Please give me some advice on financial relationship conflicts with wife

[Anderson Silva]

My wife and I recently married and bought a home together. We are both in our early 30s, relatively healthy, no kids, no major debts and working in secure jobs. We are each in unique financial situations and recently have been having disagreements related to money.

 

My wife has a stable full time job where she earns a salary of $45,000/year. She has been with the company for many years and has been getting only very minimal raises once a year. She also doesn’t earn overtime pay. However, my wife’s parents were really well off and have helped her out financially in the past. For example, they gave her a good chunk of money to buy her own condo apartment and provided other monetary assistance. Because of her parents’ help, after selling her condo, she now has about $100,000 of available money as a down payment for our home. Although her father has passed away, her mom is still there for my wife and is sitting on a good chunk of money which she has stated will go to my wife and her sister when she’s no longer here and that’s great for my wife.

 

I have a stable full time job where I earn $70,000/year. I have been with my company for seven years and have been getting phenomenal raises on a yearly basis ranging from 10 to 20% raise each year for the past six years. I’m also slowly moving up in the company so I expect my raises to continue on a yearly basis until I hit about $85,000/year. I also get paid overtime at a rate of “time and a half” for additional hours worked when needed. Despite my much higher salary however, my parents didn’t enjoy as much financial luxury as my wife’s and I’ve always had to pay for things myself through life. Because I haven’t received any large monetary gifts from anyone my down payment for our home was only $20,000 which is obviously much less than hers.

 

So you can quickly see that from the two of us, we are very different. I am the one who pumps over $1,500 more into our household, ongoing on a monthly basis, while she is the one who initially had more money for the house. We know that provided we stay together for 4-5 years that extra money she initially put in towards the house will get canceled out by the more salary I bring in to our household on an ongoing basis. I’ve already told her I will pay for 70% of the mortgage and all our other shared living expenses In the meantime, I’ve told her that I’d be more than happy signing a prenuptial agreement that protects her initial $100,000 investment in exchange for allowing me to retain the extra cash I bring home every month and keep it aside as my own security. In other words, for the next five years she could rest assured that if we divorce and sell the house, she gets her $100,000 back and I rest assured that our financial contributions to the household are the same and any extra money I earn (above and beyond what she does) I can keep in a separate account which only belongs to me. After 5 years, I take that money I’ve saved which will roughly equal to $100,000 and put it as a down payment on our home. At that point the prenuptial agreement gets voided because we each would have contributed evenly to the house at this point. She doesn’t want to exercise this option yet she continues to mention how she is the one who had the majority of the down payment of the house which causes us to argue sometimes.

 

The second and more important issue though is related to if we take money from her mother or not to help us with paying off the house. I posted about this a week ago under this link for those of you interested in reading it: Basically, despite the fact that the two of us can afford the house without external monetary help, my wife was insisting we take $100,000 from her mom and put it towards the hosue. Her mom would not really gift us the money but make me sign a “promise to repay” or loan agreement stating that I owe her the $100,000 in case something didn’t work out between us. This is to ensure that I don’t walk away with any money that was intended for her daughter. Well with everyone’s advice which was on par with my thinking, I refused to accept any money from her mom and we are still having huge fights about this. I am being made feel guilty that I’m not accepting the money and how it’s a bad financial decision on my part. My wife still wants to take the money from her mom and wants me to sign the paper work.

 

Given our situation, what would you guys recommend we do in terms of managing our finances together? Any tips and advice? Just looking for general feedback. I already know I won’t accept any loan from her mom but what else would you guys recommend at this point? She wants to merge our finances where as I’m leaning to keeping things separate until we agree on our money management as a couple. This is really frustrating, I am a generous person by nature and wouldn’t take a penny that doesn’t belong to me. All these loans, legal papers, agreements, this that is making my stomach turn. I never imagined finances in marriage would be so complicated. I don’t want to be unfair and want to share all I make with my wife but at the same time I don’t want to be taken advantage of in the end.

[pl3asehelp]

I think in a marriage all money should be shared and I would not get along with a partner who felt otherwise - I would feel I'm not trusted in which case that's just not even a close relationship, let alone marriage. I also don't think it's morally ok to accept money you don't need from others. In short, I could not be with your wife. Just too much distrust and reliance on others.

[Huntress0527]

Before my husband and I were married when we were living together we pooled our money together. Both our checks are deposited in our account where I manage all our bills. We also have a joint savings account where I put in at least 10% from each our checks. There is no you and me anymore when married it's now us and that especially applies financially.

[mhowe]

I would vote to keep your finances separate -- and you pay 2/3 of the bills, and she pays 1/3.

 

As noted in your other post -- if your wife wants the money from her mother, she can sign the paperwork.

 

There is some undercurrent here that has not surfaced, and until that is resolved you keep it MINE and YOURS.

[camus154]

Remember when you were debating marrying this woman and one of your reasons with going ahead with the wedding was that it would be too complicated to cancel out all the finances already spent? Remember when I said to you that if you thought the finances were hard before getting married, just wait until afterwards?

