This & That: Money Moron Edition
If y’all don’t know yet, I’m going into production for a new TV show next month. The working title is “Money Moron,” and I’ll be working with all kinds of folks who are plagued by friends, relatives, and loved-ones who are just horrible with their money. Mates and soon-to-be mates are obvious choices. I’ll be encouraging children to tattle on their parents and young adults to rat out their older and “wiser” parents who may be showing all the good sense God gave a goose when it comes to planning for retirement. Room-mates, best-friends, co-workers, bosses, employees, in-laws, siblings may all be Money Morons or have one in their lives. If you think you’d like to be a part of the show either because you’re the Money Moron or because you’re desperate to get help for your Money Moron, now’s your chance to get one-on-one counselling from yours truly. (No, I don’t do private consultations.) Send your information request to me at getgvo@gmail with Money Moron in the subject line and I’ll make sure it gets to the casting team.
C Wrote: I have been financially in-tune for quite some time. My parent’s were too, so I learned from the best! I was lucky (lucky? hard working??) to get out of college with no debt, and got a well paying job, 2 weeks after graduation. 4 years later I own my vehicle, I’ve been in our company pension since day 1 and I have a 5 month emergency fund, a healthy savings fund, and have always remained debt free. I have now just purchased my own condo with 20% down (my first taste of debt!)…did I mention that I’m 23 years old?
My Question is: My boyfriend is in his late 20’s and loves his toys. He never hesitates to spend money on his bike, a new game system, something to customize on his car, or a night out, or me! He wants to move in together now, however, I am worried about his careless money spending habits. We make the same amount of money, but with no rent (lives with parents), or bills other than his car & bike payments (borrowed the $ from his parents, repays them, interest free) he is living paycheque to paycheque. What advice can you give me to help our situation out? He says that I am just too “calculated” and that I don’t have enough fun. I tell him that he is too careless and needs to think a little more about the future. We go on weekends away, and vacations together all the time, and I’ve never gone without (I wait, and budget for things I ‘want’ and don’t ‘need’). So what if my vacations are paid from a “vacation fund” it doesn’t mean it’s any less fun!
I can’t move in with him, fearing that I will have to pick up the slack! I’ve worked too hard for a guy to come in and mess things up! Am I being too uptight about this?
Gail Says: The fact that you are hesitant to hook up with a Money Moron means you are a very SMART girl. I’m proud of you. We need to stop associating bad financial habits with “okay” and “fun” and “spontaneous”. The fact that you’re planning your life and taking care of yourself financially isn’t something to be ashamed of… it’s something to be applauded. Good for you. And if your boyfriend can’t see that financial stability is important to you… and should be to him… why would you tie your rope to a sinking ship? Please, please don’t be talked out of being a sensible woman. If he can’t clean up his act, he’s not the guy you want to have a life (and babies) with.
A Wrote: I follow your show every week on Slice and I have learned a great deal about money management because of you. So thank you for that!
I have a very specific question about my situation and I hope you can help me shed light on it:
I’m 26 years old and a make a gross income of $47 000. I’m currently saving $500 a month into a RRSP for the purchase of a house ($600 as of March 2012). I have no debt, just a car rental. My current rent fee is $795 a month but with all the housing expenses it is close to $900. I pay everything myself.
My boyfriend is making about $37 000 a year and has a RRSP of $2000. However, he doesn’t save any money and relies on me for the purchase of the house. So unfair.
When we do purchase a house, how should I protect the investment I made? Should we sign a contract stating that I am entitled to x% of the value of the house? And if it is the thing to do, what should be this proportion? I love him very much but I feel that I have to protect myself and my money.
Gail Says: If you purchase a home and live in it together, as long as only your name is on title the home is yours. The minute you get married, it becomes matrimonial property and he is entitled to a share of the value. If you want to share the home, then you can hold the title as tenants in common and split it any way you want: 50/50 25/75 10/90. See a lawyer.
T Wrote: I am at the end of my rope. I am 27-years-old, currently married with two young children, ages 1 and 2. And I have just found out that over the past 8 months my wife of 9 years has been lying to me about our financial situation.
Back in December 2010 my wife, who was our family chief financial officer, was asked to fill me in on or current financial situation. Turns out there were serious issues. I immediately went to my parents and borrowed $17,000.00 to consolidate our debt.
Recently I pulled both mine and my wife’s credit reports and found that we (on top of the $17,000.00) are now and extra $8,000.00 in debt, that she had not told me about.
My parents refuse to loan us anymore more because of my wife’s lies, and have told me that she needs to go to her parents. What should I do?
Gail Says: I am so sorry that you’re living through this hell. Unfortunately, couples are very often not on the same page when it comes to money. First off, your wife has lost the right to be your family CFO. You need to take charge of the money. If she is working and contributing to the family coffers, then you need to have her pay her fair share to you and you take care of all the bills. If she is not working, then you come to a decision about an amount she needs to run the house (buy food, etc.) and that’s all that goes into the joint account. She has to cut up all her existing credit and get herself a part-time job to pay off the debt she’s built up. Do not bail her out.
As for the money you both owe your parents, I’m not surprised that they won’t bail you out again. I wouldn’t.
If you wife insists on continuing to run up debt, you must make sure you and the children are protected. You cannot be signed on any of her debt. You must keep your emergency money and savings solely in your name, and she cannot have access to any money. And you need to let her credit go into default so that lenders stop giving her credit. That’s the only way to stop her.
I also strongly recommend you seek professional counseling. Your relationship will not survive this if you don’t get some help.