In a partnership, finances can often be a source of contention. The key to avoiding this is to recognize that you and your partner are a team, working together towards common goals and supporting each other in reaching your individual goals. It’s not a contest between the two of you. Open communication and an understanding of what you are each working for is necessary for the team to flourish.
Before graduating from college, my parents and I discussed different possibilities for paying back my student loans quickly. These solutions aren’t possible for everyone, but they are an enormous benefit to me as a young adult.
My parents became my first strong financial ally.
They told me that I was welcome to stay at home -rent free- up to 5 years following graduation so long as the money I earned was put towards my student loans. Another major expense that I did not have to worry about was a car; my mother was buying a new car and I used her old one. I managed insurance and maintenance, but I didn’t have to take out a car loan. This allowed me to pay down my student loan debt faster.
I lived at home for three years and consistently put 70%-80% of my monthly pay towards my student loans. For anyone wondering what this looks like: I graduated with a degree in Biology and became a middle school teacher making about $2,500 per month. I would drop $1800/month on my loan debt: $1200 for my private loans, $600 for my federal loans.
After three years of this, my partner and I decided to move in together. This was a pretty big decision. It wasn’t just romance at that point; it was a real partnership with adult obligations to meet. I made it very clear to him that I had a timeline for paying off my student debt and the deal with my parents was a good one. If I was going to move in with him, I would not be able to contribute to rent. Generally, any financial contribution would be small and expectation management was important. Thankfully he graduated as an engineer with little student debt. He landed an excellent job and had his debt paid off within a couple of months after graduating.
My partner was supportive of my goal, and became my next financial ally.
We found a great apartment about halfway to each of our jobs. He paid for the rent and I paid for the electricity, internet/cable, and most of the groceries. This worked well for awhile, but once I was no longer on my parent’s health insurance he had to take over the internet/cable payment so that money could be redirected to my employer’s health insurance program. Any additional payments (like subscription services to Hulu, Netflix, etc.) he also pays for because he has more disposable income and it’s something we want -and budget for- as a household.
This arrangement has worked very well for us largely because we both understood that meeting my financial benchmarks required careful budgeting. In order to live together, paying down debt had to be a mutual goal. We set up household expenses in a way that helped to meet that goal and I was prepared to live a frugal existence. Any splurges, even something like going out to dinner, was something he determined he’d paid for in order for me to stay on track and reduce household debt.
Currently, my federal loans are paid off and my personal loans are close behind. I’d love to use the debt snowball method and pay more toward my private loans, but life happens. Mom’s old car is falling apart and I need a new one. I’m still on track to pay my student loans off according to my timeline, which is important because I told my partner I wouldn’t marry him until they’re paid off. And then I proposed. He’s patient toward a longer engagement – for now.
My parents’ early support and my partner’s financial situation bolstered my ability to pay down debt.
Beyond open communication, my financial allies really made this plan feasible. My partner and I were open about our personal and financial goals before moving in together, and regularly talk about our finances to make sure we are still on the same page. Some people find money discussions uncomfortable, but they are important, and normalizing it makes the conversation easier when the money gets tighter. We discuss all major payments and plans openly. This allows us to work together while still having our finances separate for now. He understands that my contribution to the household is reducing overall household debt by paying off my loans. Then I can contribute in new ways. We both agree that before you can build true wealth, you have to get rid of debt. While I get rid of debt, he’s implementing other strategies to grow wealth on our terms. Once my loans are paid off, we will have an additional $21,600 in income (post-tax) yearly. It goes without saying that this will have a dramatic impact on what the two of us are able to do, together.
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