debt Archives - Bankers Anonymous

July 23, 2024July 23, 2024

Ask an Ex-Banker: HELOCs – Friend or Foe?

Michael,

I read your columns weekly. I was surprised, taken aback, and disappointed in your opening sentences in a recent column.

You knew you had RE taxes to pay in January but apparently didn’t save (I call this self-escrow) during the year. It’s my belief that people read your columns and look to you as a knowledgeable resource and someone who would provide good guidance.

To not save in advance of a known annual obligation and to, willy-nilly, say “We have a home equity line of credit…” [aka a HELOC] is to enable most homeowners to do the same and then to incur interest cost on the balance. This creates a never ending cycle of debt since the homeowner would not likely have the excess funds to both pay off the balance due and save for the next year. Instead, homeowners are encouraged to not save in advance. What about homeowners that don’t have a HELOC?

I’m disappointed. Thoughts?

Warm regards, Larry Estes, Houston TX

Michael,

On a recent visit to my local bank the Branch Manager inquired if I had an Equity Line of Credit. I understand the concept. I can use an amount of equity in my home to pay for whatever and pay back the bank over time at some rate of interest. I recall seeing one of your recent articles in the Sunday Houston Chronicle about paying a tuition payment using an equity line of credit. What are the good, bad, and ugly benefits and issues with an equity line of credit? My banker showed me an example of $50K for 60 months at 8% interest.

Pete Thompson, The Woodlands

Hi Pete and Larry,

These are great questions & comments. I am a big fan of HELOCs, which I mentioned recently in a story about paying my real estate taxes.

Willy-Nilly Condoning Irresponsible Behavior

To address Larry’s criticism head-on:

Yes, the best scenario for paying bills is to always have sufficient savings on hand for expenses, and to not use any debt. No arguments there. That just isn’t a world in which I currently live. So, we make different choices. My choices may appear to be giving permission to readers to be willy-nilly incurring debt and living beyond their means. But that isn’t my intention. So, readers, to be clear, try to pay for everything with savings. For the rest of you, the HELOC can be a tool, however imperfect, that is better than the alternative.

First, some definitions. “Home equity” is the difference between how much a home is worth and how much debt – usually a first mortgage – is on the home. If your house appraised at $300 thousand and you owe $200 thousand in a first mortgage, we say that there is $100 thousand of home equity. When home values go up, that creates the happy situation of additional home equity which then provides the collateral against which home equity loans or home equity lines of credit may be offered. Lenders are most often comfortable making 80 percent loan-to-value real estate loans. You can probably get a competitive interest rate on a $40 thousand HELOC in this scenario, since it stays within the 80 percent of home value rule.

Home equity lines of credit are revolving, meaning you can draw down and pay back the line – just like a credit card – as often as you like for a period of time, which is normally between 5 and 15 years. This makes it extremely convenient as an emergency back-up financial tool. The best and highest use for a HELOC is to have it in place, but to never draw down on it, unless an emergency or extraordinary opportunity arises.

Another version of this, which Pete’s banker may have been pushing, is a home equity loan (aka a HEL). This is far less attractive and useful than a revolving HELOC, in my experience and opinion. It’s just a second mortgage, and you get one if you must, but it isn’t as flexible, because it does not “revolve,” allowing for infinite drawdowns and paybacks.

If the choice is between paying for something in an emergency using a credit card versus paying for something using a HELOC, the preferred answer is almost always the HELOC. The interest rate currently should be in the 8 to 9 percent range, as compared to a 12 to 29 percent range for a credit card.

At the extreme end of the spectrum if you plan to default on your debts, a credit card would be better than a HELOC, since defaulting on a credit card only wrecks your credit, whereas defaulting on a HELOC could jeopardize ownership of your home. But I’m mostly assuming in a comparison between a credit card and a HELOC that you have a reasonable plan for paying off your debts in the long run, rather than defaulting on them.