 

Well, it looks like that day has come. I'm not saying this to gloat--but you really need to wise up and start using your head, OP. This is what you signed on for, remember? Now you're here talking about an overbearing mother-in-law and prenuptial agreements in the case your marriage doesn't even last 3-4 more years. And you two are newlyweds?

 

I think you should do everything in your power to nullify this marriage as soon as you can. Give her the house, cut your losses, and move on.

[Huntress0527]

Remember when you were debating marrying this woman and one of your reasons with going ahead with the wedding was that it would be too complicated to cancel out all the finances already spent? Remember when I said to you that if you thought the finances were hard before getting married, just wait until afterwards?

 

Well, it looks like that day has come. I'm not saying this to gloat--but you really need to wise up and start using your head, OP. This is what you signed on for, remember? Now you're here talking about an overbearing mother-in-law and prenuptial agreements in the case your marriage doesn't even last 3-4 more years. And you two are newlyweds?

 

I think you should do everything in your power to nullify this marriage as soon as you can. Give her the house, cut your losses, and move on.

 

Sorry to say but I agree with this post and was thinking the same thing.

[Anderson Silva]

Remember when you were debating marrying this woman and one of your reasons with going ahead with the wedding was that it would be too complicated to cancel out all the finances already spent? Remember when I said to you that if you thought the finances were hard before getting married, just wait until afterwards?

 

Well, it looks like that day has come. I'm not saying this to gloat--but you really need to wise up and start using your head, OP. This is what you signed on for, remember? Now you're here talking about an overbearing mother-in-law and prenuptial agreements in the case your marriage doesn't even last 3-4 more years. And you two are newlyweds?

 

I think you should do everything in your power to nullify this marriage as soon as you can. Give her the house, cut your losses, and move on.

 

Yes I remember.

I guess I'm making mistakes.

[RedDress]

For the house downpayment - if you have $20k, you should each put in $20k for a $40k downpayment and let her invest the rest. She should keep it in a separate account and not co-mingle the money. Then (and you should check with a lawyer but) - in most cases, this would be protected as money she had prior to the marriage and would not require a pre-nup (as long as it never touches a joint account).

 

For ongoing expenses, this is what a prominent financial advisor that I listen to advises.

 

Add your salaries together = $45k + $70k = 115k

That means that you bring in 60% of the income (70/115) and she brings in 40% of the income (45/115). Your expenses, including mortgage, should therefore be split 60/40.

Have a joint account for the joint or "family" expenses (if you have kids, their expenses would be "family" expenses. Maybe you decide that medical expenses are "family" expenses, etc).

The remaining goes into your own separate accounts. So - dollar-for-dollar, you'll have more of your own money to spend or save, but percentage-by-percentage, it will be the same.

Revisit the budget every year for new expenses or changes in salary, etc.

 

To me, this is most fair. And the truth is... you will likely "benefit" from her 80k savings and she will likely "benefit" from your extra spending (or saving) money.

[mhowe]

Then stop!!!!!

 

You don't take loan. Wife can.

You document how you are dividing bills and who pays what -- because I am 100% certain that it will be needed down the road.

You do NOT in any way shape or form allow her access to your money.

[camus154]

Have you actually closed on this house yet?

[mhowe]

Have you actually closed on this house yet?

 

WAit --- you have $20K for down payment, and the "loan" is what your wife could, emphasis could, put down.

So there is not house yet?

[Lester]

I can’t count how many times I’ve heard a divorcing wife say; “he never trusted me.”

Following pop culture advice… You’ve sowed the seeds of earthy perdition. Now all that’s needed is time for it to ferment.

 

Instead, trust you wife and pool money, heart and soul. Leave the home front up to her.

 

 

Great marriages are like ocean cruises… minus the lifeboats.

[Anderson Silva]

Have you actually closed on this house yet?

 

 

Our closing date is end of March and our finances are all in order already.

[Anderson Silva]

WAit --- you have $20K for down payment, and the "loan" is what your wife could, emphasis could, put down.

So there is not house yet?

 

Incorrect. I have 20K for downpayment, she has 100K for downpayment (this is not in question and going towards the house firmly) and the 100K in question is ADDITIONAL money that she's encouraging we take from her mom as a "loan". So now we have 120K down and if we take from her mom we would have 220K down.

[camus154]

Our closing date is end of March and our finances are all in order already.

 

Picture me red-faced shouting this at the monitor as I type these words: DO NOT CLOSE ON THIS HOUSE.

 

If I remember correctly, you might lose whatever earnest money you've put down. But that's NOTHING compared to signing up for more than A HALF MILLION DOLLAR investment with this woman.

 

I could go hoarse trying to tell you this. If we lived in the same town I'd take you out for a beer and wouldn't leave until you at least considered the idea. It's not too late to reverse gear, OP.

 

Look, you married this woman, fine. That doesn't mean you need to go out and buy a $600K house with her. Use. Your. Head. You're already fighting about money. Her mom already wants a vested interest in your affairs. You're already talking about prenups and whether you even make it a handful of years together. If the light bulb's not going on, you've got your eyes closed.

 

Go rent somewhere for awhile. Take your marriage for a test drive for a handful of years and see how it goes. If you can work it out together, great. But I can promise you, if you jump into an investment of this magnitude with so many stipulations, you will rue the day a year, two years, several years from now.

