Debts Vs Savings, Please help!

moneysaver2012_2

Hello
I am in a situation that is really concerning me. I am a single mum to two daughters and I have been living on my own with them for 8 years since my divorce. During that time the one thing that I have loved is being able to take full control of my finances.

I love saving and have saved as much as I can without going without anything to important. I have always taken the girls away abroad each summer, and they have had some expensive birthday/Christmas presents and have all they need.

I have no debt/overdraft at all and rent a house. I work 23 hours a week and get working and child tax credit and some Housing Benefit.

I don’t have a car (though I can drive) because I can get where I need to by public transport much cheaper , I have never smoked or drank more than a couple of glasses of wine every few weeks, I don’t have any hobbies that cost lots of money and am very frugal with shopping, I research everything before I buy, subscribe to all the voucher sites to get the best offers, do online surveys for extra money, always take packed lunches to work and make them for the girls, never have coffees out and read newspapers online etc...

I have some savings which are in the best ISA I could find this tax year (all declared for Housing Benefit!) which I don’t touch and a separate account for the girls maintenance and Child Benefit so the money is always available if they need anything, plus my current account for spending money from which I move the excess over to savings once a month and a bills account.

Now here is the dilemma. I have quite recently met a man who is incredible in every way. We are thinking about settling down together but he comes with financial baggage. When he was married he ran up debts on loans, credit cards, an over draft and various HP agreements. His parents have helped him out but he still owes around 15K.

The debts were taken on in his name only as his wife didn’t work. Now he is living with his parents which can’t last forever. He pays around £365 per month in child maintenance and approx £400 in servicing his debts.
We have talked about how our joint finances would work and he said his debts would be his debts, my saving s would be my savings. I have said I am happy to spend them on things we need as long as there is still money set aside for my girls if they need anything. But I know it doesn’t make sense to have savings (at a 3.1% interest rate) and debts at a much higher rate.

We are looking into his debts and trying to get them down before we make any move. He has a second vehicle to sell (leaving him with an old run-around) but it will only get around £1500 but it should pay off his overdraft. The HP for the dryer is only £300 so he is going to pay that asap, that only leaves the loan an credit card. The longer he can stay at his parents then the more he can pay off his debts.

I couldn’t pay off all his debt but my savings would help a lot.

If we moved in things would be very tight, we’d have our salaries, child maintenance for my girls (less than £200 a month) Child Benefit and a very small amount of Tax credits (£45 per month)

He earns more than me so we would contribute approx the same per month once his debts and maintenance have been paid.

But I can’t get my head around the fact that in paying off his debts I would be paying for his wifes new car, the HP on her tumble dryer (which I make a conscious decision that I couldn’t afford) her designer pets, her nights out and fancy holidays, her cigarettes (heavy smoker) booze (heavy drinker!) But if I love him enough and we are going to be together then thats just what I should do to relieve us of some of these monthly repayments.

Its going to be a real lifestyle change for me and I feel the pressure is on because his parents are keen for him to move on. We are extremely happy and in love and can’t imagine a future not being together but I started from nothing after my divorce, I had zilch and had to rebuild my life. I am worried about the financial pressure that will be put on our relationship if we struggle to pay everything monthly but the loss of my savings will be hard for me to bear too.

Sorry for the length of my post!

Confused!!

Can anyone offer any advice? Thank you.

Sally

SavingPennies_2

Don't do it!

You have worked hard and no doubt made sacrifices for what you have. He has proved himself to be useless with money (don't let him blame him wife for the spending).

Help him budget by all means, but wait till he has paid off his debts before you move in together.

Id be put off that he has taken handouts from his parents and now (potentially) from you, a single mother. He needs to take responsibility and prove himself. He is in a good position now to pay them off as living with his parents will be v cheap.

Gillyx

Agree with above, he should be sorting out his own debts before moving in with you. You yourself say you're very frugal to give your daughters a decent life.

As a grown man, he shouldn't be using you a single mother to help pay off his debts.

thunderbird

Agree - don't even consider it!! You've only just met him.

browneyedbazzi

Hi Sally,
I'm in the opposite situation to you. I'm divorced and one of the reasons was my ex's inability to control spending (partially I suspect due to a gambling problem but that was never confirmed). I came out of that relationship with a fair bit of debt of which I still have £7k to pay off (most of that debt was accumulated paying for things for my ex and all of it was in my name because he couldn't get credit. Stupid but I was young and naive!). I am paying interest on my debt but it is fairly minimal because I have a good relationship with my bank. On my salary I can afford to make the repayments and will be debt free in 2 years.

I'm now planning to move in with my bf who has been very good with money, doesn't have any debt (other than student loan that will be paid off very soon) and has considerable savings.

I wouldn't dream of asking him to use his savings to pay off my debt. If he offered I would say no....he's a lovely chap and I expect he would see it logically as you do with regard to freeing up salary so we could afford a better place, not paying interest etc. Even so, I couldn't help but feel that it would throw off the balance of the relationship and possibly lead to some long term resentment.

I'm not saying you definitely shouldn't do it, every situation and relationship is different. Just please think very carefully!

Money_maker

moneysaver2012 wrote: »

booze (heavy drinker!)

This little snippet could be trouble. You've met him recently, are you mad?

Agree with everyone above ^^^^^^^^^

moneysaver2012_2

Money_maker wrote: »

This little snippet could be trouble. You've met him recently, are you mad?

Agree with everyone above ^^^^^^^^^

Yes, she was a heavy drinker and smoker. He doesn't do either.


Sally

pinknfluffy0

I agree with the others, you have worked hard, make him show he is working hard too before you move in together. You will loose benefits etc when he does. Keep the savings you have now separate. When you move in together start new saving that are you both of you then you have yours to fall back on should something happen.

Dave101t

of course he is wonderful in every way....he is on best behaviour to get your money.

moneysaver2012_2

Hi again

Let me add a few things, he has never asked me to pay anything off for him, this is just me feeling I could and should help if our finances become joint.

We have only known each other for 4 months and it would probably be after Christmas, maybe Feb before we move in, even with the pressure on him to move out. He is aiming to pay as much as possible off before then.

Sally

moneysaver2012_2

Dave101t wrote: »

of course he is wonderful in every way....he is on best behaviour to get your money.

I am positive this isn't the case, he doesn't know about my saving bar a small amount.

Sally