We’re getting married with a baby on the way. My fiance has offered to pay off my $10,000 student debt and $7,500 car loan

[Crackers Phinn]

We’re getting married and have a baby on the way. My wife has offered to pay off my $10,000 student debt and $7,500 car loan​

Dear Quentin,​

This past year has brought a ton of changes to my personal life. Most notably, the love of my life has agreed to marry me. Amazing! Shortly thereafter, we found out that she was pregnant. I am over the moon and cannot wait to start my family! This will be the first child for both of us.

Already staring down the barrel at the cost of a wedding, my mind went into overdrive with the news that a little one will be on the way. I have begun to restructure my personal finances to anticipate this new “adventure” of ours. My soon-to-be wife has asked that I do the same for her in the near term as she is, self admittedly, not the most financially literate.

We are both in our early 30’s, and both earn over six figures per year — though my fiancée earns about 30% more per year than I do. She began working right out of high school so she carries no student loans. She has some debt, but nothing substantial. I owe a very small amount for my student loans (less than $10,000) and a small amount on my car (around $7,500).

My question is: how and when should I pay off my debt? I do not want to necessarily pass my debt to my future wife, as we will eventually have to purchase a home and I do not want it to hurt her credit history. I have a budget to pay off all of my debt in full before the baby arrives. However, I will be getting married before I am able to satisfy the entire amount I owe. My fiancée, who has more liquid cash than I do, has offered to help me pay off the debt entirely since we will be joining all assets once we are married anyways. I just want to make the most prudent decision for the new additions to my family, as well as for myself.

Does the timing of any of this matter? Or am I making mountains out of mole hills?

Soon-to-be-Married

Dear Soon-to-be,​

This is a happy story indeed! There are so few around these parts. I’ll tell you what I would do, and then I will add what you could do. They differ slightly, as I would like to answer your question — without being too prescriptive or presumptuous. If I were in your shoes, I’d have the smallest, least expensive and intimate wedding in my backyard, a friend’s backyard or a restaurant with a backyard, and put all of the money I was going to spend on the wedding towards my loans.

Later, I would throw a wedding party when people could socialize more freely, and when my finances were more on an even keel. It would allow me to celebrate the wedding with family and close friends, and have a more public party later. The average cost of a wedding is somewhere between $12,400 in Arkansas to $30,400 in Massachusetts, depending on the survey. Of course, people can and do spend even far more for their special day. A lot of money for a lot of stress.

It makes sense to rid yourself of both loans, even in this low-rate environment, but only if it does not delay other goals such as saving for a house. You could then set up a joint account, using your existing payment plan with the aim of saving $17,500. You have little reason to worry about your wife’s credit score. A credit score is based on payment history, how much you use of your available credit, whether you take out new credit, the length of your credit history, and your credit mix. This is a very exciting stage of life. You are young enough to have the best part of your life ahead of you with a fraction of the average student-loan debt, and you are old enough to have the agency and energy to make it all happen. Enjoy the ride!
https://www.marketwatch.com/story/w...bt-and-7-500-car-loan-11631157156?siteid=nbch

 

[Theresamonet]

They both make over six figures a year but they’re stressing about $17k? I don’t understand. Somebody, anybody, just pay it… Or don’t. It’s kind of an insignificant amount if he’s being honest about their earnings.

 

[Keen]

They both make over six figures a year but they’re stressing about $17k? I don’t understand. Somebody, anybody, just pay it… Or don’t. It’s kind of an insignificant amount if he’s being honest about their earnings.

I thought I was the only one wondering? This is not so much debt that it would drag you down or causing excess burden for a couple making that much.

 

[january noir]

And what's the problem? I didn't read the article. I am responding to the thread title.

 

[Black Ambrosia]

I had the same thoughts. Maybe they’re in a really expensive city. If not this could easily be paid off in 6 months to a year without needing a plan. Interesting how he put it out there that she’s not really financially literate but she’s the one with the extra money while he’s laying awake at night trying to figure a way out of the mess he’s made. Makes me wonder what he’s got saved up. FWIW neither one of them is giving the wife enough credit. Using cash instead of credit is a financial strategy even if it’s all you know and isn’t part of a master plan to stay out of debt.

I really think this is about the expensive wedding they both want to have and having a short timeframe to make that happen and potentially looking at homes around the same time. If they weren’t already pregnant they’d probably push the wedding date out to give him time to pay off his debt and they could plan for the wedding and house simultaneously.

 

[oneastrocurlie]

Hmmm. Seems like a making a mountain out of a mole hill. He says she's not financially literate but worried about messing up her credit score when that's not how that works. He also has less liquid cash which makes me think he also has less savings.

