So I'm getting married this summer, and along with combining every other part of our lives, so goes the finances too! Actually, we're not sure what we want to do with that part yet, as she has a hefty student loan to work on. It's a little north of $65k or so, and the issue is that she works for her family business, which is having a tough time keeping everything together in this economy.

She gets paid by her mom, who runs the business, and she is currently classified as an independent contractor, I believe. Which means she has to pay self employment taxes too! (yay ). She is paid as much as the business can afford, but it's not a consistent paycheck. Some months may be more, some less, but the fixed expenses are usually running about neck and neck with her income:

1. ~$600/mo on student loans
2. $250/mo on car loan (only 15 months left on that one!)
3. $200/mo for health ins.
4. $65/mo for car ins.

That totals up to ~$13.4k per year in expenses, on about $18-20k/year of pre-tax income (no employer withholding because of the self-employment). I haven't included the federal, state, and local income tax up there, which basically eats up the rest of the money and then some. We already applied and got IBR for the student loans, but the federal portion was a small portion of the total loan, so that only lowered the payment from $650 to $600.

I'm trying to figure out what we can do to allow for some savings to happen here, or at least a way for her to manage her money so that she can save up for some things she wants.

Right now, I make about $58k/year doing computer programming work. I cover the mortgage (just moved in, $140k mortgage, 30y @ 4.0%), the utilities, and my expenses (I have no student loans, my car is paid off, and I don't have much in the way of monthly bills outside of cell phone, car and health ins.). I don't mind supporting her, but we both want to get rid of the Sallie Mae demon on her back!

What's the breakdown of the loans? Are there two big ones, many small? If there are any small loans you guys can try paying them off as quickly as possible which would lower that total monthly payment.

Can she get a different job?

It seems like you guys just need to make a budget and figure out how much you can afford to allot for debt repayment.

She needs to make more money. 18K to 20K is pretty pathetic for someone with a college degree. Im sure the family will understand if she leaves for a better oppurtunity.

As for savings... there is only so much juice you can squeeze out of a lemon.

No chance of a job change. She and her mom are the two that run the place, and the business is her parents primary income right now. Her degree is in what she does, and the income potential for isn't that great right now.

Is there anyway you can downsize to one car?

Once you are married can you reduce the health insurance cost by putting her on yours at work?

I think things are going to be tight for a while. What is the nature of the family business? Is there any hope of a recovery any time soon? Any chance the business can be run better to squeeze out more cash by cutting expenses?

Ah, it's good to be back at a real keyboard...

We both require a car throughout the day for work, so I don't think we can drop one of them

That's the plan right now. As it is, I pay ~$120/mo, she pays ~$210/mo, and when we switch to my work plan this summer, it will be at least $320/mo. The savings will be fairly minimal, but the coverage is much better than what we have now ($1500-3500 deductible becomes $800 deductible), and the work plan will be pre-tax dollars.

They run a horse barn, doing boarding, leasing, riding lessons, etc. Hopefully the clientele will pick up a bit again once people start going back to work and get raises again. I'm sure there's room for improvement in the business, but it's hard to manage that when they are both working 60 hour weeks just keeping things running

My ideal improvement for my fiancee's situation would be to have some of her paycheck go directly from the barn to cover her student loan payments. It would be nice if she could just get some more of her expenses covered without actually being income, for tax purposes.

If her work requires her to have a car, then why aren't they paying for it?

I apologize if this comes off as rude, but it really sounds like her mother is taking advantage of her.



Hypothetically speaking, if she did quit, could her mother find someone else to replace her at the same salary? If the answer is "no," then your fiance is basically giving charity to your mother. She is deliberately working below her income potential.

Put it this way: If it were anyone other than her mother, would she put up with such a low income for so much work? It sounds like the answer is a clear "no."



How does a degree in "running a barn" cost $65k? Or does she do the books for the business? The website? Typesetting/copyrighting? Marketing? Can you help us out with a little more detail?



I agree, but I don't think taxes are necessarily the problem. Someone with an income that low doesn't pay very much income tax anyway. The problem is her income is too low.

There's no easy answer here. She will never prosper on $18k/year. She could make more as a waitress in a restaurant. She's crippling herself out of a sense of duty to her mother.

same reason BK doesn't pay for their drive through workers to have a car, I guess. How else will she get to work?

I know it's not a good situation finance-wise, but it's what her family situation is right now (her dad was laid off a couple months ago)

Right, I doubt someone would take her job for the pay she receives, and I doubt her mom could afford to hire anyone different.

Mostly a poor choice of college (private school!). She says she wishes she didn't go through college for her degree, because of the loans and because she had learned so much of what they taught in the program from just growing up at the barn. Pesky hindsight!

Taxes are one part of the problem, with the self employment tax and income tax, she can barely cover the estimated payments (which are now about $900/quarter). I think not having withholding hurts her, since she has so little money to put towards savings after the student loans, etc.

Yeah, I know she's not going to get rich or barely break even, if the business doesn't start propsering again soon.

Hang on, you said she "requires a car throughout the day for work." I took that to mean she needs it for deliveries, or to attend off-site client meetings, or some other such reason. If she's only using to get to/from work, then she doesn't need it "throughout the day."

If your hours sync up, could you carpool? What's the public transit situation like in your area?



