I love you, now here is all my money.
July 27, 2012 12:54 PM   Subscribe

Stupidly loaned boyfriend money too early in a relationship; are we doomed?

My boyfriend and I have been together about a year, I’m 25 (straight female) and he’s 31 (straight male). This is the first serious relationship I have been in. We moved in together after 7 months. We have a very loving and affectionate relationship and love spending time together. He tells me he loves me and makes sure I know how important I am to him on a daily basis. I just feel like we made some irrational decisions early on that are affecting our relationship.

Around 5 months into the relationship, he decided he wanted to start a small, side business and I (stupidly) offered to loan him the money, via opening three 0% interest rate credit cards (dumb, dumb, dumb) because he had no cash (red flag) and horrible credit (red flag). I should note that I am normally very smart with money and never before put any money on a credit card that I couldn’t pay off immediately. But, being deliriously in love clouded my better judgement and what’s done is done. We have only $9k remaining of this $20k debt, with both of us contributing to the payoff. His side business has been doing well, but my regular salary is still a little over 1.5 times what he makes with his regular job and side business, so I have probably contributed much more to this than him. Our everyday spending habits are pretty similar. We combined our money into a joint account (in my name only, because of his credit) a few months ago so any money he owed me is now moot. We also sold an old car of mine, which he was driving for awhile and had paid about 20% of, to get a vehicle primarily to be used for his business, but that we will also use on vacations.

The problem is, I’m starting to resent him because of the money. I know I was the one who made the decision so I don’t know that I have a right to feel so resentful but it is eating me up. I love him and I love our relationship but I feel like until we get this paid off (probably a year from now), it will just eat at me until I am angry at him all the time. Then again, if his business takes off and he starts making enough to pay it off quickly, this probably won’t be an issue.

Aside from this, I’m pretty happy with our day to day lives. Our families are very different and we have differing views on a lot of things, but nothing I feel that can’t be worked out otherwise. I did find out about 4 months ago that he was involved with some very inappropriate facebook messaging/sexting sporadically during the first six months of our relationship. I know that has stopped and and I know he has not cheated on me, but I still have some anxiety about this from time to time.

I don’t want to break up, because I love him and I know he loves me. But, how can I be happy in this relationship?
posted by sunshine37 to Human Relations (46 answers total) 8 users marked this as a favorite
It sounds a lot like his business is your (joint) business, legally, to me. That might be one way. That way it was a business investment. Get paperwork on it.
posted by small_ruminant at 12:58 PM on July 27, 2012 [27 favorites]

It sounds to me like you don't even know how much he has contributed to paying this off. That might be the first thing you need to determine.
posted by Michele in California at 12:59 PM on July 27, 2012 [3 favorites]

We have only $9k remaining of this $20k debt, with both of us contributing to the payoff.

I'm confused. Why were you helping pay off his debt?
posted by Sticherbeast at 1:00 PM on July 27, 2012 [6 favorites]

Um, yeah. You are the major--only!--investor in this business. His contribution is sweat equity; yours is financial. Is the business incorporated? If not, it should be made an LLC, with the members being the two of you. (He doesn't sound like the type to incorporate a business; that's dumb, it should be. ESPECIALLY if you have a business car!) So have that conversation.

So but also... you combined your money together in your first year of being together. (Oh my God. My heart palpitations!) So... Um, I would "uncombine" some of it going forward? It's sort of important for you to have some autonomy. You need a spreadsheet about who's contributing to what.

Your resentment, though, is your problem. Do what you have to do--write about it, journal the hell out of it, talk about it, whatever--to get it out of your system. You did something that wasn't okay with you. Well, don't let it poison everything. And learn the lesson. And most of all, don't let it get worse: if you need to talk to him about the process of repayment, DO.

A few notes:

* I'm confused. Why were you helping pay off his debt?

She was paying down the credit cards so as to not also wreck her credit as well.

* On the brighter side, it sounds like this business is going okay, maybe, and also, all this activity may improve your credit score further!
posted by RJ Reynolds at 1:05 PM on July 27, 2012 [10 favorites]

When you say 'loaned', do you mean 'gave'? From your post it sounds like you've lost track of how much you've put in vs. how much he's put in and how much he's given back in terms of his contribution to the credit card payments.

As others have said, I think you are a part owner. To which degree you and your boyfriend need to hash out between yourselves.

You made an incredibly poor decision to finance your broke, bade-credit boyfriend's business but -- miraculously -- he has made a go of it and it is an ongoing concern. You are extremely lucky in this respect. I think you need to determine whether you want to continue to be a part owner and get together with your boyfriend to work out a fair split between all the cash you've brought in, the portion he's paid back and also his sweat equity. Then formalize it. Or if you don't believe in the business long term you need to decide if you think he'll ever be able to pay you back and go through the same process to have him essentially "buy you out."

