"Nobody likes unpleasant surprises, but when Allison Brooke Eastman's fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days.
Ms. Eastman said she had told him early on in their relationship that she had over $100,000 of debt. But, she said, even she didn't know what the true balance was; like a car buyer who focuses on only the monthly payment, she wrote 12 checks a year for about $1,100 each, the minimum possible. She didn't focus on the bottom line, she said, because it was so profoundly depressing.
But as the couple got closer to their wedding day, she took out all the paperwork and it became clear that her total debt was actually about $170,000. "He accused me of lying," said Ms. Eastman, 31, a San Francisco X-ray technician and part-time photographer who had run up much of the balance studying for a bachelor's degree in photography. "But if I was lying, I was lying to myself, not to him. I didn't really want to know the full amount.""
The article then discusses the types of issues couples should discuss before they get married, like pre-nuptial agreements. They may not seem romantic, but it forces people to start thinking about what their future lives might be like and how they both handle money. Money is often one of the biggest problems in marriages.
2 comments:
Prof. Morong,
First, let me say that I enjoy your blog, even though it has been a year since I had you for Micro Econ.
Second, ABSOLUTELY debt should be talked about and the fiance in this story did the right thing, if that is what his conscience dictated. From a straight economic standpoint, when you marry, many times you assume the debt of the other party. If you were to divorce, it is both lengthy and costly to separate any debt you accumulate, prior and post marriage. In a different light, would you buy a business if you found that they lied/couldn't account for their ledger? Could you be certain there wouldn't be anymore surprises?
Thirdly, this is also a reflection on people's relationship with money and trust. You need to be able to trust a person with the most intimate things. And what could be more intimate than money? And if someone is careless with something so intimate, how can one be trusted with someone else's intimate things?
TO
Thanks for dropping by and commenting. Good points. I guess alot of debt is not bad if you will be generating the income to pay it off. But it might come as a shock to any potential spouse how much you owe. They might feel liable for it or wonder how responsible you are. No one wants to marry anyone who is irresponsible. If you lied about it, it would be even worse.
I forgot your name. Please remind me, either here or emailing me.
Have a great day.
Cy
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