Live Frugally or Die Broke

“Cheating” on Finances



I was driving around in my clunker last night, delivering pizzas and browsing through AM radio stations. I came across Dave Ramsey doing a show titled “Financial Infidelity” and listened intently for the full hour. There were several alarming statistics Dave spouted off. I believe he said, more than 50% of couples do not communicate financial expenditures with each other. Essentially one of the couple has no idea what the other half is spending or how much debt they are in.

Discovering the Problem

For someone who is a recent college graduate, with debt up to my eyeballs, I understand how discouraging it can be to track finances. I fear many graduates are so far in debt, they believe another few thousand is a drop in the bucket. They don’t talk to their significant other about financial planning or create a solid debt reduction plan. Sometimes I feel like I am playing some sort of spy when I approach this problem.

I know my girlfriend hides a lot of her expenditures from me and I can only ballpark how much debt she is in. My variance could be off as far as $20,000. This creates all sorts of problems in our relationship. We would both agree, finances are the number one problem in our relationship and most likely the reason we argue all of the time. It creates a lot of tension in our relationship and furthermore prevents us from moving forward.

The Most Evil Loan Shark in the World

I don’t like being snoopy. I hate it when people dig into my stuff and infiltrate my mail without me knowing it. However when I see all the envelopes she gets with names like; JP Morgan, Citibank, Wells Fargo, Sallie Mae, etc., then I tend to get very curious and alarmed. Perhaps the most alarming of these letters are the ones from Sallie Mae. I hate Sallie Mae more than Satan himself. In fact the company should probably change their name soon. Anytime the word Sallie Mae gets thrown around, I see people physically shutter.

More and more college students are ignoring their debt loads and continuing lavish lifestyles, out of sheer contempt for their creditors. When you hear the stories of Sallie Mae and what they do to financially inexperienced teenagers, it tends to conjure up images of greedy bankster fat cats licking their chops.

“Sallie Mae is wrong. They’re evil greedmongers that only care about dollars and cents.” -Anonymous Poster on Credit Boards

Just take a look at some of the forum messages at sites like The Great College Hoax or default stories on The Credit Boards. It’s a shame we have abandon our young ones and yield them to the monstrosity known as Sallie Mae. I am strongly against government intervention into free markets such as the student loan industry. I fear that it’s not a problem that should be left to reform but rather one that should prompt individuals to get educated.

A typical Sallie Mae loan has a much higher interest rate than that of it’s federal counterpart, the U.S. Government. These loans also carry higher principle balances. You can imagine how much a $60,000 loan at 10% interest would take to pay off. You can use the “economic rule of 70″ to simplify this. Take 70 divided by the interest rate. In this case 70/10 = 7 or a doubling of the original loan amount every 7 years. So $60,000 quickly becomes $120,000 and so on and so forth. While students tread water in the murky depths of this economy, institutions like Sallie Mae are quick to shove young graduate’s heads underwater, until they drown or cry out to their loved ones for help. It makes me quite sick.

Look For Good Signs

If you are curious about whether or not your significant other may have debt problems, I give you some signs. As I mentioned before, the mail is usually the first clue. The bills and notices will be coming every other day. If correspondence comes from companies such as American Express, it could actually be a good thing. Credit cards such as this are usually only sent out to people with stellar credit. Investment accounts such as Vanguard, TD Ameritrade, and T Rowe Price, can be very good signs that your spouse’s financial house is well in order. These companies deal with retirement and trading accounts and it’s a good bet your love’s finances are very strong. Pay attention to these subtle cues, as they often lead to the truth.

Co-ed Roommates




I may have mentioned in other posts that I currently live with my girlfriend. We have been dating for more than four years. The discussion on marriage has popped up a few times. The reason we aren’t very keen on tying the knot is mainly because of the costs involved. I just can’t for the life of me spend upwards of $10,000 on a wedding. The costs are enormous for such a quick event. Instead of taking the plunge into even more debt after graduation, I have decided to postpone marriage. I may even decide to avoid the idea all together.

It gets awkward around family members talking about my living arrangement. I come from a very religious family that frowns on this behavior. They ask if we have thought about marriage and why we have been living together so long. It’s not easy or popular to say it’s because of a lack of money. For the longest I thought I was alone with this problem. Instead it is a shift towards a new norm.

The Shift In Our Culture

Times are changing at the speed of light. If I would have tried this a few decades ago, chances are my parents would disown me. The truth is we aren’t in the 1950’s anymore. Men and women have figured out the marriage game. The risks are enormous and the benefits are paltry at best. I can’t name too many people who would tell me marriage is the best thing that ever happened to them. I know even less who actually financially benefited from marriage. Young people want out of the marriage hoax and the numbers would seem to be supporting that. I know that cohabitation leads to higher divorce in the United States, for couples who go on to get married. I found an article supporting that fact here.

The truth is I don’t need a piece of paper or a government to acknowledge the fact I love someone. If I can already reap many of the rewards of marriage for free, then why would I go into debt getting married? It is possible to have a frugal wedding of course. However American women have become so brainwashed with the sense of a luxurious wedding that men don’t stand a chance. It’s either go all out with fancy planning or wait for a guy who will come around and pay for it. Most women scoff at the idea of eloping or having a small wedding.

The Benefits Of Cohabitation

Unless you want to be living in your parent’s basement, go into debt to get married, or live with a bunch of stinky roommates, cohabitation is great. The cost of everything is roughly split down the middle. You can share groceries, utilities, and living expenses that you would normally have to foot on your own. You feel a greater sense of privacy knowing that it is you and a significant other exclusively. As much as I adored my past roommates, it started to get a little old slamming beers and bar hopping after a few years. While it is true I endure quite a bit of squabbling with my roommate/girlfriend it still beats breaking the bank renting a studio apartment.

Don’t be ashamed to have to cohabitate for a few years before you get married. More than 50% of couples live together before they eventually go on to get married. Some end up living together without getting married indefinitely. I would imagine that trend will continue to develop as the economy grows worse. While it may be awkward to watch your friends get married after only a few months of dating, pay attention to what they say after a few months into the marriage. The conversation usually changes from being a blissful couple to being straddled with debt. Only finance a marriage when you can pay for it out of pocket. No one should ever have to go into debt to enjoy the benefits of sharing life with another person.