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Should You Pay Off Your Partner’s Debt?

Melissa Leong asked an important question in a recent Financial Post column: Should you pay off your partner’s debt?

Three financial experts weighed in with very different approaches.  Gail Vaz Oxlade insists, “he who spent it pays it back”, while Jonathan Chevreau suggests that “marriage is as much an economic union as an emotional one” and that it doesn’t make sense for one partner to struggle with credit card debt while the other earns 1 or 2 percent in a savings account.

Finally, Sandra Hanna, the CEO of Smart Cookies, compromised and said, “student loans, maybe, but credit card debt, no way.”

Should you pay off your partner’s debt?

My wife and I met when we were in school, and student loans were a fact of life for us both.  When it was all said and done we owed a combined $60,000 in student loans, line of credit, and credit card debt.

I say “combined” because by the time we moved in together in 2003 our finances became a joint effort.  We opened a joint account, pooled our income, and started paying off our debts.

It wasn’t a concern that, since I earned more money, I was paying proportionally more toward her debt than she was.  We were in it together.

Automatic payments came out of our joint account and we tried to pay more than the minimum on our higher interest loans.

My wife left the workforce to stay home full-time after our first child was born in 2009.  We decided to live on one income, which meant the remainder of our debt would become my responsibility to pay off.

I made our final student loan payment in 2011 – killing it off with a $2,091 lump sum transfer from our joint account.

I can’t recall if it was my loan or my wife’s, but that’s not the point.  For eight years we treated the debt as “our debt” just like the income we earned was “our income”, even though there was a clear disparity.

Final thoughts

The decision to pay off a partner’s debt shouldn’t be taken lightly, as it can lead to resentment or even divorce if the couple is truly financially incompatible.  That’s certainly true if one partner brings significant savings into a relationship while the other is a spendaholic with heaps of credit card debt.

For us, we met in our early twenties and made all of our money mistakes together – figuring out how best to manage our money along the way.  We got into debt together and paid it off together – and even though it was technically “my income” that paid off most of the debt, I never resented that decision.  I embraced it.

How did you decide whose responsibility it would be to pay off the debts in your relationship?