what would you do?

[teetee]

I need some objective advice here. The question is - should I finance the e-ring on my credit card but he promises to pay for it? I don''t want to make this too lengthy but I''m afraid I need to give you all some background info.

We have been together for over 10 years...met in high school and started dating in college. A year ago, he asked me to start looking at rings. We were looking for a month or two and I found the setting that i want but then he said it will probably take him a while to save up. About three months ago, he actually went diamond shopping (without me) at the jewelry district with cash in hand and didn''t buy anything because he didn''t see anything he liked. So then he ended up paying off one of his high interest credit cards with the money. He recently got an offer from someone to buy his internet forum. So he will have a big chunk of cash soon but the deal has not gone through. He asked if I would be willing to put the diamond purchase on my 0% credit card (promo rate until March 0 so that he can use the cash to pay off one of his higher interest credit cards, I think the highest is at a 28% rate. He offered to set up his checking account as a recurring payment for the minimum and will take care of that balance. Being the practical person that I am, I am inclined to do this because it makes fiscal sense but here are the BUTS...

1. I already have a balance on that 0% card of about $6K because I helped him with his car downpayment last year. He has been paying me back but we''ve added other charges on to it and he''s paid those back so over the past year I would say he has paid about $1K of the original balance.
2. I would want him to be put on the credit account as a joint owner so that he is legally responsible for the debt and he is fine with this. I think this will actually help his credit score because there is a high limit on this card and it has a good payment history.
3. He is planning to go to law school so when we get married, I will be the only income earner. However, I don''t know if law school is for sure because he still needs to apply and even though he has a great lsat score, his gpa was not good. But potentially, this will cause us to be in a lot more debt.

So what do you guys think? I want to do this because I know that he will be responsible for the debt but I also know that it is probably not the best financial situation to get myself into. I am 29, own my own home, have no car payment and have no credit card debt.

I don''t want to make this any longer than it already is so feel free to ask questions and I will repond. Thanks in advance for any responses.

 

[Independent Gal]

Well, everyone handles their money differently, but personally? I would not be comfortable making any kind of major purchase, including an e-ring, when there was that much debt floating around. Why not just get a simple ring now (a gem stone, e.g.), and get a diamond for an anniversary? From what you say, he has some pretty serious debt problems - which are about to become YOUR debt problems too when you marry - with the possibility of more to come, and a diamond is a luxury purchase.

It's up to you, of course, but if it were me? I would not let him spend more than a token sum on a ring until he was debt free. You don't need a diamond to get engaged. My mom didn't have one until she'd been married 24 years, and we originally thought we'd get engaged without one.

But that's just me. You have to decide what you're comfortable with. Just remember that his financial problems become your financial problems when you marry.

ETA: I guess what I'm saying is: ideally, he should first pay off ALL his other debt, and then he can make a luxury purchase. Buying more stuff when you haven't yet paid for the stuff you already have just isn't smart in the long run.

 

[Sha]

I agree with the above post. It sounds like he already so much debt to take care of, an expensive engagement ring will put him that much further in the hole - interest free or not. It really isn''t wise to stack more debt on top of what he has already. He still has a huge balance left on the car downpayment loan.. . when is that going to be finished? He should take care of that first. When he starts law school, is he going to be able to continue the car payments? If not, how will be able to afford to pay off for an engagement ring as well?

I know that you probably would love a nice engagement ring, especially after being together so long. But maybe he should look at something he can pay for out of pocket right now. As IG said, you can always get something nicer when the two of you are more financially stable.

Just curious...how is he with managing his money? Are you comfortable with it? It''s interesting that he has so much debt and you are virtually debt-free, with assets. It''s true that this debt also becomes your issue when the two of you are married. I ask because my first husband always had problems with money... he could never hold down the job and so was always in debt. Although I was in school when we married, the savings I made from my part-time job often had to help us pay the rent. It was stressful...we had collectors calling our house all the time to collect money owed to various people. He had also been engaged before and his ex-fiancee bought her engagement ring. He still hadn''t paid her back when we were married so she was calling our house as well. I also had to help him make a downpayment on the car .. cause my credit was good and his was bad. In the end he had to file for bankruptcy cause he could n''t pay off all that he owed. Anyway, your situation might not be anything like this, but money can be such a big issue in relationships, I just wondered if y''all are on the same page in terms of spending and saving, debt accumlation etc.