If they are combining all assets then it'll get paid off eventually. I don't know if I'd be using my cash to pay off his debt in one swoop (or combining ALL my assets but I'm not married so what do I know). He can stick to his plan, they can have a smaller wedding to save, and keep it pushing.

I also wonder if he would be paying all her debt off and combing all assets if the 30% pay gap was reversed.

 

[Black Ambrosia]

I also wonder if he would be paying all her debt off and combing all assets if the 30% pay gap was reversed.

Well we know he ain’t got it so he couldn’t do it even if he made more money but, if he could, I think he’d hold it over her. He presented her “financial illiteracy” as something she wanted his help with but it feels like he’s trying to come across as the head of household taking charge of their finances when he doesn’t have control of his.

To be fair I don’t think his situation is bad. He’s got a small car loan and minimal student loan debt so he’d be fine even if he wasn’t making six figures. But they should probably rethink whether he’s the one to manage their finances when she seems to be more disciplined. Whatever they decide, they make too much money to be losing sleep over such a small amount.

 

[oneastrocurlie]

Well we know he ain’t got it so he couldn’t do it even if he made more money but, if he could, I think he’d hold it over her. He presented her “financial illiteracy” as something she wanted his help with but it feels like he’s trying to come across as the head of household taking charge of their finances when he doesn’t have control of his.

To be fair I don’t think his situation is bad. He’s got a small car loan and minimal student loan debt so he’d be fine even if he wasn’t making six figures. But they should probably rethink whether he’s the one to manage their finances when she seems to be more disciplined. Whatever they decide, they make too much money to be losing sleep over such a small amount.

Agree. Agree. Like all you have is $10k in student loans?? Ok dude. Be easy. Lol. That's not even considered bad debt.

 

[Crackers Phinn]

I posted this question as an example of a man who takes his role as financial gatekeeper seriously. I don't think he downplayed his fiancé's financial intelligence instead he's telling the reader she's giving him full control of the finances so now he's in grown man mode to manage the whole pot of gold and wants to proceed in a way that fits the amount of uncertainty they are facing. At the same time, he doesn't want to take her money before they are married which is a giant breath of fresh air in these stories.

Once they are married, $18K isn't a big deal on their combined income but he's not liquid (likely 401K rich, savings account poor) and she has enough to cover their combined debt. The big joker is they have an oops baby on the way which means additional oops bills (life insurance, family healthcare instead of individual, essential baby supplies) and unknown job security and continued good health in a pandemic. So the question behind this is whether it makes sense to stay liquid and pay on the original schedule vs pay everything off and live paycheck to paycheck as they replenish savings. Obviously their paycheck to paycheck looks different than the bottom 80% but that's the position paying everything off might put them in. If anything goes wrong while they are rebuilding savings where does that leave them financially? None of what I've covered gets into the expense of even a cheap wedding.

I got a little that he's calling her his wife not his fiancé already tho.

 

[CarefreeinChicago]

I would do like columnist said low key wedding pay off debt before baby arrives

 

[Crackers Phinn]

I forgot to say what I'd do which would be more in line with the columnist if we were not in a pandemic.

I think the first thing they or any pregnant couple married or not needs to do ASAP is purchase as much life insurance as they can afford both from their employers and outside policies. Look at all these men dropping dead of Covid with babies on the way and pregnant women are catching hell and are not necessarily guaranteed hospital beds so umm yeah. Up them policies.

If the interest rates are under 3% for student loans and car then I would stay on the regularly scheduled payment plan and keep the cash freed up. The cost of liquidity (peace of mind) is $45/month or less.

Weddings during a pandemic are ridiculous, just do an immediate family wedding and do the big showy thing when things calm down if you still care.

 

[madamdot]

I forgot to say what I'd do which would be more in line with the columnist if we were not in a pandemic.

I think the first thing they or any pregnant couple married or not needs to do ASAP is purchase as much life insurance as they can afford both from their employers and outside policies. Look at all these men dropping dead of Covid with babies on the way and pregnant women are catching hell and are not necessarily guaranteed hospital beds so umm yeah. Up them policies.

If the interest rates are under 3% for student loans and car then I would stay on the regularly scheduled payment plan and keep the cash freed up. The cost of liquidity (peace of mind) is $45/month or less.

Weddings during a pandemic are ridiculous, just do an immediate family wedding and do the big showy thing when things calm down if you still care.

Nothing left to be said.

Really echoing that life insurance though. Men are so resistant to this.

 

[NaturalEnigma]

I think he's worrying about the wrong things. If they both make 6 figures, and his wife doesn't have any debt and he only has around $17,500 in debt there is nothing to stress about. Some couples both have huge amounts of debt. I'm trying to wonder if he is panicking because there is so much going on i.e. wedding, baby on the way, thinking about buying a house etc. and he can't think straight on what to focus on or if he feels some type of way that his wife makes 30% more and is coming into the relationship with no debt, so he feels the need to compensate for that.

