I don't think debt by itself can destroy a relationship. Lack of proper communication can. I had under $50k debt from my undergrad (international student, double the cost of tuition) and my wife had none. My masters was being paid by my employer while she would be taking about $80k in loans to pay for her medical masters. We were upfront to each other about our obligations and plans of repayment.
I've paid off almost all of my debt and she will take care of hers once she graduates. Even if we both had 100k+ in debt, it wouldn't make a huge difference to our standard of living. We'd simply be paying off debt instead of adding to our savings.
I truly believe that debt by itself can destroy relationships. You speak as a person who has the prospect of actually paying it off. What if your partner coming into the relationship has a lifetime debt that cannot be paid off at you and your partner's forseeable income level far into the future, until your 80 and 90's? Would you want to be paying debt for your entire life?
For someone who has the ability to make 80k a year, debt seems like something that can be managed away. If you have no hackerly skills, and work at minimum wage (like a large number of north americans these days) - what hope do you have of maintaining a relationship that is purely controlled by a debt collector?
You and your wife have made several key decisions that indicate you are on the same page with money and will be successful:
1. You will live on less than you make
2. With the extra money, you will pay off your debt.
3. Once done with that, you will build up savings so you won't need to borrow for emergencies.
You correctly point out that communication is the largest issue here. However, before these couples can even communicate about their financial situations, they will need to understand them first. I think that anyone that does not have at least a vague understanding of what their financial situation is not yet mature enough to be married.
Really important observation. Glad you deflated the sensational headline.
Debt is a big deal. But we're all carrying around big deals, one way or another. The important part is being open and honest with yourself, so you can be open with the person you want to share your life with. Eastman was avoiding the truth of her situation, which screwed both herself and her fiance.
You could just as easily say "How having prior children can ruin budding relationships." And sure, they can discourage them. But a relationship where the kid situation is known up front is very different from a relationship where the kid is disclosed a few weeks before the wedding.
Then again, no amount of communication is going to completely negate the blow of someone with $200k or more debt who does not plan to earn enough to pay it off. There's a lesson in that . . . something like, "Don't buy expensive things unless you're sure you want them and can pay for them."
Well, I think one of the distinctions that has to be made is investment debt vs consumer debt. OP for this thread is talking about debt for education (an investment), which typically comes with the expectation that getting that education will increase their earning capacity. The scenario you describe implies consumer debt. Someone with $200k in consumer debt is a very different animal from someone with $100k in education debt.
I mean, yeah. There's debt and then there's debt. But if you've got any chance at all of succeeding, you need to talk about this sooner rather than later.
Many private-university students receive nontrivial scholarships. And if you study a technical field at CMU you're unlikely to have trouble paying back the loans.
I graduated CMU in May. I have quite a bit of debt, but got a good job straight out of school and aim to have the debt paid off in a year by living like the graduate students I live with.
What if you find yourself essentially wedding your way into a mountain of debt? By legally binding yourself to that person, don't you become jointly responsible (and culpable) for their finances, including past debts?
No, you don't become legally responsible for any debt you didn't sign for (that's true for your parents as well as your spouse). However, in the event of a divorce, the court will divide up the debts as well as the assets and assign them to both parties. This is certainly fair for debts that were incurred during the time the couple was married. Debts incurred before the marriage would be handled like assets brought into the marriage; in general, an effort will be made by the court to restore individuals to their pre-marriage state.
That said, marriage is about two people joining their lives together into one, and that means combining your financial lives as well. That means it's our income, our cars, our debt. Disagreement about money is one of the leading causes of divorce. In separating your finances, you are prone to living more like roommates than a married couple.
If you carry $170,000 of debt without even realizing how much the total amount is, that says something about you, something that may in fact make some people less willing to marry you.
Having hundreds of thousands of dollars of debt is fine. It's a curse of the middle class, at one point or another--a mortgage if not student loans. You're supposed to realize what you're doing when you borrow that kind of money, though. Running up hundreds of thousands of dollars of debt without fully recognizing what you're doing seems irresponsible. You're mentally evading your responsibilities to others.
I can't even comprehend the mindset involved in that. How can you spend years paying for anything (even a car!) without even once trying to keep track of where you stand in terms of paying it off?
I wonder if it's due in part to an acclimation to residential rent and car leases. I consider myself very financially disciplined, and would never lose sight of the outstanding principal and interest rate of a loan, but I have no idea how much I've paid the landlords of my current rental apartment over the past few years. Like the woman in the article, I don't really fancy thinking about it.
That's past expenditure, though. It's not helpful to think about past expenditures too much, because as sunk costs they fundamentally don't matter anymore. It's not useful to cry over spilt milk. OTOH, it's positively uplifting to contemplate the state of having saved thousands of dollars, or having paid down your debts by thousands.