 

[Stardust]

I have no problem with people contributing or helping out with their own ring but the amount of debt does seem quite high. I assume that a budget has been worked out for when you are supporting him through grad school especially considering the amount of debt he (soon to you as well) have?

If it were me, I''d either get engaged without a ring OR a ring that will double as a wedding band OR a smaller solitaire that can be put into a necklace or become one of an earring set when more money was to be had. But I''d be careful with the last option, my partner is quite attached to my ring and sees "upgrade" as a horrible thing. I know not all guys do this, but I''m staring to think they''re more attached than we are with the stories I''ve heard lately

 

[lyra]

I agree with the other 2 responses. You seem to have an excellent credit record. If you add him to this account and he charges beyond what you are comfortable with, you will have no recourse, and it would just add stress to the relationship, not to mention a debt that you would become responsible for. Let him get his act together and give you the diamond you like as an anniversary gift. That would be a sensible compromise. Or a token engagement ring with a coloured stone as IG suggested.

 

[sera]

Date: 9/15/2007 2:04:16 PM
Author: Independent Gal
ETA: I guess what I''m saying is: ideally, he should first pay off ALL his other debt, and then he can make a luxury purchase. Buying more stuff when you haven''t yet paid for the stuff you already have just isn''t smart in the long run.

Ditto.

He paid off $1k of the original $6k... adding another few k to the now $5k would make me very uncomfortable. It''s great he is paying it off, but personally- as much as I would want The Ring- I would rather focus on getting the debts paid off and get a temporary band. Is he planning on continuing to pay off $1k a year? That would take a very long time and in that time a LOT of things could change... I wouldn''t count on money coming into the bank but only on the money already there- stuff happens and what you count on and plan for doesn''t always happen.

 

[KimberlyH]

Ditto what IG said...plain wedding band should suffice with plans for a wedding set at your 5/10/whatever anniversary. I''m anti-debt and it sounds as though you are too, so that would be my 1st priority.

 

[sleeping beauty]

I agree with all the other post here. After all March 08 is only six months away after which it will start accruing interest. Its taking him a while to pay off a car loan and if he goes to law school, no income and debt it might be a bit of a burden on you. Just my 2cents.

 

[DMBsGirl]

How about buying the setting you want with a high quality sim in it that you can replace when money is not so much of an issue?

 

[neatfreak]

The whole thing seems really odd to me. I think you two need to sit down and have a talk about finances and $ and make sure you are both on the same page. Him borrowing $ from you a year ago, then needing to do it again so soon without paying off the first debt, you being willing to work so he can go to school...just sounds like a bit much to me.

 

[Haven]

PLEASE DO NOT BUY A RING ON CREDIT!

I know everyone handles their finances differently, but I NEVER buy ANYTHING on credit except for two things: homes and cars. And I don''t buy cars if I can''t pay them off in two years or less, and homes in ten years or less. I''m not sharing this because I think you should adopt this method, I''m just sharing to show you that it can be done, and to tell you that it feels so good to be financially responsible. FI didn''t buy my ring until he could pay cash for it, and that is the only way that I wanted it.

It sounds like you are financially stable, and that you''ve built up a good credit record for yourself. Please don''t (potentially) ruin that for a piece of jewelry. I always tell myself: If anything is worth having, it''s worth saving for. I''m sure I read it somewhere when I was younger, and it is so true.

And as an aside about law school--I went to law school on a full scholarship. I ended up quitting after the first year to become a teacher, but make sure your BF looks into schools that have deep pockets and can offer scholarships. I still went to a top school, so I didn''t have to compromise quality for a free education. (Of course my top choice offered me nothing more than admission! But that''s okay--better to graduate debt-free, right?) The school I attended originally offered me a scholarship that covered around 70% of the tuition, and I asked if they could come up with more and they did, so he should ask ask ask for more money when he''s going through the application process.

Good luck, I know this is a tough situation. Have you considered getting a ring with something other than a diamond as the center stone?

 

[Independent Gal]

Wow Haven, I''m impressed! I only wish I could have my house paid off in 10 years! But 15? Probably.

Seriously, Teetee, think about the situation from a medium term and long term perspective. Are you really comfortable with this?

 

[wolftress]

I''m a bit late coming into this, but I really would not put on more debt on the amount your boyfriend already has. I''m sure he''ll pay it off, but it''s an added stress on you and your relationship that you don''t need. You can always upgrade in the future. I like the suggestion of buying the setting you love, and putting maybe a semiprecious stone in it. In due time, you can replace the stone with a diamond.