Dangers

Because this is, like a regular mortgage, debt backed by the collateral of your home, you are putting your shelter at risk if you default. Do not do this lightly. In the 2008 mortgage crisis, HELOCs and HELs wreaked havoc with people’s personal finances, when they lost their job, defaulted on their debts, and faced foreclosure. Banks and investors similarly took massive losses on the portfolios of HELOCs and HELs they had extended. Debt is always somewhat dangerous, use with caution.

The second danger is more subtle, but very relevant today. The interest rate on a HELOC is generally “floating” not “fixed.” So that can be great in years like 2005 to 2022 with super low rates, but also not as great in 2023 and 2024 when rates float up to 8 or 9%. HELOCs have climbed from roughly 4.5 percent a few years ago to about 8.5 percent today. We have a balance on our HELOC, it’s at 8.5 percent, and as a result I don’t love it as much as I did 2 years ago.

Who is this best for?

There are people who must have a HELOC, people who should never have a HELOC, and then the rest of us.

People who must have HELOC: Entrepreneurs and owners of early-stage or small businesses. A HELOC is much easier to get than a small business loan, and every small business or early-stage company will struggle to get attractive, flexible, ready-to-use loans to deal with emergencies. If you are a small business owner or prospective entrepreneur, and you own a home with equity in it, then getting a HELOC is an absolutely key tool in your toolbox.

People who should never have a HELOC: If you have the pre-existing condition of constantly living above your means and maxing out your credit card, then a HELOC is going to, over time, turn this bad habit into a dangerous situation that puts your house at risk. Don’t get one.

The rest of us: If you have untapped equity in your home, and the ability to live within your means, the best type of HELOC is one in which it’s there for emergencies but you leave it unused. Since you don’t pay any interest on the untapped part of a HELOC, it doesn’t hurt you to have one set up. It’s more financially efficient to have an unused line of credit on a HELOC than it is to have an emergency fund sitting in cash. That’s kind of my long answer to reader Larry’s criticism.

A version of this post ran in the San Antonio Express News and Houston Chronicle

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August 25, 2022June 14, 2023

Against Broad Student Loan Forgiveness

May 11, 2022 was a financial watershed for my friend Laura Davenport. A teacher at Alamo Colleges in San Antonio, on that day she received an email from the Department of Education informing her that her $155 thousand of student loan debt had been suddenly forgiven – from one day to the next – through a program called Public Service Loan Forgiveness (PSLF.) She couldn’t believe it at first.

She had been working for years to qualify for just this event. She described to me a Kafka-esque journey with her loan servicer and the Department of Education, in search of a way to take care of the loans she took out for her Master’s degree and PhD in creative writing. Between 2009 when she completed her degree and now – despite more than 10 years of payments – her loans had grown from $119,921 to $155,399.

I bring this anecdote up in part to call attention to the PSLF. If you or someone you love has student loans and has or will accrue ten years in public service work or non-profit work, they may qualify for this massive debt relief. There’s an October 2022 deadline for getting your case for loan forgiveness reviewed by the Department of Education, with relaxed standards for qualifying, compared to the past.

I also bring this up because the Biden Administration has strongly implied that it will soon forgive $10,000 of debt (or more!) in a kind of blanket amnesty program for student loan borrowers. A progressive movement has grown to a crescendo in the past few years in favor of broad-based student loan forgiveness.

I’m the kind of jerk that thinks this type of amnesty is a big mistake. I don’t really enjoy writing financial opinion pieces that I know will garner a lot of hate mail. Ah well, I’m still going to state my unpopular view. Regular student loan forgiveness currently contemplated by the Biden administration (of $10,000, or more!) is a bad idea.

The pro-student loan forgiveness movement makes the following points.

The cost of higher education has become outrageous. Tuition Inflation has run at an average of 6.2 percent for the past 20 years, well in excess of the rest of the economy, and certainly of wage increases.

State universities used to be an affordable option, but no longer. Over the past 20 years the cost of public education has nearly tripled on average. The children of middle class families cannot afford public education. Despite robust public university systems, the average student borrower in Texas has over $31,000 in debt. The average!