This is why I argue against liberal arts degrees. There are so, SO few people who will ever be able to bring the sort of value required by a degree in the liberal arts based on the skills such a degree would provide that it is completely economically irresponsible, especially now that just having a Bachelor's degree says about as much as having a High School diploma did about 30 years ago.
So one of the projects paying the rent this summer was working for a client which markets college degrees. They asked me to crunch some government data and figure out what degrees are worth on a per-major basis. While I'm mostly done and paid (yay), the project isn't live yet, or I'd show it off.
I think they'll be OK with me saying this much: the data do not agree with your conclusion, for any sensible value of "liberal arts."
Now photography, that is another story. My research methodology totally missed it as a major choice, because the obvious occupation (photographer) doesn't require a degree. Looking at the BLS source data though, egads, $170k to become a photographer is a bad call economically. The median annual salary (note: for photographers at all stages of their career) is $19k. The overwhelming majority are part time only. If you give generous assumptions as to future income growth, the NPV of being a photographer is $410k.
That compares disfavorably with every degree I actually have in the data set. (Including, most relevantly to her situation, the associate's degree you need to become an X-ray technician, which you can get for less than $5,000. Spend another $10,000 on camera lenses, bam, you're an X-ray technician doing something she loves as a hobby.)
She's in San Francisco. If she can get regular work at weddings she'll be able to pull down $2000-3000 per gig, and probably more over time. I talked to people who wanted $5-6k -- when I stopped laughing they told me that there are people who will pay it. Weddings are an absurd profit machine.
The pricing for a weddings-only photographer is largely based on the number of bookings they will do in a year and their demand. All else being equal, the $6k one is likely in more demand than the $3k one. That demand is almost entirely based on word-of-mouth referrals, which take time to build, so it ends up like any brand -- it's worth more when more known.
The deliverables are drastically different between different photographers as well. The wholesale cost difference between our upper-end album and the lower-end one is about 600%.
I don't remember the article to reference it here, but the current cost of weddings was started largely by the introduction of gift registries. It snowballed from there.
It's obviously demand-based, but when I went through this a few years ago, the least experienced people we talked to were asking in the $2k range (this is in SF). Book 30 of those a year and you're grossing $60k. You have to work weekends and there are consultations and other stuff, but it still strikes me as a lucrative job if you can pull it off.
The wedding photographers have some clever ways to sell you more stuff too. Most of them want to retain the rights to the photos that you pay them to take, so they can sell prints to your guests or license them as stock art and stuff. I actually got into a shouting match with one photographer over that -- I insisted on treating the photos as works for hire under US copyright law. One guy had "his and her iPods" that he would load up with wedding pics at the end of the reception. The cost? $1000. Yeah, no thanks.
$60k would be great if that were all income, but the majority of it isn't. After everything is accounted for (product cost, equipment depreciation, studio space, updated samples, advertising, etc), the profit amounts to 20-30% of it We spend about $1500/mo here just on studio rent and utilities.
I won't go into your second paragraph, though, because that mostly boils down to a difference of opinion.
It seems counterintuitive to simply list cost of rent and utilities when discussing photographers as if no other business suffers the same. It'd be more interesting to list expenses specific to the industry.
Yes, obvious standards costs of business, but the post above does the calculation: 2k x 30 = 60k salary. If you're arguing with someone who doesn't have the basics down, that's the place to start.
I did say "gross $60k", and I meant something more like "revenue" than "salary".
Obviously there are expenses that come out of the basic fees, but when I was doing this, the people I talked to at the lower end of the cost spectrum seemed to operate without some of the expenses that came up (ie, home studio, little/no advertising).
The point I was trying to make was, wedding photography is competitive but potentially lucrative if you can establish yourself, particularly in markets like SF.
Part of that "other stuff" would be countless hours of finishing/retouching/correcting, etc. Some photographers will spend a week P/T to work through the photos they took on one night.
I think there'd be a few people who get into wedding services expecting it to be lucrative and then find it a lot more difficult than they expect. I've mentioned on here before (check comments history) a client of mine who got married, noticed the huge prices, bought a wedding services business and then sold it within six months - more hassle than it was worth!
This is true. But it is also true that the wedding photography business is under severe pricing pressure right now, so I would not count on those prices being sustainable for a lot of photographers.
That makes sense. I got married a few years ago and was shocked at what some of vendors were asking for. With a rough economy I can see weddings being an area that gets scaled back for a lot of people.
Yeah, degrees don't mean much compared to real samples and references.
I'm saying that but my wedding photographer had just come out of college. We paid $750 for the photos and it was a pretty good deal, she had some shots taken during school, they were pretty good and that was all we needed to decide. I think we were her first customers of her new company. It was a risk but now days, every aunt and uncle comes with a digital camera.