But it kind of seems like he's been surprisingly responsible here unless you have additional details. The problem seems to be with your own characterization of the loan and followup.
posted by rocketpup at 1:06 PM on July 27, 2012 [1 favorite]

I want to reframe this:

You lent your boyfriend your good credit, which he used to borrow money from your credit cards. Over the past 7 months, you have been paying off those cards (aka, you are currently and continuously loaning him money to pay off his debt.) As far as I can tell, he's not going to pay you any interest on these current and continuous loans? Are you getting a share of his profits? Do you have any stake in the business at all?

I'd be pretty upset, too, if I didn't have any legal stake in a company I was essentially funding.
posted by muddgirl at 1:07 PM on July 27, 2012 [20 favorites]

Take some time to sit down and outline how much he's contributed to paying off the debt for the business and how much you've contributed.

Going forward keep it in a record. An Excel spreadsheet is good for this.

Get him to sign a note acknowledging that he owes this money for the business and that you are NOT an investor.

Frame the discussion in this way, "I'm not comfortable not having this arrangement in writing and it bothers me. I want to be sure that you are paying me back for everything I borrowed to start the side-business. I also want you to have this totally and separately apart for you. While I'm contributing to paying down the credit card debt, I'm doing this for my own peace of mind and to reduct the ultimate interest costs. I expect you to pay me back for the entirety of the loan."

Show him what you've paid and what he's paid, and what the payment schedule looks like for him until the loan is paid back. Just because the credit cards are paid, doesn't mean that he's done paying you back.

In the future, DON'T do this again!
posted by Ruthless Bunny at 1:08 PM on July 27, 2012 [6 favorites]

Incidentaly, it's a terrible idea for him to be depositing his money into your account. Should it ever come up, he can claim that every dime he gave you was towards the debt.

Also, do not mix finances with people you are not legally bound to, through marriage or family relationships.
posted by Ruthless Bunny at 1:09 PM on July 27, 2012 [10 favorites]

"three 0% interest rate credit cards"
You keep those safe somewhere not in your boyfriend's wallet, right?
posted by travelwithcats at 1:12 PM on July 27, 2012 [11 favorites]

The only way to maintain the relationship is to let go of the attachment to the Money. Its ahrd to do though. I was in a similar situation, supporting my partner for a year or so and it just changed the dynamic in a weird way.

At the time I guess I was aware that it was not "The One" for me and that really changes the dynamic. If you can't see your self with the other person for ever then its hard to really throw your future in with theirs. Which is what you have done.

If you want to hang onto the relationship you are just gong to have to forget about the money..
posted by mary8nne at 1:14 PM on July 27, 2012

Stupidly loaned boyfriend money too early in a relationship;

It's not even what you did to start with, it's what you are continuing to do and doing right now.

The problem is, I’m starting to resent him because of the money.

You are not protecting and caring for yourself financially. He is not protecting you financially either, far from it, he is running up debts to you and then letting you pay off those debts yourself, to yourself! He's (asking you to? allowing you to?) sell your vehicles and buy a vehicle which will be "his" which I guess you can use sometimes on vacation, with no word about paying you anything for that?

I know I was the one who made the decision so I don’t know that I have a right to feel so resentful

No, you absolutely do have the right to feel resentful if he's borrowing money from you, spending the money and then letting you laregly pay yourself back. You guys are already in this situation, but you can absolutely be resentful about the way you're needing to get out of it.

We combined our money into a joint account (in my name only, because of his credit) a few months ago so any money he owed me is now moot.

No, it's not moot at all.

Why are you not protecting yourself, sunshine? You don't have to let things keep going in this way. You will not be a bad person if you put a stop to the way things are currently being done and insist that they be done properly.
posted by cairdeas at 1:19 PM on July 27, 2012 [21 favorites]

You need lawyer and/or CPA to sort out who owns what. You are in extremely perilous territory. Get a formal written agreement from your boyfriend about ownership of the business and debt.

You are the investor in his business. The profits should be yours!
posted by Hollywood Upstairs Medical College at 1:25 PM on July 27, 2012 [3 favorites]

Also, please be smart about incorporating this business and taking on formal ownership. As in, please think rationally and talk to a professional about whether that's a good idea or not based on his credit among other things.

Bad credit doesn't mean that someone is a bad person who should never get a chance and just be shunned. But you know, if the guy can't even have a bank account (why? are his wages being garnished?) I don't know if it's the best idea for you to possibly be on the hook for some insane business debt that ends up "just happening" after "one little thing just led to one little thing and it kept snowballing."

And yes, about the credit cards, it sounds like you're already very well aware of what the balance is on all of them and notice new charges. It's a really good idea to keep doing that and keep an eye on your credit reports, regularly, in general.
posted by cairdeas at 1:32 PM on July 27, 2012 [1 favorite]

I think you are getting great advice here.