OK, so let's call it what it is. Her parents are in a financial mess and they're dragging her down with them. If she's unwilling to sever the financial anchor, then we must consider the parents' situation in the overall picture. We must expand the discussion to examine the problems/solutions pertaining to the family business. You must accept that your finances are intimately tied to their finances.

As her fiance, you must decide if you're OK marrying into such a dysfunctional situation. If you force her into an ultimatum and make her separate from her parents financially unwillingly, she'll likely always hold it against you (particularly if it means financial ruin for her parents).

Of course, her parents' problems are not your problems. They shouldn't even be her problems. But some people have a very misguided sense of honour, and do not understand the importance of appropriate boundaries, and this is the situation you're being drawn into. I feel for you. "Hoping the clientele will pick up a bit again once people start going back to work and get raises again" is not a solid business plan, and you need to consider that her parents may be merely postponing the inevitable, and consequently delaying you and your fiance from starting your own lives together. How can you save up for a home on such low incomes? How can you afford to have children? Save for retirement? Her parents' hubris is handicapping your own future.

Her job has several periods of work throughout the day with extended breaks in between, and our hours are very different (7-4 for me, 8am, 12pm, 3:00/4:30-8pm for her). Public transportation is basically non-existent in our area.



Their situation is complicated right now, but due to family and estate related changes that may be happening over the next few years, they are sticking with it until the end. When that time comes, they are sitting on some prime real estate to sell if it comes to that.

I already saved up for a home, where we move in at the end of last fall, and I am comfortably making the mortgage payments and utilities, etc. I am concerned about affording kids in the future, and I would like to put more away into my 401k, but right now I just want to find any minor, non-job-changing ways for her to be more comfortable with her financial obligations.

Income really is the issue, not taxes (or much else for that matter, although her student loans are pretty high for her income). In situations where employees are paid as independent contractors, they are generally paid appropriately more because the business doesn't have to worry about paying the tax matches, etc. She is simply getting paid way too little.

One suggestion. Since the father is not working as of recently, can he help out with the business. If he took on some of her work perhaps she could get a part time job to increase her income. This could be a temporary solution.

He is helping out at the barn now, but there's only so much he can do by himself. Hopefully this will be a temporary situation! Part time job could work, but there's not many contiguous hours for her to work a second job.

Look dude... the reality is the reality. The barn business isnt sustainable in the long run. If the parents wish to go down with the ship, so be it. Your fiance is destroying her future every moment she continues with this.

If you absolutley, positively, cant even consider not doing it, decide the situation cant be changed, then its become YOUR responsibility to earn more. $58K is respectable, but you are the only one with the oppurtunity to earn more.

Look for sidework, part time jobs, changing jobs for more $$, etc... At least until you can pay off some of the recurring expenses to create better cashflow. If you could even do it for 6 months, pay off the car loan, and then use that money to put toward the student loan maybe you could have a chance. Its still going to mean you working your ass off because your fiance's parents are being selfish. Maybe your woman is worth it, but its going to be rough until the family gets its act together.

I can tell by experience that I was in the opposite boat when my wife and I decided to get married. My parents business just went belly up and they were flat broke and borrowing money from me often(along with my siblings. It was like money roullette, going from one sibling to the next to see who could afford it). When we got married, priorities changed. I had to start telling them NO. I forced them to make a budget and had difficult conversations. It didnt totally work, but they are much more financially independent now than before.

Loyalty is a strange thing. It can make you do irrational stuff. Talk it through with the fiance. Talk it through with yourself. Know what you are getting yourself into before saying "I do".

A few ideas

-Cars - does your climate allow either of you to commute by motorcycle rather than by car? Could be a lot less expensive. Or, could either/both of you sell your current car(s) and buy (a) used car(s) - you'd both still have transport but could eliminate (or at least cut significantly) the monthly car payment(s).

-Pay structure - you might want/need to talk to an accountant, but there could be some benefits to your fiancee becoming an employee OR a partial owner of the business. Or set up a business entity for herself. Any of these structures could allow a business to pay for some work-related expenses (transport, healthcare) with pre-tax dollars. It might require a fair amount of paperwork, and in some cases some of those benefits might still count as taxable non-cash income for your fiancee (I think less likely if she's an owner or has her own business, but I am *not* an accountant so not completely sure). The student loans, since you could make a case for them being job-related, it might be possible for some repayment there to also be a 'benefit' paid by the business - anyone know more about this? I know large corporations have programs to pay for employee education, but not sure if you can set up such a thing after the education has already happened. Again, talking to an accountant may be your best bet.

-There are some legit jobs (health bill coding, for example) that can be done online and so are very flexible time-wise.

-Way outside the box, I know in certain regions classified as under-served you can work in your field and eventually get student loans forgiven (teachers & health care are the usual examples, but I know social work also can count) - if you live in an under-served area, does your fiancee have any experience with therapy horse activities?? Not sure if it would even count, but if it could it might be worth looking into. Although most areas that could support a horse-boarding operation probably aren't 'under-served'...

-Mildly extreme idea - if paying off SLs and saving more is your #1 goal, how much space is there at the fiancee's parents' home or barn? Depending on rent rates vs. home values in your area, you might free up cash flow by renting out your home and moving in with the folks. Could even make sense (depending on local values, zoning rules, etc) to create an apt for yourselves attached to the barn. Or if you can create a second unit at your house, same idea. Or even just rent out any extra rooms that you may have.

That's the most interesting idea to me right now. We both have some free time, and it would be great if we could use some of that time to make some extra cash.