Free money is never treated the same as money you’ve earned – it can be spent without thinking. By paying off someone else’s debt, you’re not helping them to avoid future debt or “get a clean slate”; you are enabling them and setting a precedent for future bailouts.

Some of my friends have gone this route and bailed out their wives/significant other’s debt (one with over $50k credit card debt!). Every single one of them thought it was a romantic, noble gesture that would help their partner get back to equal footing.

What seems like a loving gesture has backfired for ALL of them: the women come to think of the money they earn as “play” money, and rely on their partner to cover basic expenses, and in a short time they’ve racked up even more debt. Long-term goals to get ahead evaporate as the guys get stuck in a cycle of working harder to pay off their partner’s debt. These aren’t “bad” women – they just don’t get it financially, and so they are dragging their partners down rather than working together to achieve a common financial goal.

Yes, communicate, but more importantly start setting financial goals for yourselves as individuals and as a couple. My now husband and I lived together for over 5 years before we married, and in that time we saved our money, got out of debt, and bought a house.

We only joined our money after the wedding, and since then we’ve sat down and talked deeply about how we feel about money and where we’re going. Because of this, even though he started out in our relationship being more of a spendthrift than I was, we’ve since gotten on the same page and are making leaps and bounds forward working together for our joint goals.

Being in a committed relationship means helping your partner become a better person, not enabling them to be less responsible. Give a person a fish, and they’ll eat for a day. Teach them how to fish, and they’ll be set for life.

1) Use the cash($40,000) to advance your real estate career, these kind of opportunity would would not be available always. Dont miss out on this opportunity.

2) As she is just starting out on her career – her pay may be low now – but income would rise every year and soon she would earn lots more and could easily pay her loans off.

3) Many would consider Student loans as good debts – I assume she would get tax benefits

4) On a personal level – it would be a more equal relationship if you don’t help her out. She would not have to feel obliged to you.

By the way, a lot of intergender hostility in these comments. Keep in mind guys, she didn’t ask him to pay off the debt. There is no reason to think of her as a gold digger.

Carol

He needs to talk to her first, without a doubt. She is just as much a part of this equation as he is. But I don’t think he was trying to sound condescending toward her. I am pretty sure if he was planning to leave her out of the equation, he would not have asked Trent for advice; he would have just done his own thing. It seems to me that he is just thinking through options as he sees them right now, rather than just planning her life for her. I would want to go into a major life decision like this with some tips from people who know what to expect and who have some experience with managing their personal finances.

Perhaps it’s not what he intends, but John comes off as one of those limited, obsessive types who got lucky in the real estate market and now thinks his views on personal finance make him superior to everyone with a credit card balance.

ok, so you let her use her pay to pay off the debt, and your pay is going where? This is like saying you pay taxes for social programs rather than for road construction. When money is all together, who the heck can tell which dollar is going to which expense?

if john and his fiancee are expecting to live the rest of their lives together, then they need to stop thinking like individuals and establish joint goals and plans. it is simply inefficient to do otherwise. next thing people are going to say is that John’s fiancee also needs to pay half the rent, for her own food, for her own insurance, for her own bills, for her own gas, because that will teach her financial responsibility, because this is what people are suggesting.

if you want to get a diamond, so be it. i’m tired of reading how people think that you shouldn’t get what you want to get. who cares if a new car depreciates, if you can afford it and want it. is it wasting money from other people’s point of view? sure, so are a host of other things that people will spend money on.

if john has money concerns, then he needs to talk it over with his fiancee. it sounds like john’s fiancee thinks that john’s forays into real estate are more financially irresponsible than her student loans. I also get the sense that John is implying his fiancee isn’t necessarily irresponsible with money, so much as she hasn’t had to worry about where the money was coming from. perhaps her parents were giving her money. don’t know.

If things were the other way around and he had the debt, would people suggest she pay it after they were married? I doubt it.