Unlike nearly every other type of personal debt, student loans are not dischargeable in bankruptcy, making it a harsher debt burden than credit cards, home, car, or business loans.

Student loan debt balances are bigger than credit card debt balances, roughly $1.7 trillion compared to $840 billion. About 13 percent of Americans have student loan debt, making it a widespread burden.

Wealthy countries in Europe do not make higher education unaffordable like we do. It’s typically free or very affordable there.

I agree with all of this. And yet, I still don’t think the Biden administration should offer $10,000 or more in student loan amnesty.

I oppose wide-scale debt forgiveness from two angles. First, student debt forgiveness is inequitable.

In part because of the demographic of who enrolls in higher education, and in part because of high debt balances that accrue to high-income potential degrees like medicine, law, and business, academic studies all conclude that debt forgiveness plans are regressive. That means that the higher benefits of this public good goe to higher income populations, while the lowest income populations enjoy less benefit. Understood similar to a regressive tax policy, broad debt forgiveness doesn’t pass the fairness smell test.

Second, it’s bad politics. Here’s a partial list of people who have good reason to resent broad based higher education loan forgiveness:

Americans who have not studied for a higher degree. (This is a majority of Americans, by the way. Only 48 percent of people 25 or older have completed an Associate’s, Bachelor’s or higher degree).
Americans who took out higher education loans and who have paid their debts back one way or the other. They did the hard thing, and now they will feel like suckers.
Americans who will take out higher education loans in the future but who will not receive loan forgiveness. When my girls go to college, by an accident of birth, they will most likely not get their debts forgiven.

This is a recipe for political resentment. Of course we may anecdotally know or be somebody “deserving” of debt forgiveness, but as a matter of policy it’s not a good idea.

So what kind of relief should we offer? I’m very pro debt forgiveness for people who have done public service. The military, government service, public education – these all seem like worthy ways to earn debt relief. You earned less with your degree than you could have in the private sector, but you contributed to society, and then society pays you back. A fair deal, and politically palatable.

As for Davenport, who qualified after working 10 years in public service, I’m thrilled for her. During the last administration, PSLF approvals dropped to nearly non-existent, to the point that the Government Accountability Office found that a mere 1 percent of applicants qualified by 2019.

A shift in policy in the past year however has suddenly opened up borrowers for massive relief.

A second group that should get relief are people scammed by higher education. On June 1st the Education Department wiped out $5.8 billion owed by 560 thousand student borrowers to Corinthian College, which went bankrupt after 20 years of dubious promises and under-delivery. Seems right to me, but it would have been even more satisfying if the Corinthian College leadership had been prosecuted for costing the public billions of dollars.

The Biden administration’s plan to simply forgive loan debts – not linked to service – seems unfair and politically unwise.

A version of this post ran in the San Antonio Express-News and Houston Chronicle.

Please see related posts:

Past Student Loan Forgiveness Failures

Not Holding my breath on Student Loan Forgiveness

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September 17, 2020September 17, 2020

Mortgage Forbearance in CARES Act

With national unemployment spiking this spring at 14.7 percent and climbing – and severe hardship in certain sectors like hospitality, tourism, oil and gas, and retail – the need for mortgage relief is also high, and climbing.

Anticipating this trouble, the Coronavirus Aid, Relief and Economic Security (CARES) Act passed March 27th granted some relief for mortgage borrowers.

Three unequivocal benefits for financially stressed mortgage borrowers granted by the CARES Act are:

You likely qualify for automatic mortgage forbearance with your bank, simply by asking
The forbearance agreement with your bank will not be reported to the credit bureaus, potentially protecting your credit score and credit report, and
Residential foreclosure procedures are all temporarily frozen, at least until May 18th. Evictions are not enforceable until at least July 18th.

If you must suspend or lower your monthly mortgage payments because the COVID recession created a household financial emergency, then this relief is welcome.