The one thing that I would add would be that, despite his own financial weaknesses, if he truly cares about you, your boyfriend will want to help in doing what is necessary in making you feel more comfortable here. If he pushes back about you trying to sort out who owns what, or tries to guilt you because you are putting too much "pressure" on him or something, take that as a HUGE red flag and a sign of how he really thinks about you (someone who should be counted on to always contribute to what he wants, but not someone who deserves the same from him).
posted by sparklemotion at 1:37 PM on July 27, 2012 [19 favorites]

The reason your feelings are not going away is because you are continuing to let him borrow from you.

you lent him your credit. he ran up a 20k debt. you are now paying off more than 50% of that debt. you bought a car that is his.

So in a year when you've paid of the debt that he has put you in... he will then owe you 15k?

Will he be paying you that money back? Is there a concrete plan for that? is any of this on paper? is there a document in a CPA's files acknowledging ANY of this? How will you be filling taxes on this?

As a small business owner the situation you are describing would ruin my marriage. I can't imagine what it would have done a decade ago when I was a year into dating my wife.
posted by French Fry at 1:50 PM on July 27, 2012 [4 favorites]

We have only $9k remaining of this $20k debt, with both of us contributing to the payoff. His side business has been doing well, but my regular salary is still a little over 1.5 times what he makes with his regular job and side business, so I have probably contributed much more to this than him. Our everyday spending habits are pretty similar. We combined our money into a joint account (in my name only, because of his credit) a few months ago so any money he owed me is now moot.

Figure out the actual amount paid by both. Better to know than assume.
posted by Ironmouth at 1:51 PM on July 27, 2012 [2 favorites]

I know you said you entered into this of your own free will, but I feel like he is either taking advantage of you or is EXTREMELY ignorant and naive about finances. I would never allow someone to entangle their finances with mine like this, even a spouse or business partner. I am really concerned about your financial situation.

You need to separate your finances immediately. If he doesn't even have his own personal bank account, I'm guessing he doesn't have a separate bank account for his business, let alone insurance. That means that ALL of that money, which is mostly yours, is at risk if anything goes wrong with the business. Like if he fails to pay a bill, YOU are on the hook personally.

In whose name is the car? Who paid for it? Get that sorted out. If you paid for it, your name should be the only one on the title.

Document the money he owes you (in a writing that you both sign) and set out a clear payment schedule.

If you're worried about hurting feelings, I think you should easily be able to explain that while you love him, this money situation is making you feel anxious and you want to make sure everything is done right so you can stop worrying about it so much.

IAAL (IANYL) and I know I'm used to thinking about worst-case scenarios, and I don't want to throw a damper on your otherwise happy relationship, but imagine -- as much as you don't want it to happen -- that you two are going to break up and deal with the finances accordingly, NOW while you can both talk about it openly and cooperate. Maybe talk with someone objective, if not a lawyer, at least a knowledgeable friend or family member, who can help you look at this from a purely practical point of view without the relationship lens.
posted by chickenmagazine at 1:52 PM on July 27, 2012 [11 favorites]

We combined our money into a joint account (in my name only, because of his credit)

He needs to get his own account. Google "open bank account bad credit" for many ways to go about doing this. Bottom line, there is some bank out there that will accept his money, whether it's a checking or savings account.
posted by chickenmagazine at 1:57 PM on July 27, 2012 [2 favorites]

Hey so I don't know if this will help, but I was very surprised at how well your story has turned out so far. Most stories that begin like yours end with "and then he disappeared forever and my life is ruined."

You guys are together!
Still in love!
The business idea succeeded and is doing well, holy shit!
He's been contributing more than nothing to the debt!
It seems like he's been more responsible with his money than ever before in his life!

This is not to like... try to guilt you or something? I think it's fair to feel some resentment, that's a lot of money. But! It may also help to reflect on how this has all turned out pretty well so far. And hey, you should eventually be able to see some (monetary) returns on that initial investment you made, wow!

I hope this alternate (not better, just alternate) perspective helps ease some of your discontent. =)
posted by kavasa at 2:07 PM on July 27, 2012 [11 favorites]

You're getting a lot of advice about how to move forward financially/business-wise. But even as you go through that series of conversations and paperwork with him, don't neglect the relationship side of things.

Whenever the topic of combined finances come up between us, I tell him I'll insist on a "Don't be a dick" line in our prenup, which (despite having no legal weight) will hopefully remind us (when the time comes to separate finances), that our relationship had a foundation of warmth and affection, and the less petty we are, the less bitter we'll become.

Yes, you made a mistake, yes you're learning some hard lessons about boundaries, but make sure to take breaks from dealing with the money to remind yourselves that you love each other and want to be a team.

You don't mention how your current financial situation is, other than the debt. Have you had to compromise your lifestyle to pay off the debt?