Thanks for pointing this out! I went to Iowa State, and if you got a degree in Math, or Physics, or, gasp, CS, the degree came from the same "college" as would a degree in English, or Anthropology. And, if you took enough "geeky" courses, you could easily get a BS (instead of a BA) in English or Anthropology. At ISU, a math degree was very seriously a "liberal arts" degree. And yet, on a regular basis, engineering students would say that all colleges at ISU, except for the College of Engineering, should be abolished. It shows you how stupid they were (maybe still are..), considering one of the colleges they wanted to get rid of was Ag, and ISU is a Land Grant University! So sad.
$170k for a photography degree is asinine. I am a photographer, and the field is more like 90% business and 10% photography. If nothing else, the years of running the business have taught me that people don't necessarily want the ultra-artsy approach tendered by those liberal arts schools -- they will, most of the time, pick the standard, face-forward, simplistic pose.
I went to college and it sure wasn't for photography. Photography just happened. I have a BS in Computer Science, and I also have no debt resulting from it. Rather than pursuing a software developer job, which I expected I would be doing, I opened a photography business and have been quite comfortable. Software is now just my hobby, but it's a very useful one.
Knowledge of business and accounting will get you far further in almost any industry than a specialty degree will.
Regardless of how good her portfolio is, I think the point he was trying to make is that you don't need a degree in photography to be a good photographer. My brother-in-law does some of the best corporate photography I've seen, well respected in his field, and he got an unrelated degree.
I think his point about business knowledge is a good one. If you want to be a successful photographer, you're probably better off getting a degree in marketing, communications, or business management, and minor in photography.
Decent, though I'm personally not a fan of the faux coloring or the frequent tilting that seems to be the trend lately. But, she's in the Bay area. That's one of the most saturated markets in the US, and some of the best photographers I know are there. The competition would be very, very tough.
people don't necessarily want the ultra-artsy approach tendered by those liberal arts schools -- they will, most of the time, pick the standard, face-forward, simplistic pose.
This is a problem with most practical, art-based practices (except at the high end). The customers don't have a good critical eye and will frequently choose a photographer or artist by price, prestige, recommendation, or by merely liking one of their earlier pieces - rather than on any technical merits.
I suspect someone with no photographical experience but strong business savvy could make a good go of being a professional photographer with the right equipment and just a little training in basic technique. I'd love to watch a TV show about such an experiment - it'd be like Faking It.
(And before I'm accused of cheapening a whole industry with the last paragraph, I believe the same about my two industries - publishing and programming. There are more than a few "copy and paste" developers making good money out there. It ain't noble, but it can work.)
Seriously, though, in most schools tuition is the same regardless of the major.
I don't think GP's surprise was based on the idea that a bachelor's degree in such a major would typically be cheaper than others. I think GP was surprised that someone would be willing to take on so much debt for a degree in that major.
It's 25K-26K per year, so even if she paid nothing out of pocket and had no financial aid, she'd owe slightly over $100K when she was done. And the rest of it has compounded.
But yeah, most people don't do the math and don't have a realistic view of their career path when they enroll in their programs. I think depression would be a lot more common, if they did...
Wow, this is highway robbery. People need to realize that they don't need to pay crazy money for a degree. Unless you go to one of the top 20 school in the US. You are getting nothing better than a state school degree. And some state schools are quite good (many programs are rated higher than all these private schools charging 20+K)
The best advice is to pay the minimum you can unless you get a shot at going to harvard. And if you do, some of these school now are offering free tuition for people making less than X amount of money.
I might be biased because I have a degree from a state university but that never prevented me from getting work.
I read the article one or two hours ago and the NYT has switched both the main article picture (it used to be the small one that can be seen once scrolling down) as well as the caption below the image.
The new main picture is more relevant to the story since it has the boyfriend in. The other picture looks like any of a million stock photos. I suspect the cleavage got it relegated too (though if it were the Daily Mail or New York Post, that'd get it promoted ;-)).
No. Part of the reason for that is America's culture of debt; it's obviously not real money to the woman in the story. I wonder what her credit card statements look like.
I wonder if engineers are more susceptible to this situation, often because our occupation doesn't require us to frontload with student debt and it's easy for your salary to escalate within a couple years. In other words, it's very easy to be a programmer in your mid-20s with absolutely no debt. Dating someone whose debt situation is very different than yours seems likely.
Unless you're dating a doctor or a lawyer, I can't think of another profession that requires you to borrow anymore than for an engineering degree (i.e. a four year college education).
The article asks the question of when individuals entering a relationship should bring up debts. Being a bit more optimistic, and hopefully more relevant to the world of startups, I'd like to ask the opposite question: If you're entering a relationship, when is the right time to mention that you're rich?