 

[Haven]

Oh, Indy, don''t be--I lived at home for far too long after college to make that happen. But it ''s my goal, and I''m going to reach it, damn it.

To be serious, though, I''m proud to be financially super-responsible, and the starting out my adult life by living at home for a few years was key, for me at least.

 

[teetee]

Wow, thanks for all the great responses. I was in the middle of replying earlier but didn''t have time to post because he came by to pick me up for lunch. We had a chance to talk more about this so here''s an update.

I was starting to feel like a total brat this morning for wanting the ring but I thought about it and realized the bigger picture. The reality is yes, I do want a nice diamond ring but what I want even more is to get married and start living our lives together. I thought it was me pressuring him to get a diamond ring but after suggesting that he just pick out a band or something smaller and unique instead of a traditional e-ring, I discovered that he himself wanted to get me the diamond ring. I expressed that I was concerned he was adding to his debt but he explained that he''s not adding to the debt, he is just "not reducing his debt." So in other words, he sees it as using the cash to pay off the higher rate cards since the new charge would be on a lower rate. So instead of using cash to pay for the ring, doing it this way would save him a lot of money on the interest charges each month. Does that make sense? I also asked him about his plan to repay his current debt and he thinks he can have it cleared in 3 years. So what we left it at was that he is going to reduce the amount of money he wanted to spend on the diamond to the original amount he intended and charge it on his own card so that I wouldn''t need to worry about it.

Independent Gal - part of the problem with his debt is he does enjoy making these luxury purchases. But I think he will be better with this now that we discussed this issue today.

Sha - for the most part we agree on money but obviously I do a better job of spending within my means than he does. Before, I never really questioned his spending because it was his money but as we are getting closer to marriage I am being more vocal about it. I have to admit, sometimes these purchases are gifts for me so it is really hard to say "no I don''t want that wallet that matches my new purse so go return it and get a store credit."

Stardust - we haven''t gotten to the school budget question yet because we don''t even know if he is going. And he said today that if he gets in, he won''t go until a year from now so he can continue to work at his current job for another year.

lyra - if I add him to the account, he would not have access to make new charges.

sera - the reason he has paid so little of the car debt is because it is on a 0% card and I told him that as long as he pays it off by March, I am fine with him paying only the minimum each month. He is focusing on paying off the higher rate cards first.

SB - he will have a year before he goes to school so he will be able to work on some of the debt payment. You''re right, it will be a burden but I just can''t wait any longer for him to be 100% debt-free...

DMBsGirl - I don''t know if I would be comfortable showing the ring to people...I would feel weird not disclosing the truth.

neatfreak - thanks for the comments, see above for responses.

Haven - I am with you on your rule. I wouldn''t have lended him the credit for his car unless I had the cash to pay for it if anything were to happen. I am not going to sacrifice my perfect credit record. Having purchased a condo, I know how much your credit score matters. And actually he has a decent credit score himself, he just has a high debt to credit ratio. Thanks for the tip about schloarships...I will mention that to him. PS - don''t feel bad about living at home, I know many people who did that just because the cost of living is so high where we live.

wolftress - see above about the explanation about adding more debt vs. not reducing the debt. Does this make sense or is it just bs?

So do this new information change anyone''s original thoughts or do you all think it is still a bad idea? I think he has decided to use this incoming money to pay off his higher card and then try to renegotiate for a better rate and then charge the diamond on there. But I know he could save money if I could help him put it on my card. After all, some of this overall debt will eventually inherited when we marry, right?

Thanks for bearing with these long posts and I appreciate all your thoughtful responses!

 

[Independent Gal]

You really want to know if I still think it's a bad idea? YES, I definitely still think it's a bad idea, I'm afraid. I think it's a terrible idea. The fact that he wants to get you a diamond ring is lovely. But the fact that he can't afford it because he has no money and a lot of debt means he shouldn't do it. The bottom line isn't whether it's your credit card or his credit card. The bottom line is that he is spending money that he doesn't have, which is irresponsible and scary.

He wants to get you a diamond ring? Well, I want to get diamond studs, a 5K couture wedding gown, and some new clothes for fall. FI wants to get us dinner at our favourite restaurant each month and a nice car (we don't have a car at all right now). But we don't buy these things, even though we have plenty of credit access, because we don't have the cash. Just because you want to buy something and have the credit to do it, doesn't mean you should. Impulse control! Credit is for convenience, not so that you can buy more stuff. It has to be paid off and the thing about using credit to buy things you don't have the cash for is that you don't stop wanting things, as your boyfriend demonstrates, and so you never seem to catch up.