Nationwide mortgage relief like this is rare, because banks really, really, like to be paid on time, every month.

The passage of time is strange right now in the COVID pandemic, right? What does “on time” even mean? For example, everyone acknowledges the month of April lasted, like, 5 years.

My man Benjamin Franklin wrote in The Way To Wealth about how time passes, depending on whether you primarily lend money or borrow money.

“Creditors have better memories than debtors; creditors are a superstitious sect, great observers of set days and times,”

Franklin wrote back in 1758.

For debtors with a mortgage, however, time passes differently, says Franklin.

“If you bear your debt in mind, the time which at first seemed so long, will, as it lessens, appear extremely short: Time will seem to have added wings to his heels as well as his shoulders. ‘Those have a short Lent, who owe money to be paid at Easter.’”

Anyway, as another mortgage payment day approaches on winged heels, forbearance options seem particularly important right now. If you have to ask for a break right now, you have to ask for a break.

The CARES Act says that if you have a home mortgage with any kind of federal backing – whether from from the Federal Housing Authority, or Veteran’s Administration, US Department of Agriculture or the mortgage insurance giants Fannie Mae or Freddie Mac – then you have the right to request forbearance on your mortgage. Very few people have a mortgage not administered in some way by these federal institutions, even if you didn’t know it already. Only a small percentage of private mortgages would not qualify for automatic forbearance under the CARES Act.

Out of curiosity, I looked up my own mortgage on the specially-created Fannie Mae and Freddie Mac websites for this purpose and found that indeed mine is covered by Freddie Mac, so I would qualify for forbearance if I chose to.

Incidentally, you may wonder why – if you only deal with your own bank and never with Fannie or Freddie – your mortgage shows up as qualifying on their websites? It’s very likely because your mortgage has been packaged up by Wall Street and sold into a mortgage bond that Fannie or Freddie guarantees.

Anyway, I found I have the right to request a fairly automatic forbearance on my mortgage, and so do you.

What would that look like? Forbearance comes in different flavors. Simply by stating financial hardship, and without having to present evidence, I could cease payments for a 180-day period. Then that could be extended by another 180 days at the end of the first period, at my request.

In addition, banks are forbidden from charging extra late fees or penalties, beyond the normal interest rate. Further, your bank is obligated by CARES – and subsequent guidance from the Consumer Financial Protection Bureau – to report a loan in forbearance as “current” to the credit bureaus, rather than delinquent for non-payment, as it normally would. So, even while not paying your mortgage for 6 months or a year, your credit would be fine.

Heck, this sounds so good, it’s a wonder anybody pays on their mortgage anymore!

Not so fast. If you have some assets and income and were wondering about entering into a forbearance agreement in order to get strategic financial relief, the CARES Act is not a great deal, according to Wendy Kowalik of financial consultancy Predico Partners.

One version of forbearance you can get is a 3 or 6 month payment suspension, followed by a lump sum payment at the end of that time period to get back on track. That probably isn’t what most people expect. And it’s totally unaffordable to most.

Wells Fargo, the largest mortgage lender by volume in 2019, offers a weblink to an extensive question and answer page on mortgage forbearance under the CARES Act.

According to the Wells Fargo FAQ, maybe missed payments would be only due a long time from now, but it’s equally clear that that is only one possibility, among many.

Says Kowalik, “every conversation I’ve had – the assumption is that of course they are going to tack payments on to the end of the mortgage,” meaning 10 or 15 or 25 years from now, at the end of a mortgage term. “But if you have any liquidity, the likelihood is the bank will require you to pay the lump sum to get current on your mortgage right away.” That should worry most people considering a forbearance request.

Another version is a repayment plan that divides up the missed payments into a 3, 6, or 9 month repayment schedule. But that higher mortgage payment may then also become unaffordable. And prior to repayment, it will not be possible to draw further on lines of credit, or even to refinance the mortgage, without curing the forbearance.