At the very least, I agree that you should be considered the primary investor of this business, and are owed partial ownership, and therefore a share of the profits. So work out an arrangement that makes that future success something you can look forward to together.
posted by itesser at 2:12 PM on July 27, 2012

Has he told you that he intends to pay back the full $20k that he borrowed from your credit card company? If not, you didn't loan him that money - you took out a loan and gave the money to him.
posted by The World Famous at 2:38 PM on July 27, 2012 [3 favorites]

The question you need to ask yourself is: 'once this is paid off and Mr BF has paid me back every single dime including the dimes I paid into the CC debts so as to keep my own credit on the up & up, will this feeling of dread go away and will I be able to slip back into a comfortable relationship with him???' Unfortunately for the knowledgeable, well-meaning, but sometimes quick to the draw denizens of Mefi, this is one of those questions that you and only you will be able to answer. We have no idea if you'll cease to resent the fellow once this financial stuff becomes wispy and laughable memories, and of course neither do you. It's going to require a lot of thought, yes, but as for now you're in it for the long haul (or until your investment is paid back - whichever comes first).

There's really nothing you can do but tough it out until the money is safely back in your possession. Then and only then will you know how you're going to feel. My advice, and of course I like to believe it's the best advice, is to treat the guy with kindness, dignity, and massive amounts of respect until you all's paid back. It sounds like he might actually be a decent businessman (at least in this case), as you've led us to think you'll be getting all your scrilla returned. Be nice to the guy. It sounds like he's trying to do good, right?

The short of it: If the time comes where he's paid you back and you still resent him, send him on his merry way. It'll only be the fair thing to do.
posted by item at 3:11 PM on July 27, 2012 [2 favorites]

I'll approach it a different way.

You deliberately obfuscated the exact disparity, vaguely saying you made more than 1.5x what he makes with both his full time job and this "side business". That can be $2500/month to $1600/month, which is a much more significant disparity than the difference between $12000/month to $7500/month.

How so? There are going to be disparities in every relationship. The main issue with disparities as I see it is the effort and level of dedication/determination. Some guy north of 30 years old making $90000/yr is almost certainly working pretty hard, while the guy making less than $20000/yr is almost certainly not applying his full efforts.

My advice for finding your happiness is to ask yourself if he is doing his best and (if not) is that okay with you?

Is your boyfriend utilizing his earning potential to the best of his ability? (At least temporarily -- yes, a free spirit can elect to live as a pauper if that suits his temperment, but not while his loved one's are footing his bills for him.) If yes, then you can only be happy to be in this relationship. He's doing the best he can, and if that doesn't suit you, then why'd you take up with him in the first place? Let the poor fella go if his best isn't good enough for you.

If he is working below potential, then is that going to be okay with you? I don't set the bar at Serhiy Bubka levels for myself or other people, but I find it depressing to surround myself with people who are apathetic or chronic underperformers. I always drop them once they show their true tendencies. Other people may feel differently, so it is clearly a personal preference.
posted by 99percentfake at 3:40 PM on July 27, 2012 [1 favorite]

An important point is that you didn't stupidly loan him money -- he stupidly (or not so much) TOOK the money from you. That was his choice. He could have found the money another way, or not started the side project. It doesn't show a lot of love and care for you to allow you to spend your money in this way.
posted by 3491again at 4:14 PM on July 27, 2012 [3 favorites]

Thanks everyone for all the responses! Some really great advice here. A lot of you mention keeping track of exactly how much I pay vs. he pays, but I'm not sure how to do that since we have combined finances. I could certainly keep track of how much joint personal money vs. business profits we pay to the cards and make sure the business pays us back every cent of that. I actually feel a lot less resentful since we combined accounts and it's not "I paid $500 this month and he only paid $200", so I'm not sure re-separating the finances will help this situation. I think a lot of the resentment is related to 3491again's comment: if he loved me so much, why did he let me do this? Even though I of course should have known better.
posted by sunshine37 at 4:17 PM on July 27, 2012

"Hey boyfriend, I love you and I have every reason to believe this relationship is going to work out. Unfortunately, lots of otherwise good relationships don't work out because of resentment over money, and I have to be honest with you: as much as I support you, I feel like I'm the one paying back the loans, and so my income is actually subsidizing your business's success. I'm starting to feel resentful about that. Plus, it is probably giving you a false sense of how successful your business really is.

What's done is done, but here's what I want to do going forward, so I can hopefully stop feeling resentful, and so you can get a true picture of your business's cash flow situation:

First, I want to go through the records on the loans, and see how much I've paid off versus how much your business has paid off, so that we know how much your business needs to reimburse me, beyond simply paying off the rest of the loans.

Second, I want to separate our money again, at least for now. I realize it will be difficult to split up what we already have, so I propose we keep what we've merged and continue using it as-is for shared things like rent, until it is gone. Meanwhile, all new income that you, I, or your business makes will be kept separate. That way, I can feel more in control of my money again, and you can get a clear picture for what your business's assets are, rather than considering our assets as part of your business's assets.

Finally, I want to talk about the car; we sold my car to buy it, and we use it for your business and for our pleasure. Do we want to consider it a full business expense so that we can deduct it, but have the business pay for it, or do we want to consider it a full personal expense and pay for it our of our shared funds (and out of our separate accounts after that?)"