Before there is a "relationship"? Not being a smart aleck: if someone knows you socially before you begin dating, they should have some general idea of where you stand in that regard. For some of the "big" issues in my own life, I generally find it doesn't work well to get hooked up with people who don't already know some things about me. But I am not a fan of online dating, so if that is the route you are going, I really can't help you.
Most marriages are economically based, explicitly or implicitly. It's in the evolution instinct of married people to have the best environment to bring up kids, which means financial stability. Having huge debt would make you less attractive since you will make the union's financial situation worse. The other side being significantly well-off often mitigates the problem, so just look for rich people to marry if one is deep in the hole.
Answer? simple. $150K/4 = $37.5K/year, an average tuition of a liberal arts collect. I went to Lake Forest College, 1hr north of Chicago, and this was their tuition 5 years ago. Did I pay the full-price? No. I got a half-off scholarship for getting a SAT score above 1,200. Simple. I only paid ~ 16K/year (room & board included) for 4 years. But there were people paying the full price. I hope they make good money to pay all that debts.
4 years went by really fast, and before you know it, you're in great debt. I don't think that people are totally irresponsible. Here in the US you were taught to at a very young age to "follow your dream" and the rest would come. For a 18 year old girl or guy, being so young and naive but having no clues about finance and the real cost of money (your life!), of course she/he would make a decision of following their dream. However, undergrad debts are understandable. If you make a wrong decision and can't get a job with a high enough salary to pay back the debt, at least it's early in your life so you can recover. But if you're 25 and want to further defer the real hard life by getting a master degree of something you want (but probably don't need to), and along the way get in tons of debt, then you're financially irresponsible.
Higher education should not be this big of a financial burden for students, but it's pretty profitable and the US education system is still the best in the world, so there's a huge premium to go study here. From my own experience, foreign students make really good and conscious choice about where to go and how to get a scholarship. A lot of my international student friends got full scholarship to top schools, but this may not be the case for every one. But they and their parents really come prepared to pay every dime for a good education that can help hem make the most out of their professional life after graduation. I was too an international student.
My point of view in life is: time is money, debt is negative money, thus you're subtracting time from you life to pay for debts. And that's the real cost of debt.
To me, this is foreign. If you love somebody, and I mean _truly love_, it doesnt matter how much money you owe, or what judgments are against you.
Those who I have been with (counting 2 now) I would have moved the world for. I only left the first one because I didn't think she even cared I was there (and her actions didnt show it).
If their marriage was a convenient way to get tax benefits and other marriage related tax burden reductions, so be it. Enter as a business arrangement, which is what he seemed to have done without understanding liabilities.
Love is a very important part of a relationship, but it's not the whole story. Many times we end up relationships with people who make our hearts flutter, but who ultimately are bad for us. Marrying someone who is so deep in the red is a really big deal. Some people are comfortable assuming a great deal of debt - I'm not, and I could never be with someone who had that much hanging over their head.
> Those who I have been with (counting 2 now) I would have moved the world for. I only left the first one because I didn't think she even cared I was there (and her actions didnt show it).
Something to think about, this might be controversial but I'm going to try to put it as well as I can because I think you'll be better off if you think about it - you said you'd have moved the world for a woman you were with, but it didn't even seem like she cared if you were there.
Those two things might be related. These days, much of the media and movies show women falling in love with men who are attentive, kind, loving, and affectionate with no strings attached, and even if she isn't good to him in the beginning he eventually wins her over. Purely dutiful and attendant sorts of men. However, this is a fairly new set of affairs - not long ago, women's expectations and judgments on a man were based on a mix of pragmatic considerations (politics, division of labor), shared values like religion and community, and the man accomplishing tangible things.
It's possible that if you expressed more external drive to change things in the outside world, and less pure devotion at all costs even when it's unreciprocated - that a woman in your life would love you more, serve you more, and actually feel happier being with you. Also, in such a state of affairs, you might be happier too.
Maybe I'm wrong! I don't know, it's just worth thinking about. I see a lot of people talking about preferences for certain things while actually choosing and being satisfied with something a little different.
I'm sure everyone has a point where they say 'enough!'. And besides that, there is a point where you have to say, "I love you and I want to say that doesn't matter, but it does, even though I don't feel like it does". Occasionally, you have to protect yourself from yourself.
It also might wind up providing new insight on their character.
Think about it another way. If I _truly love_ someone it wouldn't matter to me what the financials are like. But the person that I would truly love would not be the a person that would take on a crippling amount of debt.
On a related note, one of my projects is an effort to help ensure that more people can acquire the benefits of a college degree but without having to incur a large amount of cash debt or time debt. I'm sure I'll have more details to announce here if/when it's further along.
I've paid off almost all of my debt and she will take care of hers once she graduates. Even if we both had 100k+ in debt, it wouldn't make a huge difference to our standard of living. We'd simply be paying off debt instead of adding to our savings.