But if that's the bottom line of what you want, paying the loan will not acheive that and probably even hinder it. You can't count on NOT paying it getting him to change his ways, but it's the better choice for your goal.

If the loan is stressing you out and you don't want collectors calling the house and that's your bottom line, then paying it is the best way to acheive the goal of reducing that particular stress.

Or maybe your bottom line is something else, but I guess I'd start by identifying it and going from there, to decide what you should do.

Some people can live with this kind of financial irresponsibility, and they'd feel better just paying for it and letting relative peace reign.

For others, this would just eat at their soul. Such people should not use their hard earned/saved money this way, and instead should keep it where the spouse can't get at it. If you are this person, unfortunately you'll also have to examine the question of whether you can live this way forever.

This would honestly bother me a whole, whole lot. I would feel extremely resentful to have a partner that prevents our household from acheiving any stability or security. That my sacrifices would amount to nothing. Not bringing in major bucks is not a big deal at all to me, but SPENDING all our money like that (and more), I just couldn't live with it. But that's me and it may or may not reflect your feelings. So try to figure out what the bottom line is for you, and act from there.

[doubledutch]

if you "rescue" him, he will never change. this is why his family cut him off. he has two master's degrees so it's time to for him to put his earning potential to good use instead of holding out for that big project that never happens. i think he should have to do whatever it takes to come up with that money.

if you ultimately decide to pay it (or pay the half that the bank wants), i think you should do it on the condition, in writing, that your dh agrees to get a job and pay the family back, and then continue to contribute to the family's finances once he has replaced the savings.

[SleeplessMommy]

I am with Velochic on this one. Put a bit of your emergency fund towards joint counseling to see if you can get him to stick to a budget and look for FT work.. i.e. be a team player in the marriage.

[weliveintheforest]

I would pay the half that the bank is demanding, but I would have a really serious talk with my dh, preferably with a counsellor.

[eirual]

I think a spend-a-holic is much like an alcoholic. If he had issues with drinking, would you pay off his keg or buy him liquor?

I wouldn't pay it off for him. I'd let the harsh reality of his actions hit home and get him off his tush and bringing in a real income. He can get a real job while keeping his projects on the side. I think I'd draw up a plan, let him know what he has to do to make it work (lead him to it or give him a chance to figure it out for himself if you can) and expect that of him.

Tough situation. Good luck!

[Shellie]

Originally Posted by doubledutch

if you "rescue" him, he will never change. this is why his family cut him off. he has two master's degrees so it's time to for him to put his earning potential to good use instead of holding out for that big project that never happens. i think he should have to do whatever it takes to come up with that money.

if you ultimately decide to pay it (or pay the half that the bank wants), i think you should do it on the condition, in writing, that your dh agrees to get a job and pay the family back, and then continue to contribute to the family's finances once he has replaced the savings.

Yes, yes, yes and YES! This is exactly what I was thinking but I lean toward option 1 above. My mom secretly saved like you have and she ended up spending the $$ to bail my dad out when he got his business into financial trouble. More than once--he never learned his lesson and they have nothing and she really could use something at this point.

You were smart enough to save up that $$...if you bail him out without getting to the root of the problem, you're only enabling him. My dh has 2+ jobs to pay of debt we accrued together in our 20's. He played the freelance on the cusp of making it game for way too long...eventually it was time to make things right.

[Peony]

Originally Posted by velochic

Until you see that the core of his problem - his spending habits - change... and for a long period of time (like years), I would not spend a dime toward his debt. He will get you both in the same boat except then you will no longer have any emergency fund plus a load of debt. I would be very careful about how to proceed. I am usually of the opinion that finances/decisions be 50-50 in a marriage, but in this case, I think you need hold the reins, and hold on tight. He will pull you down with him.

Agreed. If he was taking steps to be responsible then I would pay it off, but he isn't.

[cristeen]

I'm with Velochic also. I also think that it's time for you to separate your finances. Having a joint account with someone so irresponsible is just hurting your family. Make him get his own personal account and put him on an allowance. Once he's figured out how to handle his own account and not keep it perpetually in the red, then you can revisit the subject of allowing him access to the joint account.

I would not maintain co-mingled finances with someone who kept me in the red all the time, period. But I especially would not bail them out, they will not learn that way.

I also agree that he needs to get a job - do whatever he has to to pay off this debt. I remember working 2 jobs to pay off a student loan. I started work at 6 am at the first job and got off work at 11 pm at the 2nd job. And I had half an hour between jobs to get from site A to site B. It sucked, but I got the debt paid off, and I learned my lesson.

[its_betty]

I'm in a similar situation although luckily no debt except a fairly low, mostly paid car loan. Dh is a spender, and I've recently realized that he simply has no clue how to save for emergencies and for the long term.

To save your own credit rating and your families ability to get credit if needed, it may be best to pay off the loan. But I agree that your dh needs help to learn to handle money. If you can, start by sitting down and having a discussion about money and writing out a budget TOGETHER. If he's not receptive to that, counseling might be the best way to go.

I do NOT think you should be the authoritarian and "give" him an allowance. You can both sit down and decide what allowance you each should have.

My situation: dh is not currently earning enough to really have any "extra" money (and hence, neither am I: I contribute at least 80% of our family budget and that is not easy!). His pay varies. When we recently remade our budget, we set his contribution at a realistic amount. He kept saying "Just tell me what you want me to put in." Well, I want him to put in half, but that isn't realistic at this time.

He asked what he would do if he earned extra one week, and I could see the lights go on in his brain when I said, "You save it in case you don't earn enough one week." Ding ding ding! I honestly think that saving "in case" just never occurred to him.

I am self employed, and so I have a savings account of at least 2 months expenses. I'd like to get that higher in case my work drops way off. It should be higher but I have used some of it to make up family budget shortfalls caused by dh's employment (or unemployment--he's quit his last two jobs) situations. Dh does not have access to that money, and doesn't know exactly how much I have. He would find things to spend it on. (He has the password in case I die.)

Dh is also in the midst of working on some personal issues, and is making a lot of progress and realizing that he has not been the best partner in the past. So I am trying to help him make a fresh start.

I do struggle with the concept of pooling all our money. Sometimes I think it would be best, but then I worry that dh would spend most of what I think we should save (and our savings are low: Suze Orman would deny me just about any expense). I have funded a family savings account (not a huge amount but an ok emergency fund). When do I start putting all my "extra" into a family account vs my individual account? In a way, I hate being the one with the money: dh asks me if he can spend on something and I don't like to be the person who has to approve or deny the expense. When dh has been paid more, it didn't seem to matter as much because we both had some extra cash: he spent his and I saved mine (for the most part). Now I see that it DID matter, because his money is gone and I am spending my savings to support the family. I need a time machine so we can have a re-do!

[kitteh]

Originally Posted by Delicateflower

If you are planning to stay with him, I'm pretty sure your credit is intertwined with his? As in, they can come after you for his debts?

Nope, that's not true. Although his finances obviously affect her, unless she actually signed to have her name added to his credit cards and loans, then she is not liable for them and would not be in the event of a divorce or death.