Striking Debt For Relief And Closure

In an attempt at ever-present honesty on this blog, I have come to the realisation that I want to write about some of my issues with money.

The ever-present fear of not having enough of it to cover basic needs, to begin with, and with that, a tendency for hoarding and issues with generosity.

Admitting your own shortcomings is never a fun pursuit, but I hope it could be a relief for glossy images of picture perfect personal finance blogs where all you have to do is cut cable and stop eating out and everything will be sunshine and roses.

Of course, life isn’t always as easy as that, and for someone who has grown up without a surplus of money, there is always the risk of falling off the frugal wagon and into the dark lands of simply being a cheapskate.

Especially if you are sharing finances with your partner and have for years, I admit that this story might not paint me in the best of lights. Still, let us practice honesty and share one of the issues Mr. E. and I have dealt with over the last year.

A Wee Pup

I suppose to understand the story, you need to understand something about where I came from.

We grew up working class. Stable working class where at least one parent always had work, and we were never evicted, but still working class. Allowances were sporadic and arbitrary, dependant on factors outside a child’s understanding and control. Things like mortgage interest (double digit crisis of the 90’s, anyone?) and heating in winter.

I circled the toys I wanted in the toy catalogue with two different colours. One colour for the things I wanted but knew were in the “in your dreams” price range, and a different colour for things that might fall within a more acceptable range.

As a teen, I worked at a pizza shop just up the street, earning just enough for my first laptop. The first ever private computer of my own, unshared and unscheduled with siblings and parents. A sizeable chunk of my income went to pay for my cash phone and monthly bus pass. I even had a little leftover for the very occasional purchase and saved up for the big thing: Getting a license before leaving for uni.

I had no part-time job while in university. I got by on the modest stipend and supplemented it with an annual summer job. Money was not in excess, but since I feared credit cards like the plague, I simply spent a week eating out of my pantry if I ran out of money before the next stipend came in.

always had enough money for rent and utilities, and my cupboards were always sufficiently full to sustain me for a long time if need be. By being careful (not smoking, drinking or having a car helped as well), I made ends meet consistently.

With such a scarcity mindset growing up, it should come as no surprise that I developed the habit of counting and tracking my spending to various degrees. In general, people knew better than to ask me for money.

A Sudden Influx

Then came some years of instability after university, which I touch upon at various points in the blog. But finally, I landed a secure 4 year contract with a decent (to me) salary. Nowhere near $50k anually, but more than enough to live comfortably after years of insecurity and having very little to save.

Only a few months after I started my job, Mr. E. arrived after finishing his degree in London. And a month or so after that, we got hit in the face by a massive tax bill due to a paperwork error. To add insult to injury, Mr. E’s student loan stipend got delayed, and I carried us through a few months on my salary alone, which would have been perfectly fine, if not for the aforementioned massive tax bill and our lack of a full pantry.

Shared, But Separate

I have mentioned before that Mr. E. and myself have what we call “shared but separate” finances, which means that we solve all money-related issues together, but have separate accounts in addition to our one joint account from which rent and utilities are paid.

Since I earn more than Mr. E. gets as a stipend, we agreed that I would pay 2/3 of our rent, while he would pay 1/3. During the time when he had nothing coming in and no freelance work, he dutifully and painstakingly logged each expense that I covered which “should” have been his.

We agreed that he should pay it back when he could. Half in increased rent that he would log, and half into his own, high interest mortgage savings account for our future. Him being a very conscientious man, and me having my issues with letting go of money because of my past, we felt this was a fair arrangement at the time. Especially since we kept our belts so tight for those two months while the storm was at its worst.

Add to this that I had just dived headfirst into the world of Mr. Money Mustache et al, I was feeling frustrated with all the money that was going “down the drain” instead of partying in my savings/investing. How dare a real life emergency get in the way of my plan??

Time Passing

With each month, Mr. E. would add his little rent increase to our shared account, and each month, without fail, he would run out of spending money 1-2 weeks before his next student loan stipend.

I am privileged to be of reasonably sound body and mind. At least to the point where I do not have to pay for subscription medication or regular doctor’s appointments.