What if he applies to law school and he CAN'T get a loan to go because he already has so much debt? What if he hasn't paid it off by then, and then he can't keep up? Is he going to suddenly stop wanting things, and wanting to buy you things when he has this new mountain of debt and no income? That would scare the HECK out of me. Mind you, I'm in the Haven and you camp: always pay off my full balance every month, own a condo with significant equity, no non-mortgage debt. I simply couldn't marry someone who didn't know how to be responsible with their money. Buying things you can't afford is being VERY irresponsible

Of course you need to decide what you personally are comfortable wtih, recognizing that once you're married, if he goes under, you're going with him, but if it were me, there is no way in heck I would have let FI buy me a diamond if he couldn't pay cash.

Maybe the two of you could meet with a financial advisor and talk seriously about the medium term and the long term?

 

[KimberlyH]

I''m with IG that it is still a bad idea. Everyone I know who is financially secure does not make luxury purchases using credit (and I''m not saying using a credit card is bad, I''m saying don''t purchase anything using a credit card that cannot be paid off at the end of each month so you aren''t throwing money away on interest fees).

Whether the ring is something you want, he wants for you, you both want whatever, it doesn''t change the fact that it''s a want, not a need. Instead of purchasing now on credit why not put a certain amount of money into a savings/ring fund account each month and purchase the ring when there''s enough money to do so? It could take a year, it could take 5 depending on the other debts that need to be paid off, but have a goal in sight and work towards it. It doesn''t make sense to make a purchase that will impede his abillity to pay another debt off, or just to replace one debt with another, however you want to percieve it.

 

[ljmorgan]

I am going to approach this from a different angle, because everyone here and you included know that you shouldn''t finance luxury purchases. But since we all know that, and it sounds like you two are set on doing this, I will add my opinion on the credit aspect.

If you are SET on doing it this way, then yes it would save money to pay off the high interest card with the ring cash that he has saved up. And yes, it would be best to put the ring on a 0% card -- but here are my suggestions.

1. Do not let him put the ring on YOUR credit card -- no matter how "good" he is for the debt. Things do change, and you would be smart not to let him put the balance on your card, and do not add him as an authorized user until you''re married.

2. He should consider getting his own 0% card which is very, very easy to get these days, that offer 0% for 12 months or more. Here is a good list http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=710055

3. Instead of putting that ring on the 0% card, he should do a balance transfer from his high interest cards to the 0% card. That way he is not paying outrageous interest on his balance. Then he can actually use the ring cash for the ring. Or, he can pay off the old debt and put your ring on the 0% card, whichever you really prefer.

4. If he doesn''t have good enough credit to get his own card again... tell him he needs to spend his cash on the ring. If his credit is that bad, you really DEFINTELY should not let him put a balance on your card.

Hope that helps!

 

[luckystar112]

Well, I agree with the others to a certain extent.
My FI took out a loan from his credit union to pay for my ring, but he did it to BUILD credit. He''s also one of those, "Don''t finance anything except house and car" people...except it bit him in the butt because he denied credit cards his whole life. When he bought a house his dad had to be a co-signer because he didn''t have any credit. (Which most say it''s better to have bad credit than no credit, believe it or not.) So, for him it was a strategic move. Hopefully when it''s time to re-finance, FI''s father can be removed. I should also mention that my FI is extremely responsible though.

In your case, I think that you guys should wait a little bit until his debt is reduced significantly. I know that''s not what you want to hear...but it sounds like you are the responsible one. Sounds like he may have overspent a little too much in the past, and now he is slowly learning how to manage his money--but he shouldn''t replace that debt, in my opinion. It sounds like he really wants to get you a ring, and that is sweet. There are just too many "what ifs" though. What if the deal doesn''t go through with his web forum? What if he can''t get a loan for law school? What if something happens and he can''t pay you? What if he totals his car and he needs a new one? What if...what if....what if....
That''s all stuff you need to think about.

If I were you I''d set a limit of like $1000 and get yourself a wedding band. Let him pay off his debt, and when you''re ready to get married, re-evaluate your finances and the circumstances and see if he can buy you a ring.