Believe me, you might as well do it now. Otherwise the resentment will continue to grow, and that doesn't bode well for your relationship...and then you'll have to deal with the exact same money issues when you split up. Do it now, while you're still in love and supporting one another and able to have this conversation without it being fraught with (additional) peril; perhaps that will increase your chances of staying in love/supporting one another for the long haul. Plus, you get to find out how well you two do when dealing with difficult financial issues!
posted by davejay at 4:19 PM on July 27, 2012 [9 favorites]

if he loved me so much, why did he let me do this?

Just because somebody loves you doesn't mean they exercise sound financial judgement. He could love you as much as it is possible for a person to love another person, and still make bad financial choices. Finances should be separated from emotional issues, and sometimes it is emotions (such as being in love and believing you'll always be together) that makes us think "well, this would be stupid to do financially with a friend or a family member, but THIS person I am in LOVE with and so I know it will all work out at the end because we'll never fight or split up or be resentful."
posted by davejay at 4:21 PM on July 27, 2012

Good advice above. I would add one additional perspective.

When I read the first part of the question, I assumed it was going to start, "I loaned by boyfriend $20K to start a business" and end "And now his business has gone belly up and we lost the entire $20K!"

Maybe I have worse friends and relatives than average, but pretty much every one one of them I know who has hit up friends and relatives for start-up money has ended up going completely belly-up within a pretty short time, and all the money lost. That pretty much mirrors the national stats on small busines start ups.

So if your boyfriend's new side business is making any money AT ALL and has any prospect AT ALL of paying some or all of the initial loan back, I would say he is doing better than average at it . . . .
posted by flug at 4:36 PM on July 27, 2012 [1 favorite]

He needs to track his business's finances anyway, including what he's paying back in debt. You aren't forcing something frivolous on him. He needs to be doing this anyway.

Yes, re-separate your finances, or at least some of them. Don't pay your collective moneys back into the Joint account. Each of you opens an individual account and then funnels an agreed-upon amount into the "joint finances" account.

Just because you didn't start off perfectly doesn't mean you can't fix it from now forward. If you start to think that way, you'll put up with all sorts of crap.

Also, everyone has the right to change their mind. Just because you felt that way before doesn't mean you don't have the right to feel differently now. You weren't signing up for "forever and ever" when you decided you wanted the green curtains, the left side of the bed, or to have all your money in a big wad in the cookie jar, which is sort of what it sounds like at the moment, only not in a physical cookie jar.

If this sort of conversation backfires on you (hey! this is bugging me! Here's what I need to keep my sanity.) then the relationship needs help anyway.
posted by small_ruminant at 5:01 PM on July 27, 2012 [2 favorites]

I guess my point is, don't worry about "ruining" the relationship. If it falls apart with a conversation, it had bigger problems than that already. Just make sure you're not judgemental and that you are taking responsibility for the stuff that you did.

For example, not "you took advantage of me!" or even "I let you take advantage of me," but "I ended up committing to more of this without anything in writing than was great for me and I need to fix it for my own peace of mind."

Your situation doesn't have to be solved tomorrow or in one conversation, and the conversation doesn't have to be a big showdown or ultimatum. If he's half the man he seems to be, he'll be okay with hearing out your concerns and helping find solutions to them. Maybe he'll even come up with something you and we hadn't thought of. At any rate, don't be afraid to stick up for yourself the way you would him or a dear friend.
posted by small_ruminant at 5:06 PM on July 27, 2012 [4 favorites]

if he loved me so much, why did he let me do this?

Because as an adult, he believes you can protect yourself and trusts you to do so? I couldn't stand to be in a relationship where someone was all "I can't let you do that, I love you too much." What is he, your father? No.

It doesn't show a lot of love and care for you to allow you to spend your money in this way.

Oh wow, the last relationship you'd ever catch me in is one where within the first year my partner started telling me how he'd "allow me" to spend my money. Ugh.

Look, you're the one here with the low risk tolerance. (He on the other hand may have a stupidly high risk tolerance, but hey, it's his life.) You need to know that about yourself and keep yourself within bounds that make you feel safe. If you try to outsource that task to someone with a high risk tolerance, that's a disaster waiting to happen on so many levels.

I still don't get why you want to keep your finances combined with someone who has a higher risk tolerance and lower income, even as you're developing resentment about contributing more. I mean, yeah, now you don't know how much more, but I wonder how long you can keep that awareness from yourself.
[Choose your own conclusion to this paragraph:]
- I love you too much to let you do this!!
- But you're an adult, so I'm sure you know what you're doing and can take care of yourself. Good luck!
posted by salvia at 5:19 PM on July 27, 2012 [1 favorite]

I think a lot of what needs to be said has been covered. I do want to stress something however, you ABSOLUTELY need to be tracking who puts in what and where the money flows to and from. I am an accountant (IANYA), and I will guarantee that if you get audited at tax time and ALL the money (yours, his, business) is in one account, the CRA or IRS will have a field day with you.