Mr. E. on the other hand, has a chronic condition that requires him to visit a doctor regularly and pay for medication. This could add between $50-100 to his monthly bottom line, and when you only get about $1000 to live on, that is a significant amount.

In the beginning, I’ll admit that an ugly part of me felt that, since I had gone through the poor student life and managed, so should Mr. E. be able to. But I failed to take into consideration that our situations were quite different.

10% of your stipend in medical bills? That was certainly not an expense I had ever incurred. I had managed, but just barely, and not with extra expenses like that.

I felt more and more guilt stricken, watching my partner dutifully pay me back as best he could while incurring higher medical expenses on a lower income. We had felt it was fair at the time, but while I was socking away money for our mortgage downpayment and investments, he was running close to zero almost every month.

It felt like I was abusing my power as a higher earner, and it did not feel nice.

Realisation, Admission, Relief

Think I am a horrible cheapskate yet, who tortured my partner like that for over half a year?

Well, it is with a great sense of relief on both of our parts that I can report that only a few days ago, we sat down and talked about this dark cloud that had been looming over us. I was frank about my feelings on the matter, and proposed we strike the remaining debt in its entirety.

Being conscientious, as previously mentioned, Mr. E. accepted only on the condition that he’d be allowed to pay a bigger portion of our shared costs once he was financially able to do so.

Later he shared with me that while he on his part felt guilty for taking my offer, a huge load was taken off his shoulders. Getting back to zero, even if it was just numbers on a page, had a huge impact on our general mood.

I felt similarly, as removing this agreement was one less thing to think about and administer. I strive for a simplified life wherever I can, and this includes anything that demands mental capacity and saps my time, like tracking credit cards or subscription services or any of the “optimisation” hacks proposed elsewhere on the internet.

A Simple Life

For similar reasons, I cancelled my free Audible trial as soon as I had finished Meet The Frugalwoods. Get it out of my way and out of my life, so I don’t have to remind myself to remember to fix it later.

If you save $100 a year by juggling 10 different credit cards and swapping accounts like a pro to avoid fees or interest? Great for you!

But I’m lazy. I’d rather not save those $100 and get hours of my time back.

A Financial Rocky Road

So, now that I have admitted one of our big financial elephants in the room, I am ever-curious. Have you had any similar experiences with people close to you? Or have you been burned by borrowing money to someone who could not be trusted to pay it back. Are you financially naive with your loved ones, or are you a tightwad who struggles with sharing what you have?

I know I can tend towards the cheap slope of things, and it is something I am actively trying to work on. My ultimate goal is to be frugal, but generous. I’m not where I want to be yet, but I am working on it.

Lessons in not being a financial tightwad

11 Comments on “Striking Debt For Relief And Closure

  1. Reading through your post, I never thought you were mean, as I could see you were speaking in the past and so had already rectified the situation!

    In fact it is difficult to raise money issues for discussion within a couple, so I would attribute this episode more to inertia than malice! And as we say in Spanish ‘wise is he who can rectify’.

    I am glad this is now resolved for you and you are both happy.

    For us the big change was moving to a joint account for our joint expenses (rent, utilities, when we eat out together), which we pay into based on our income. Previous to this the lower paid one was trying to keep up with 50% if payments, which was not sustainable (it was due to habit, when we were students we had similar incomes and no joint account, so we had not yet made the transition ).

    • Thank you for your kind comment, Maria.

      I think we are still adjusting to one of us still being a student while the other is working. We are so used to us both being equally struggling students or not much better off!

  2. Shared but separate is the way we do our finances as well. We’ve never kept track to that degree, but it’s worked out that when we were first married my husband made considerably more than I did, but then was in college (with a stipend) while I was working a career job. We’ve carried the extra burden at different times, but now we make very similar salaries so we just go the 50/50 route. If they were wildly different though, we’d do something different. 10% to medical expenses is a TON – and you’re right, everyone has different constraints, even with the same income.

    • Yeah, we hope to get to a 50/50 income eventually. But we just aren’t there yet, so we have to play with what we’ve got! It is so weird for me to be the “high” (median) income earner in the household. I have always been the person with little to no money beyond bills and food. It is a very different situation to try to wrap my head around.

