Honestly? If I were in your shoes, I’d be postponing the wedding until he: 1) sold the Camaro and liquidated all available assets and paid as much his debt as possible, 2) either secured a good-paying outside job OR a part-time job in addition to the business, 3) in conjunction with you, worked up a viable household budget that you both agree to & abide to and 4) along with that budget, had a repayment schedule for the balance of his outstanding debt to be paid off in 3 years or less. Slice TV has a great show – Til Debt Do Us Part hosted by Gail Vaz-Oxlade. Start watching it together and/or go to her website. She has free tools you can use to help map out a healthy financial plan.
Another thing BOTH of you need to do, is learn the difference between “wants” and “needs”. From one of your posts, I think you said your Fiance has $60K in car loans – which would be an entire year’s salary for him from your business. As you’re virtually 50/50 in your business, then I think it would be fair to assume your HHI is $120K. At that tax bracket, your take-home is about $7,300 per month. Your $35K car loan, on a 5 year schedule at 0% would cost about $650/month. Insurance approx $225. For argument’s sake, say a tank & a half of gas a week on a 50L tank at $1.25/L – $100 a week or $430/month. Don’t forget oil changes, windshield fluid, etc – say $20/month average on that. I’m already up to $1,325/month just for ONE car. Or 18% of your after tax income. Transportation shouldn’t be more than 15%. (Add his Camaro into the mix and you’re probably in the 30% (or more) range.) My point is: you didn’t NEED a $35K car. You WANTED it.
Likewise, you don’t NEED to buy a house. You WANT to buy a house. Again, using the $120K HHI, the upper limit of the mortgage you can comfortably carry is $360K. If you can even pre-qualify, seeing as your business is still in its infancy. But say that you do qualify: once you add in taxes, heat, water, hydro, you’ll probably be over the maximum 35% recommended budget amount for housing. Oh, wait, you’re 3% over on the one car loan already, so your debt load would be too high to qualify for much more than $350K. I sure hope you have a lot of equity for the downpayment, because with 3 existing kids, you’re going to want a 4 bedroom, and good luck house hunting in Toronto when the AVERAGE detached house price hit $600K this spring.
And there’s still the $40K consumer debt to pay off (assuming he sells the Camaro). Assuming he has average credit cards with a 19.9% interest rate, in order to pay that off in 3 years it will cost about $1525/month to do so – about 21% of your monthly HHI.
Ok, let’s see now – 18% for your car, 35% for housing, 21% for debt repayment. That leaves you $1900/month for everything else. Food, clothing, cell phone, tv, internet, vacation fund, savings, and “fun”. I doubt there will be ANY money for invitro, much less season’s tickets to the Jays. Are you really sure you want to live this way due to his bad financial choices? Ok, my numbers are probably nowhere near and probably way more dire than your real numbers. I just hope you get my point.
The other option of keeping your finances separate and making him responsible to pay off his debt. How will you feel if your man can NEVER afford to be able to do anything fun. No money to go out for dinner. No money to go to a movie. No money to go on vacation with you. Believe me when I tell you, I know of what I speak. I’m in a post-divorce relationship with a man on his second-time around. Once his child support and debt obligations are paid (lawyers bills and constant Section 7 expenses for the kids), there is VERY little left for him to live on. I love travelling; he can’t afford it. Even an every-other-year $650 week at a 3 star all-inclusive in Cuba is out of his budget. Not a chance he could ever travel anywhere we can’t drive to with his kids. However, the debt that he has, is NOT from overspending on wants. He’s ambitious at work; not lazy. And he has terrific potential. And he’s RESPONSIBLE with his money and doesn’t spend out of his budget, and has a plan to pay it off within the next year & a half. If your Fiance isn’t able to make some hard financial changes, he will NEVER pay off his debt, and this will be your life for the next 50 years. Another option is your Fiance being willing to hand over all financial control to you and live solely on what you determine his “allowance” to be (and whether or not you want to be his money “mommy”). If he doesn’t change his attitude OR allow you to have complete financial control: I foresee financial disaster for the two of you.
Before I leave you – a couple more things you may not know. If your Fiance cashed in a ton of RRSPs – did he pay all the withholding taxes? If not, he could be in more debt than you realize; and to the CRA to boot! Secondly, should your marriage fail and you are in black with your marital assets – yes, they are divided equally. However, should your marriage fail and you’re in the red: the debts are NOT divided equally. They are allocated to the primary on the account. So, if he trashes his credit, and you cosign and/or add him to your credit cards – YOU’RE the one who will be on the hook.
Please think through all the legal implications of FINANCIALLY marrying this man. As much as I love my man and see how far he’s come in getting his shit together – knowing what I know about Family Law in Ontario, I really struggle with getting married vs. continuing to live common-law as if we’re married.