You need to find a local CA or CPA office and take your books into them. They will be able to advise you about how to set up bank accounts for the business and how to setup computer programs that tracks money going in and out. An accounting firm will also help you setup meaningful controls so that your money and investment is guarded and not at risk. It will be well worth the money to get things set up properly.

And PLEASE, tell me that you've got some kind of legal standing with this company. I don't want to speculate on motives or the character of anybody but I can't imagine any situation where I would feel comfortable loaning $20K to someone I've known for ONLY 5 months regardless of their history. I also can't imagine asking for that kind of money unless I was married or related to the person. It sounds like you guys are in love, but we see so many businesses where something goes sour and the person who loaned the large initial investment got screwed because they didn't have controls to prevent transfer of wealth or documentation to prove they were owed anything.
posted by Beacon Inbound at 5:33 PM on July 27, 2012 [9 favorites]

> Thanks everyone for all the responses! Some really great advice here. A lot of you mention keeping track of exactly how much I pay vs. he pays, but I'm not sure how to do that since we have combined finances. I could certainly keep track of how much joint personal money vs. business profits we pay to the cards and make sure the business pays us back every cent of that. I actually feel a lot less resentful since we combined accounts and it's not "I paid $500 this month and he only paid $200", so I'm not sure re-separating the finances will help this situation.

You could keep track of joint personal money vs. business profits you pay to the cards? You mean you don't already? How the hell did you all manage to do your income taxes last year?

Keeping your head in the sand is not going to keep you "less resentful" for long, it's already failing, you said so yourself. Paying off the credit cards is a mirage of an endpoint, there's no way for the two of you to agree that he's paid you back unless you actually keep track.
posted by desuetude at 5:34 PM on July 27, 2012 [2 favorites]

I know AskMe categories are up to interpretation, but I think it is notable that you listed this as a 'human relations' question and not a 'work & money' problem. While I agree that the implications to your relationship are serious and worthy of discussion, you really need to get the financial situation under control as soon as possible. Like, yesterday. That is the emergency.

I think the suggestions above to separate your finances starting now make a lot of sense; if nothing else, please open up your own account, start keeping your income there, and talk to your boyfriend about it. Tell him you want to discuss how much you will be contributing to the joint account. Talk to him about getting a person account for himself, and a business account for the business. Talk to him about how you are being paid back.

You don't even know what kind of relationship you two are really dealing until you have this conversation with your boyfriend and establish some financial security for yourself. Once things shake out after you do this work, then you can see where your relationship and your resentment are, and deal with that.
posted by juliplease at 5:57 PM on July 27, 2012 [2 favorites]

I'm unclear as to why you cannot clarify what has been contributed from you versus him. Don't you have bank statements for your joint account? It's only existed for "a few months" - it should be very easy to look back and see who deposited what.

I'm assuming the reason you are having trouble with this concept is because you are paying the credit cards off from your joint account (although there must have been a different arrangement previously, since the joint account has only existed for 'a few months' and the debts have existed for 7 months. The way I would resolve this is:
- have the spreadsheet at the ready with the numbers detailing which person has contributed what amount to the bank account each month, and which person has withdrawn what amount.
- Then ask him how much he feels he could fairly contribute for each of the CC payments that have been made so far. Obviously the amount he says has to be no more than the net amount he had in the account in any given month (deposits minus withdrawals).
- Once he tells you how much he has contributed thus far to the loan, you will know how much he has yet to pay you back ($20K minus that amount). Then you get him to make a payment plan as to how he's going to pay off the rest of the $20K. You will also know how much of the current money in the account is his versus yours. You can either separate accounts - I strongly, strongly recommend this - or you can just keep tracking the amount from here on out with a spreadsheet. But you are the one putting yourself at risk by giving another person (who is admittedly broke and has bad credit, who you are not legally bound to for any reason) access to a bank account in your name and all your savings.

The main problem with this approach is: you have nothing in writing to clarify that he owes you this amount of money, thus if he decides for whatever reason to stop paying you back, you have no recourse and you have lost the remainder of the money.

Your update makes me very concerned that you are trying to ignore the fact that he is taking advantage of you by making it less obvious to yourself that he is doing so (the unfairness of the repayment plan is hidden because of the existence of your joint account). This is unhealthy. Do not make a conscious effort to ignore the underlying issue! Once you have a payment plan in place for him to pay you back the loan you made him, and he is adhering to it, at that point you will be able to erase the resentment and feel like the arrangement is fair, not by just trying to forget the situation exists.
posted by treehorn+bunny at 6:25 PM on July 27, 2012 [4 favorites]

Lots of good advice above, but I think it's important to stress that you *can* track who deposits what and who spends what even if your finances are combined. Yes, it takes some work, but it's easy enough to do. I suspect you don't want to do this because you think knowing the exact disparity between your contributions and his will only increase your resentment. It is possible, however, he has contributed far more than you think, and this might make you feel worlds better.

