Hey, readers! Money Mom is now My Two Cents — an advice column for people who want to be better at money. Got a question? Send it my way [email protected].
Dear Charlotte,
I’ve been living with my boyfriend since August of this year. We are both recent college grads, and I lucked out in landing a great, well-paying (probably too well!) nine-to-five job a few months after graduation. My boyfriend, on the other hand, has been stuck in a miserable minimum-wage retail job and is trying his best to land something better, to no avail, which has been wearing on his self-esteem.
When we moved in together (we rent a one-bedroom apartment in the Bay Area), we agreed that I would cover a little more of the rent and pay more of the bills and expenses. I was under the impression that, within a month or two, he would find a better job and things would even out again. I was also okay with this because while I was unemployed for two months he supported me financially and emotionally. But it’s been almost four months now, and although he is very close to landing a great job, we recently had a worrisome conversation.
I asked him if, once he lands a job, we could swap financial roles for a couple months to even out the amount of money I’ve covered for him since August. He responded with a shrug of his shoulders and an evasive “I don’t know.” This is not what I was expecting. I thought that everything I’ve been helping him out with financially would be repaid at some point, in some form, whether it be rent, bills, or groceries. When he supported me when I was unemployed, I still paid him back a small lump sum for what he covered, once I was financially able to do so. I’m slowly realizing that maybe he doesn’t intend to do the same.
Now, the more I support him financially, the more I think about how much money I’m not going to get back. It’s getting to the point that I’m worried I’m not taking care of myself. I’m only 23, in my first full-time job. I have barely any savings and this worries me. Am I crazy for even helping him in the first place or for so long? I don’t want to end up resenting him, or feeling contempt over this situation. I just want him to acknowledge what I’ve been doing for him, and respect me enough to want to give it back in some way. How can I communicate with him in a way that he understands what I’m feeling and what I want?
—Confused and Resentful
Dear Confused,
The problem with lending money indefinitely is that you start to judge every little thing the loanee buys, and all the ways he spends his time. No matter how generous you are, once you start worrying that your money might never return to you, it’s like a pea under your mattress. You can cover it up with fluffy self-assurances, but it’s still there, keeping you up at night.
Of course you’re empathetic to your boyfriend’s situation — you were in the same shoes just a few months ago, and he had your back when you needed it. You live with the guy and can see firsthand that he’s not exactly enjoying this scenario. But neither are you, and it’s time to admit that — to him and to yourself. Providing emotional support is one thing; financial support is another.
It’s time you took more ownership over your job and the paycheck it provides. I think it’s telling that you believe you’re “almost” overpaid — trust me, you aren’t. (I recommend that you do some research on what your colleagues, or peers in similar jobs at other companies, are being paid — particularly the male ones.) What’s more, you seem to feel guilty for what you’ve accomplished, perhaps because you’re watching your boyfriend struggle to do the same. While “luck” does play a role in employment, it’s not like you won a random raffle. Your job and money are yours. This can be a weird concept after college, where space and food and clothes were shared so openly, and I certainly struggled with the transition myself. But I now regret a number of times I let things slide in my early 20s (with roommates in particular) because I didn’t have the confidence to draw boundaries.
“My rule of thumb is: Only lend money when there’s a clear, written, contractual agreement. Or else, give it as a gift,” says Manisha Thakor, the director of wealth strategies for women at Buckingham Asset Management and the BAM alliance. “If money falls in that space between gifting outright and having a contract for repayment, then it becomes exactly like what you’ve described — a point of conflict that will eventually cause the relationship to implode.”
Thakor advises a two-pronged approach: First, discuss how you’re going to manage your finances as a couple going forward; then, address what you’re going to do about the money you’ve already lent him.
“This conversation will be unpleasant, but think of it as a disinfectant,” Thakor says. “Explain that you don’t want money to wear on your relationship. You feel uncomfortable bringing this up because he helped you, and you are profoundly grateful, but you paid him back, and this reverse situation has morphed into something imbalanced. How can you find an arrangement where you both feel good about what’s going on?”
Practically speaking, a very simple idea is to keep track of all your shared expenses from this point forth (use an app like Splitwise, or open a joint credit card) and then keep a running tab on how much more you’ve contributed. It sounds unromantic, but you can compartmentalize: I know one (very happy) couple that sits down at their kitchen table once a month, highlights every line item on their respective bills that they agree is “shared,” Venmos one another for the difference, and then never speaks about it otherwise.
The next step is to negotiate the terms of how he’ll pay you back. It’s probably occurred to you that he’s avoiding this discussion because he’s not sure how he’ll do so — and, given his flagging self-esteem, has some doubts about when he’ll have the means. Still, it’s not rocket science. Maybe when he gets a new job, he’ll dedicate 10 percent of every paycheck toward the lump sum he owes you. And perhaps from now on, you’ll only lend him a certain amount every month, for a certain period of time. “Think hard about what you want,” says Kathleen Kingsbury, the author of How to Give Financial Advice to Couples. “No matter how much you love this person, you need to ask yourself: What are you willing to do, financially? And how is that going to impact you, financially?” If push comes to shove, what happens if he can’t — or won’t — repay you retroactively? You’re also right to worry about your savings — if covering for your boyfriend is preventing you from putting away at least 20 percent of your salary a month (and at least 10 percent into a 401(k) or retirement account of some kind), then that’s a real problem.
On a macro level, another point of these discussions is to understand the assumptions you have about money, and verbalize your expectations (better yet, write them down). “Especially when you’re new to blending finances, it’s easy to assume that your significant other thinks about money the same way that you do,” Kingsbury says. “He could be the greatest guy in the world and still not have the same beliefs. It’s important to bring those differences out into the open.” If what he says is not what you want to hear — say, he believes that your money was a gift, and has no intention of paying it back — that’s still constructive information. “It’s a positive discovery, even though it’s upsetting, because you’re learning that you think about money very differently,” says Kingsbury.
Call me a pessimist, but I’m a big believer in approaching joint finances from the perspective of what happens if you break up. For married couples, marital law generally provides for discrepancies in the case of a divorce. But if you’re just living together, you have to create these rules for yourselves. Once you and your boyfriend have done so, both Kingsbury and Thakor strongly recommend putting your financial agreement in writing and then getting it notarized (a simple process on websites like LegalZoom). It won’t be fun, but hashing out these points of contention now is infinitely better than stewing about them until they’re unsolvable.