So go buy a ring. You sound like marriage is already in the plans and you have been living together for 2 years now. Don’t let some advertising company tell you how many months of salary you should be spending on a ring. Perhaps an Engagement ring is not even necessary. However, as voiced by others, make sure you talk about finances with your future partner as soon as possible.

My advice is that he a) propose, then b) figure out what kind of wedding/honeymoon expenses they want to incur, and then c) start pre-marital counseling and/or financial planning sessions. Having a professional mediate these issues will get everything out on the table, keep him from having to be “parental,” and will prevent her from feeling controlled or infantilized.

Now, as for whether John in particular should pay off his girlfriend’s debt, it probaby doesn’t matter IMO. I think he should go with his gut. I also think he, like some of the subjects of previous posts, should stop thinking it’s their job to teach anybody a lesson. Maybe he didn’t mean to have it come off as patronizing as it did, but whether or not she learns lessons is none of his business. That says to me one of three things:

1.) It didn’t come out like he meant it to.
2.) He’s being pretty condescending to think her lessons are his business.
3.) She’s actually irresponsible enough with her money that he really has to be concerned about her lesson-learning.

If it’s #2 or #3, they should be thinking harder about whether or not they should get married than about whether or not he should pay off her debt.

A few of the other comments refer to trying to time the real estate market. That’s a tough thing to do; a stable market can go south in a hurry and the best profits are made if you’re buying near the bottom and catch the next upswing. If you’re living in your project house or can rent it to cover your carry the timing is not so important. If you’re not doing either of those things you definitely want some liquidity on hand so you don’t get burned in a fire sale or foreclosure.

First of all, it’s her debt and she needs to work it off after their marriage (if they do get married.) Maybe the marriage won’t work out and John will be out of his money and his dreams of home renovation.

My personal experience: I paid my wife’s mortgage payments and her student loans (~ $12,000 1990 dollars) with money I had saved prior to our marriage. I was being noble and generous. 17 years later, I find out my wife has cheated on me and I’m looking at divorce – with my wife getting approximately $350K walk away money – half of all the money I’ve ever saved and I’ll loose my California home (and lower tax base even though I bought the home prior to marriage.) She hasn’t worked outside the home but 6 months of our marriage, but she still gets half of everything because I didn’t care about keeping it separate during the marriage (because I was planning on “death do you part”.) She also gets half of the money in my IRA account that I saved prior to marriage because I added a couple of thousand dollars to the IRA during the marriage (converting what was my money into community property.)

You need to be practical these days… it’s my understanding that most marriages end in divorce – so if you have significant assets prior to marriage you need to protect them. It’s your money, not hers. If she has an issue with that – she wants your money not you.

My recomendation to John: Your girlfriend gets you and all your earnings AFTER your marriage day. Money made before marriage is yours – if you take care not to mix it with community property.

If you have a pre-marriage IRA – start a new one after your wedding day AND NEVER ADD ANOTHER CENT to your pre-marriage IRA account. That will keep it “separate property”.

If you own a house, but are still making payments – sell it and buy a new home with your wife after marriage. Take the money from your house, put it into an index fund (and never touch or add another cent to it!) That will keep it separate property. If you don’t, the mortgage payments on the house you owned prior to marriage will convert it to community property (and… you lost your house.) I don’t get my down-payment back out of my house – it’s all 50/50 now.

It just makes sense to protect yourself. Odds are NOT in your favor, no matter how much you love/trust the other person. Women will tell you they won’t sign a prenup – but if you are careful about keeping your separate property separate – you won’t have to give away your life (which is what money is – life that you spent to obtain money) to a person who doesn’t deserve it.

How dare you say that he is selfish for not paying off her debt before they are married! Maybe you should pay off her debt instead of John? Why not, are you selfish or something? So according to you, a guy should pay off every debt of every girlfriend he ever thinks he may propose to or else he is being selfish? I guess this is the thinking of a true Gold-digger.