Also, as for the "if he loved me, he wouldn't let me do this," well, no. Your boyfriend is an entrepreneur/dreamer who is not good with finances. He probably genuinely believed you'd be paid back in no time and he would be swimming in cash. The good news is that his business is doing well; it's just more modestly than hoped, but probably in keeping with the economy and the normal trajectory of growing a business. It sounds like you made a good investment, actually, it's just going to be a while before you see a profit. You might want to formalize your agreement so you have a share in his business, but I know nothing about such things. If your relationship is as good as you say it is, try to reframe it as "he loves me so much, he wanted me to benefit from and be a part of this business." It's a bit of a stretch because he mostly operated out of self-interest, but from his perspective, he probably thought it would be good for you, too, so no harm, no foul. Most of all, you need to talk to him about this because it could be a relationship killer if it is not addressed and you do not communicate your feelings and concerns. Best of luck!
posted by katemcd at 6:26 PM on July 27, 2012 [1 favorite]

Many things to think about & address here, but as far as the business/tax aspect of things: the friends & family I know who have side businesses simply keep track of everything spent & everything made, and take the spreadsheet & receipts to an accountant at tax time. I assumed this was legit & separate business accounts were optional, not necessary, but I guess that is not the case. Will definitely be meeting with an accountant ASAP...
posted by sunshine37 at 7:39 PM on July 27, 2012

As far as I know, that only works if you're legally married. You aren't in a position to file a joint return at this time.

Split it apart. You can put it back together again in a more deliberate way once you're legally a single financial unit. Right now you're effectively a single financial unit with none of the legal protections or rights of such.
posted by small_ruminant at 9:05 PM on July 27, 2012

We have only $9k remaining of this $20k debt with both of us contributing to the payoff. We combined our money into a joint account (in my name only, because of his credit) a few months ago We also sold an old car of mine,

so any money he owed me is now moot.

I don't understand how any money he owed you is "moot"

Just because you get a joint bank account does not mean he doesn't owe you money anymore. Who told you that?

He owes you 20K plus any interest and the cost of the car. Period.

A lot of you mention keeping track of exactly how much I pay vs. he pays, but I'm not sure how to do that since we have combined finances.

I'll break it down.

20K + Your car's sell price (say, 2K for argument's sake). Interest's currently at 0%

Minus BF's contribution to joint savings in January. Only $200? Well, now he's down to 20K. Paid another $200 in Feb? Now he's down to 19.8K. And so on.

Any money that YOU paid into your credits cards is NOT towards his debt, it's towards maintaining your good credit - it does not lessen the debt to you (because if you're paying off the debt, you're essentially paying for things that you didn't get!).

The only exception to this would be if you made an investment - not a loan - in the company (but it sounds more like a loan). Even if it's an investment, there needs to be a dollar amount. If you are fine with investing 10,000 for a 50% stake in the company, that needs to be on paper and the bf needs to pay the remaining 10,000 (+car) himself. Even if you pay off your credit card, the remaining balance of his 10,000 should go to you.

Nthing what people have said above - in terms of contributions, I don't even think you need an accountant. Print out your bank statements. Unless (god forbid) these have ALL been cash transactions, you'll be able to figure out how much he's deposited into the bank. That, and nothing else, is what you subtract from the debt he owes you.

So to summarize, you're overcomplicating it by measuring the debt in how much the credit cards have been paid off. Once he's paid you, simply subtract all the money he's paid to you from 20K (+ the car). Once he hands you the money, it's yours.
posted by Lt. Bunny Wigglesworth at 9:11 PM on July 27, 2012 [6 favorites]

I think I hinted above, but I want to make it clear...

A lot of people are saying you are a part-owner in this business. I'm not sure how businesses are classified, but I don't think you need to claim rights to the business if you don't want to.

Based on your description, it sounded very much like a personal loan, not an investment. Maybe you should make that clear to your boyfriend.

I know you don't want to break up with him, but I'll just say if you do split, it will probably be cleaner* to get the money back than figure out how to split the business

But whatever you do, get all of it in writing now. If it's an investment, get it written how much you invested and what your responsibilities and future payouts will be (if you're an investor, should you be getting a % of profits? If so, if he's giving you $200...it could be that he's really only repaid $195 and $5 is due to you as a shareholder. Or something...the business world in my mind is magical.)

If it's a loan, get it in writing how much he initially invested, how much he's paid back so far, and detail clear guidelines for repayment. when he repays, the deposit should be clearly labeled as supposed to be going towards the loan.... I was confused a bit at how you couldn't know what he'd paid until it occurred to me that he might be depositing shared money (groceries, electric bills, etc.) in the same deposit? If so, that's got to stop.

Even if he's done this in the past, subtract your bills from his deposits to retroactively separate the two.