[pl3asehelp]

Incorrect. I have 20K for downpayment, she has 100K for downpayment (this is not in question and going towards the house firmly) and the 100K in question is ADDITIONAL money that she's encouraging we take from her mom as a "loan". So now we have 120K down and if we take from her mom we would have 220K down.

 

And she got her 100k down payment as a gift as well? So mom is basically contributing 200k to this house? I wouldn't even be comfortable letting her put money down that was a gift like that. Essentially, I would't take on a financial responsibility like this with someone who is in the habit of letting others give them large sums of money. It would be a red flag for me that she doesn't know how to sacrifice and save to get the things she wants, which is a mandatory skill unless you have someone else taking care of you, as she has had.

[avman]

OP this sounds more and more like a disaster with each new bit of information. If you're already fighting at this level and you are newlyweds how can you really expect this to get better over the years? The whole loan idea by her mother was a horrible plan and it's only getting worse. It sounds like you already need to see a lawyer and the marriage just started. That really doesn't bode well for a trusting relationship.

 

Your idea of these legal prenuptial agreements don't sound like they will hold up I'm afraid. Plus you are already married. That really complicates things and in some states you can't even create such an agreement once the marriage begins. You need to talk to a lawyer to figure out whether any of this would really protect your interests.

 

Have you considered some counseling for yourself? I think you may need to take several steps back here and look at the big picture. I don't think making any of these investments is a good idea right now when it's very clear both of you are not on the same page here.

[avman]

I can’t count how many times I’ve heard a divorcing wife say; “he never trusted me.”

Following pop culture advice… You’ve sowed the seeds of earthy perdition. Now all that’s needed is time for it to ferment.

 

Instead, trust you wife and pool money, heart and soul. Leave the home front up to her.

 

 

Great marriages are like ocean cruises… minus the lifeboats.

 

Trust is a two way street Lester and it's pretty obvious there is a lack of it by both parties here. I don't see where having the OP walk into these situations blindly is a wise choice and it has all the makings of creating lifelong devastation to his finances. It is foolish to have blind trust in a person who behaves in an untrustworthy way.

[abitbroken]

The more I read...I would back out of this house. Two people with no kids do not need a $600,000 house as a starter home. Get a condo or a townhouse or a smaller house and work on your marriage without all the financial distractions - even buy it outright. I also think that based on all the threads you have started since October, I agree that this looked like it would be a difficult marriage before you tied the knot. I thought you guys were getting married in the spring? I guess you speeded up the date. Maybe she was afraid you would walk away. This is just all a mess. Refuse mom's money and if she wants to leave you over it - pack her bag for her.

[iamkaylee]

I'd put that 20K towards a lawyer and an annulment if I were you.

 

This is a disaster just starting. Think avalanche. A real big one too.

[catfeeder]

This makes perfect sense, and I would not overlook it.

[superfan]

Honestly, finances in a marriage SHOULD NOT be this hard.

 

I realize that part of this comes from the fact that the two of you have a bit of a disparity in your annual incomes. I understand that you feel the need to be as fair as possible with her, but just reading this made my head hurt. My husband and I have separate chequing accounts and one joint savings account that we both put money into. We split the rent, and alternate on things like who pays for gas, or who buys groceries, etc. Now it is a bit easier for us because we both make about the same amount of money. However, if one was making significantly more, then what we each pay would be adjusted accordingly.

 

It might sound like we are doing things 'separately', but in fact we are not. We maybe have separate accounts, but we both have access to each other's accounts, know our passwords and refer to it as OUR money. This is key. When you are married to someone, you are SHARING your life with them. I am not saying you should not protect yourself. I am not saying that you shouldn't have a prenup (if it makes you feel safe, do it).

 

However, if EVERY financial decision you make is predicated on the thought that you 'might break up somewhere down the line', then you need to re-evaluate things in a big way.

 

My husband and I don't own a house (neither one of us can afford one yet - we make about $20 000 a year each). However, if we did, we would NOT be taking money from any family members (loans or otherwise this is recipe for disaster) and we would not be purchasing a house in which a loan like that would ever be necessary.

 

Based on your income levels and what you are both able to put down, you could probably get a home in the $300 000 range with very minimal mortgage payments. Why does she feel it necessary to buy a $600 000 home and go into debt with her mother paying it off?

 

Bottom line, if you need to go through every single thing you spend and split it 70/30 or whatever the percentage is with a fine tooth comb, then you are missing the essential part of what it means to be married - you are both in this together (and should be for the rest of your lives).

 

I have over $50 000 in debt from my student loans. My husband doesn't HAVE to help me with them, but he will, because he is my husband and whether that comes out of his paycheque or not, it still comes out of our joint finances. The government determines what I have to pay back based on BOTH of our incomes, not just mine. You cannot possibly keep everything separate in a marriage and if you insist on trying (or if you can't do it any other way) your marriage is going to fail.

 

My advice? Don't buy a home yet. Just be married for a while and see how things work together. If you can't do that, at least the divorce won't be any messier.

[camus154]

Any updates, OP? March is quickly approaching.