Wendy_kowalik — Wendy Kowalik of Predico Partners

A key point that Kowalik worries borrowers are not considering is that the banks themselves set the terms of repayment. If your bank decides your assets or income can handle it, they will demand faster repayment. Failure to comply then could affect your credit. None of the CARES Act protections extend past a year, which means that the normal enforcement mechanisms – credit reporting, foreclosure, and eviction – are all back on the table a year from now, if not sooner.

Kowalik thinks borrowers who have a choice should be very wary of putting themselves into temporary relief that will cause even more hardship within a year. Understood that way, the CARES Act is quite bank friendly after all, in the sense that they can set the terms of repayment.

The key, says Kowalik, is this.

“Don’t go into this lightly. It looks like assistance. It looks like a simple answer to help me with my current cash flow, but that may not be the case. There is a lot of devil in the details, and I would hate for people to get surprises.”

“And about the Wells Fargo website that says ‘We want you to know we are here to help,’ Kowalik said, “Well, that just about killed me.”

A version of this post ran in the San Antonio Express-News and Houston Chronicle.

Please see related posts:

An interview with Wendy Kowalik

Book Review: The Way of Wealth by Benjamin Franklin

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June 29, 2020June 29, 2020

Video: Good Debt Bad Debt – It Just Makes Cents

Earlier this year I did a series of videos/blog posts for TV Station KLRN.

Over the next month or three I’ll post them here. This one is on a theme I’ve delved into before, namely that debt is like a drug, for better and worse.

The text of this post – if you’re a word rather than video person – is linked to here, as one of my 10 “It Just Makes Cents” blog posts.

They even did podcast versions of the audio, which is also cool.

Please see related post:

Your Mortgage – A Bad Drug?

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January 8, 2019January 8, 2019

Paul Ryan Has Left The Building

The 116^th Congress convened this [ast week, and Paul Ryan has left the building.

Hey bro: don’t let the Capitol Building doors hit you on the way out. Wow, what a disappointment. History will not treat him well.

Words vs. Actions

Ryan entered Congress as a conservative fiscal policy wonk from Wisconsin 20 years ago, rose to prominence as a budget hawk, and became Speaker of the House in 2015 on the basis of that reputation. As speaker, he threw that reputation all away.

I too am a fiscal conservative. By that I mean government should not agree to do things for which we do not have a reasonable payment plan. Yes, some government debt is sustainable in the long run, but all tax and spending policies need to meet a basic fiscal test: Can we afford it in the decades to come? We do not promise rainbow cupcakes on every plate and unicorns in every backyard unless we can afford it.

For fiscal conservatives, Paul Ryan was the Chosen One.

To compare Ryan’s reputation as he accumulated power to his accomplishments once he had power – the grand canyon between his stated goals and what he did as Speaker – is to expose him as either a colossal failure or an outright fraud. Those are really the only two options.

In 2012, Ryan told Fox News’ Sean Hannity about government debt under the Obama administration: “This is the most predictable economic crisis we have ever had in this country, it’s a debt crisis. Our debt literally gets out of control and it ends the American dream as we know it.” Fortunately, according to Ryan, we had him to save us.

He went on: “Let’s get back to a path of prosperity and debt reduction and paying the debt off. So what I’m basically saying is we are offering the country a choice of two futures…The more you kick the can, the worst [sic] it gets the more imperiled our economy becomes and the more of a debt crisis we have on our hands.”

Anyway, the joke’s on us, apparently Ryan was only kidding about the debt problem in the years leading up to his Speakership.

Ryan, as House Speaker in the era from 2016 to 2018, finally had the chance to back up his ideas with legislation.

Yes, power is shared among many people in Washington. Enacting one’s vision is hard. But Ryan completely drove the bus for three years with the House, Senate and White House unified under the same party. As a supposed budget hawk, however, he accelerated that bus 90 miles an hour into harm’s way.