 

[bee*]

I agree with independent Gal-I wouldn''t buy it on credit. Especially if he is planning on going back to school. As someone who has gone back to college after working for two years, it''s very difficult as it is to afford everything when you have no debt. I think that he should try and clear the debt that he has built up already before he buys more on credit. I also wouldn''t feel comfortable with him putting it on your card. Until you guys are married, I wouldn''t put large purchases through on your card and let him pay for it.

 

[teetee]

You guys are right and what's ironic is I would be saying the same things if it was someone else who posted about this situation. It's just hard when you have to be the one making the decisions. I have decided to not charge the ring on my card. Plus, I'm sure there will be a lot more expenses that we'll incur later for the wedding and moving in together, etc... For now, he is going to pay off his higher rate card with the money he gets from his website and then try to negotiate a better rate on the card. I think he's still planning to charge the ring but I've asked him to keep it at a reasonable level and not go too crazy.

Thanks to everyone who responded. It really helped to hear your thoughts and ideas. I realized that I should have had this conversation 2-3 years ago because now I'm in a situation where I don't want to wait anymore and his financial situation is less than ideal. But hindsight is 20/20, right?

 

[wolftress]

That''s really mature and very wise of you, teetee. You can still get engaged and make a commitment to each other and stay within budget. A lot of people get caught up with their dream ring and wedding, but at the end of the day, it''s only about spending the rest of your lives together. If you and your BF come up with a budget, I''m sure the ladies on PS can help find a ring that''s beautiful and won''t break the bank

 

[pinkelephant]

Hi teetee,
I just wanted to say that I am in a similar situation... my bf and I have been together for 11 years and I just turned 30 this year.
He also has a lot of debt, although from life''s circumstances(no luxury purchases here). We have contemplated financing a ring because of this. Although we are both aware that it is not financially responsible, it''s hard to wait. Anyway, I don''t really have any advice (sorry), but just thought I''d let you know that you are not alone.

 

[Keepingthefaith21]

Making the decision to finance a ring vs. pay for it is very difficult. I know a few guys who pay for half and finance the other half in order to have the ring faster. It’s a very personal decision to make and I am sure depends on the rate you would get if you chose to finance. Obviously it’s better to stay out of debt if at all possible but sometimes that’s just not an option if one or both of you can not wait.

I will tell you that a very good friend of mine actually bought her own engagement ring. Her FI was unable to get approved for financing and she knew waiting for him to save up/pay off the ring was going take a long time. So, she put it on her credit card and the deal was he would make the payment each month. Sadly, a year later, he’s paid her nothing towards the ring.

While she knows if she hadn’t purchased the ring on her credit, she wouldn’t have one, she does lament the fact that the proposal was basically done in the jewelry store and had no element of surprise or romanticism. And yes, she is constantly bothered by the fact that she is paying for her own ring.

 

[FireGoddess]

After reading the whole story, including the fact that he basically still owes you $5K for the car down payment, and that he'll be going to law school (ie. not working)...then I have to say NO - I would not put the ring on your credit card. No no no no no. If it were me I'd rather him get me a really pretty band that is way less expensive than a diamond engagement ring as an 'ering' for now, and get the diamond later on when it makes more fiscal sense. Heck, you could even get a band with a little bling in it. But I wouldn't add the debt of a traditional ering to the debt he already has.

ETA: Whoops, I see you've come to a decision, and I think it's a wise one.

 

[Pandora II]

Date: 9/15/2007 2:56:18 PM
Author: lyra
Or a token engagement ring with a coloured stone as IG suggested.

Just want to add a comment in here.

If you pop over to the coloured stone forum, you will see that a number of posters on PS have colored e-rings, not as ''tokens'', or as ''temporary'' e-rings, but because we PREFER a coloured stone. Diamonds are by no means either the rarest or the most expensive gems in the world, nor the only choice for an e-ring (the English Royal Family have almost always had coloured centre stones.)

It is somewhat offensive to make comments like the above.

Regarding the OP, I really think you should use credit to buy an e-ring. If a man wants to put a ring on your finger badly enough, HE will make the necessary sacrifices in order to do this.

 

[Independent Gal]

Certainly didn''t mean to cause offence, Pandora! I only meant that if, for the OP, a diamond is what she would ultimately want, but her BF can''t afford it right now, then for HER, a less expensive gem stone (such as an aqua or peridot) could serve as a temporary measure. I didn''t mean to suggest that all gemstones are less expensive, that everyone ought to want a diamond or that gemstones are somehow less desirable or beautiful. I was just trying to speak to OP''s specific situation.

I would never think to denigrate your stunning tsavorite! It''s one of my fave PS rings!