  3. Compared to my sibling, I’ve been very fortunate financially. My sibling not so much. Some by bad choices but not always. I’ve often felt the guilt you mention when I lent money (they never asked unless truly cornered) and requested to be paid back. Getting my money bad didn’t often happen as it was usually to get out of an unhealthy situation.

    Glad you’ve both found a way to solve things where you feel better.

    • So far, I have only been asked by my siblings for money gifts (or equal no-gifting, if they needed to save money) around holidays or birthday, so I’ve always been able to write it off as a gift. Those were small sums though, so I am not sure how I would react if they asked for bigger sums. I hope to have a much healthier emergency fund by then.

      Glad to hear you have been able to help your sibling in times of need.

  4. Sounds like I am in the minority here: in my family finances are 100% pooled. Everything earned, no matter who earns it, goes into a joint account. We make decisions jointly and pay all expenses (including truly shared expenses like housing, and also expenses incurred by one person like taking a course or buying new shoes) from the joint account. All savings are held jointly. Everyone has equal access to spending money for the things they want and need, although we talk about any significant purchases. We work on consensus, and we are lucky, because we have very similar values and priorities financially. So far, after ten years, we’ve never disagreed about money.

    To do things this way was a decision we made consciously and it was the right decision for us. We don’t place a lot of faith in the way capitalism rewards different work, and we didn’t want to replicate things like debt or different income levels/buying power in our relationship.

    Similarly, we have many friends who are lower earners than our household, because they work jobs that our society values less – agricultural work, social work, nonprofit work. I’m uncomfortable with the idea of us enjoying the benefits of added financial security and opportunities while they experience stress and hardship. This is something we’ve talked about with close friends and, for those who are comfortable accepting it, we help where we can. We’ve given money, or loaned it interest-free for those uncomfortable accepting gifts, when friends have had unexpected expenses they couldn’t afford. When we go out to dinner or attend concerts, we often cover their cost. We contribute money every month to a fund we set up for nieces/nephews, and give a sizable sum of money to my grandparents every month because their retirement income is only enough to barely scrape by, and I don’t want the people who raised me to live with financial stress if I’m in a position to help.

    Between what we give to my grandparents, other family members, charity, and friends we spend just over 10% of our monthly income. So yeah, we’re saving less than we could be. But on the other hand, we don’t have kids (and no plans for kids) so we have more flexibility. And we’re lucky enough to have enough income to be able to do that and still save some money for ourselves. I feel lucky and to me it feels right to spread that luck to others.

    I don’t know if that means we qualify as frugal. We’re careful about how we spend money, and we still save a third of our income, so I like to think that we are? For what it’s worth I have never felt that family members or friends were taking advantage of us. If I started to feel that way, I would no longer want to help!

    • I can only say that I appreciate your honesty and admire your generosity. If more people thought and did like you, I think we would have a much warmer and better world.

      I keep going back and forth on suggesting pooling accounts. There is still the fear that I’ll end up loosing “my” money. Your comment on capitalism rewarding different work is a valid one, as our goal is to one day get to the point where we A) have enough money to not worry about it, and B) have expenses so low they would be easy to cover anyhow.

      It sounds to me that you are frugal. I mean, the whole point of frugality as I understand it is to identify your values and spend money on those, not various consumer goods society tells you to spend on, but you don’t actually care for. It sounds like giving and sharing your wealth is one of your primary values, so it makes sense that is where your money goes.

      Thank you for your comment. It has given me food for thought.

  5. We pool our income, and I supported my partner while he was not working (because he moved to a foreign place to be where my job was and then to go to school). I tried hard not to think of it as “my money” and sometimes failed. He had his own bank account and I would transfer money into it. He felt like it was an allowance. I felt like I was being generous. We are now at a place where both of us are working and now we pool everything and don’t have seperate accounts. I actually prefer it that way because of the transparency (we cannot hide (both of us) the extra we are spending). It sounds like I had a similar growing up experience and University experience as you. I’m really happy to read your blog. Thank you.

    • It has been very difficult, and I feel bad for feeling this way. We are discussing pooling our resources more thoroughly when we get married, but we both still want a private spending account as well as the shared account for shared expenses like groceries and a night out. Glad to hear I am not the only one who struggles with this!

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