As a man I wouldn't let my future wife pay off my loans. I would think it would be the other way around. I think he should just continue paying off his car and student loans as he was and focus on saving and preparing for the wedding, his new bundle of joy (the cost of day care is a grip) and their future house (down payments these days are crazy expensive). We're in a pandemic, keep the wedding small and simple. Unless you're about that financial freedom life, you're going to have loans/credit. Once they buy a house they'll have mortgage, so his little $17,500 is negligible. I agree with what others have posted if they are both making 6 figures paying $17,500 should be easy. If he was single or they were just dating, I would say yes, pay it off as soon as you can, but he got a lot going on right now. They need liquid cash.

 

[ScorpioBeauty09]

I forgot to say what I'd do which would be more in line with the columnist if we were not in a pandemic.

I think the first thing they or any pregnant couple married or not needs to do ASAP is purchase as much life insurance as they can afford both from their employers and outside policies. Look at all these men dropping dead of Covid with babies on the way and pregnant women are catching hell and are not necessarily guaranteed hospital beds so umm yeah. Up them policies.

If the interest rates are under 3% for student loans and car then I would stay on the regularly scheduled payment plan and keep the cash freed up. The cost of liquidity (peace of mind) is $45/month or less.

Weddings during a pandemic are ridiculous, just do an immediate family wedding and do the big showy thing when things calm down if you still care.

Those stories freak me out.

FH and I are considering how long post-nuptials we want to TTC and I told him one of my preconditions is life insurance on both of us. He already has a policy through work but it's crap. As a note it's better for women of child-bearing age to get insured before they have a bun in the oven.

 

[Crackers Phinn]

Those stories freak me out.

FH and I are considering how long post-nuptials we want to TTC and I told him one of my preconditions is life insurance on both of us. He already has a policy through work but it's crap. As a note it's better for women of child-bearing age to get insured before they have a bun in the oven.

Work life insurance policies are cheap but they usually got a whole lot of exceptions and they don't transfer if you change jobs so it's best to buy as much policy as you can afford while you're young with no pre-existing conditions to lock in a low long term rate.

Quite frankly, anybody without a policy should get on it now because after the dust settles on Covid, I got a feeling the price of policies is going to skyrocket IF you can even qualify.

 

[naturalgyrl5199]

Those stories freak me out.

FH and I are considering how long post-nuptials we want to TTC and I told him one of my preconditions is life insurance on both of us. He already has a policy through work but it's crap. As a note it's better for women of child-bearing age to get insured before they have a bun in the oven.

Get disability insurance as well!!! And like you said, you HAVE have to have it in place BEFORE the bun is in the oven. I purchased it when I first landed my job and didn't get pregnancy for several years. I HAD plenty of paid time off for my maternity leave so the insurance company basically sent me a check worth 66% of 8 weeks pay. You can have the check sent sooner or later, or have the premium cover 6-8-12 weeks leave or more. The amount of leave and how soon you want the check will increase or decrease your premium. It was a nice little piece for our savings account.

 

[naturalgyrl5199]

Work life insurance policies are cheap but they usually got a whole lot of exceptions and they don't transfer if you change jobs so it's best to buy as much policy as you can afford while you're young with no pre-existing conditions to lock in a low long term rate.

Quite frankly, anybody without a policy should get on it now because after the dust settles on Covid, I got a feeling the price of policies is going to skyrocket IF you can even qualify.

Pretty sure they are going to develop new "pre-existing conditions" come 2022/2023 FY. You watch.

 

[ScorpioBeauty09]

Get disability insurance as well!!! And like you said, you HAVE have to have it in place BEFORE the bun is in the oven. I purchased it when I first landed my job and didn't get pregnancy for several years. I HAD plenty of paid time off for my maternity leave so the insurance company basically sent me a check worth 66% of 8 weeks pay. You can have the check sent sooner or later, or have the premium cover 6-8-12 weeks leave or more. The amount of leave and how soon you want the check will increase or decrease your premium. It was a nice little piece for our savings account.

Question, did you get disability insurance through your work or outside of work? I just got a new job and it offers disability insurance and generous maternity leave but I wonder if I should get it outside of my new employer.

 

[naturalgyrl5199]

Question, did you get disability insurance through your work or outside of work? I just got a new job and it offers disability insurance and generous maternity leave but I wonder if I should get it outside of my new employer.

I got it through my job. I wasn't aware back then that you could get it outside. I know now, and if any future employer didn't have it, I'd purchase my own.