*cleaner not meaning easier....just less complicated to figure out how it will be split....
posted by Lt. Bunny Wigglesworth at 9:26 PM on July 27, 2012

I’m starting to resent him because of the money. I know I was the one who made the decision so I don’t know that I have a right to feel so resentful but it is eating me up.

Whether you have "a right" to feel resentful or not, it's what you do feel.

You've already managed to pay down $20k of debt to $9k, and it sounds like you will eventually be able to knock it all over. So the debt is not really your problem; the resentment is your problem.

Going all hardass accountant is not going to fix the resentment, because BF will not be up to dealing with any of that, which will simply make the resentment worse. What you need to be doing now is reminding yourself, over and over and over, that the irritation of your present financial circumstances is indeed the completely predictable end result of an unsafe decision you made while high on love chemicals. You need to own that decision and accept responsibility for it. That way, you'll transform unproductive resentment against your beloved into hard-won wisdom.

Meanwhile, do take steps to untangle your finances from his. There is absolutely no reason for two people with different financial styles to run common finances even if they are completely in love.
posted by flabdablet at 9:37 PM on July 27, 2012

Yes, like Lt. Bunny, I still think he owes you the money. It's just that instead of loaning it to him via your line of credit, you've converted a lot of that into money you've Lent him with actual cash. It makes sense that you'd do that to protect that line of credit and keep the interest that either of you pay down.
posted by salvia at 7:43 AM on July 28, 2012

This loan need not destroy your relationship and you need not feel resentful about it. I would argue that not making the terms of the loan explicit and clarifying the business relationship you and he have is a much greater mistake than loaning him money in the first place.

The good news is that it's not too late to formalize and clarify your business relationship. It's likely when both of you know exactly where you stand in this business relationship that you will not feel as resentful. Right now, it's unclear what his responsibilities are regarding the loan. What's the repayment schedule? How much does he owe? If his business is profitable and he's making progress repaying you according to some set schedule, you can expect to feel less resentful. (On the other hand, as soon as he misses a payment or begins to feel like there is an imbalance in the relationship, this could cause problems, which is why it might be a very good idea for him to seek other financing and pay you off. Which presumably isn't easy, but still).

The bad news, such as it is, is that your legal and financial status regarding the business sounds like a complete mess. Yes, you need to meet with an accountant and sort out which money is where and how much he still owes you. You also need to meet with a lawyer and then come to some sort of agreement about your relationship with the business. Arguably, you're a partner in this business. And while this might be neat from a "Hey, if this takes off, I'm a part owner!" point of view, this can be a nightmare from a "Boyfriend gets sued and I'm liable for it" point of view (not to mention tax consequences). If you had loaned him money with interest and it was clear it was just a loan, and you weren't commingling your finances, there would be a pretty straightforward argument that you were merely a lender, not a partner. But that's not what happened. So, the two of you need to sort this out.

If this were my relationship, I would not want to be in actual business with my new boyfriend. That's just way to complex for me. I'd not really be keen on being his lender, either, but that's several degrees of complexity removed from being his business partner.

tl;dr--if you clarify the business aspects of your relationship it will make the human relations parts of your relationship a lot easier, as well as helping hedge against potential financial ruin.
posted by MoonOrb at 9:07 AM on July 28, 2012 [2 favorites]

We combined our money into a joint account (in my name only, because of his credit) a few months ago so any money he owed me is now moot.

Wait, what? Joint account does not equal repaid debts. How is that at all logical? He has not given you money. You've now given him more money.

So he has his spending money each month, plus 1.5x more than that by having access to your income as well, and somehow that means his debts are resolved? Wha? No. Just no.

Repaid debt means his money is given to you. Not both of you. It's really simple.
posted by kellybird at 11:20 AM on July 28, 2012 [4 favorites]

(At least get your money out of a joint account, because joint account = he can take all the money out of the account at any time. I'm sorry, but this is ~really~ not responsible to have set up with someone you've known a short time. You can't undo the loans at this point, but you sure can undo the joint account. Joint accounts are ok, maybe, after you're married.)
posted by kellybird at 11:24 AM on July 28, 2012 [3 favorites]

Agreeing with kellybird - there are some married couples that don't even get joint accounts, or use joint accounts only for household items.

I am curious at your use of "joint account", though - you say it's only in your name...so how is it a joint account? Is he able to get money from it, or is it just that he has the account number and can do "deposit only" to the account number (banks really don't care who's giving money to your account - anyone can "deposit only" if they have the account number.)

If he's able to get money from the account, how is this possible? ...does he use online banking or something (where you really only have to enter the account number...huh). did you get him a debit card?

Are you two living together? If so, the joint account should be for living expenses only. If you two are not living together, close the account.

As said above, this will only help your relationship - explain this to your BF. He might balk at first, but unless your BF's actively trying to scam you he should quickly realize this is for the best.
posted by Lt. Bunny Wigglesworth at 11:16 PM on July 28, 2012

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