Debt and Deficits

On October 29 2015, when he became Speaker, until the end of 2018, the total public debt outstanding rose from $18.1 trillion to $21.8 trillion. In other words, national debt rose by more than a trillion dollars per year under Ryan’s leadership.

But that’s really not the most important place to view the huge gulf between his stated goals and accomplishments.

Annual budget deficits are an even better measure, since Congress sets budgets annually. The budget deficit in 2015 was $439 billion, but rose to $782 billion in 2018. That rise in the budget deficit is Paul Ryan’s direct legacy. That’s the so-called budget hawk’s accomplishment. In the 5 years before Ryan became speaker, by contrast, annual deficits fell each year. That’s also his legacy. He reversed a good trend and made it terrible.

Into the ditch

But even these terrible numbers have to be taken in further context to show how bad he was. During recessions we allow for government debt to expand, as a cushion on the private sector’s woes. During boom times we look to pare back debt. The massive deficits and ballooning federal debt under Ryan tenure are particularly egregious because it happened under boom times, with historic low unemployment, fast growth, low inflation, and rising asset prices. Even under ideal conditions, Ryan recklessly drove our fiscal bus into the ditch.

But the worst of all was the 2017 Tax Cuts and Jobs Act, in which Ryan locked in higher budget deficits for years to come, with a deficit increases estimated between $1 and $1.5 trillion.

Paul Ryan’s failure and fraud is of a particularly enraging type. By all accounts and unlike many of his colleagues in Congress, Ryan does know how budgets work. But in order to pass the 2017 Tax Cuts and Jobs Act he engaged in a series of budgeting tricks: Tax cuts that end abruptly after a certain number of years to “make the math work.”

Blame Trump? No.

And why am I not blaming Trump, for example, under whose leadership over the past two years these debt and deficit numbers also increased? Three reasons. First, Trump never claimed to be a budgets guy. Second, Congress, not the President, controls tax and spending policy. Third, Trump is doing largely what he said he’d do.

Trump throughout his campaign advocated protectionist industrial trade policies for the steel and auto industries, trade wars, tariffs, picking winners and losers through economic development deals, and not worrying about over-indebtedness because you can always either renege on your debts or just inflate away the problem. Each of Trump’s ideas is uniquely terrible, and taken together are potentially catastrophic. But at least the multiply bankrupt casino-owner has stayed consistent to his promises. He’s doing what he said he’d do. In his own inimitable way Trump is straightforward on economic policy.

But Paul Ryan – this guy has some nerve. He spent his career railing against the government’s fiscal irresponsibility. He became Speaker of the House of a supposedly irresponsible tax-cuts-and-spending Congress and said “hold my beer.” Drunken sailors on shore leave for just 24 hours have shown more fiscal restraint than Paul Ryan with the 2017 Tax Cut and Jobs Act.

It’s almost as if Ryan didn’t really mean any of the things he’d spent 20 years talking about. I’m shaving his head and ringing the shame bell loudly as Paul Ryan walks away from the capital.

A version of this post ran in the San Antonio Express News and Houston Chronicle.

Please see related posts:

The Principled Republican Opposition to Trump?

Where Are The Fiscal Conservatives On War Costs?

Paul Ryan’s Tax Reform

DBCFT – An Untested Idea

Trump – Sovereign Debt Genius

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October 31, 2017

12 Questions To Ask Your Partner About Money

Editor’s note: I really like the 36 Questions thing I read about in the NY Times a few years back, this idea that you could pose these probing questions to your mate or prospective mate in order to deepen the relationship. Riffing on that idea, I came up with a series of Money and Relationships questions that might play a similar role in your relationship, albeit for shared finances. Can you help me make these better?

I need your help with this post. I haven’t really previously asked for help in developing my finance ideas, but in this case crowd-sourcing ideas may be the best approach. In exchange for your help (you have all already agreed to help, right?) I’ll offer a fun(ish) activity you can do with your significant other. Deal?

As a lead-in to the fun activity and request for help, I should mention that I’ve been informally polling friends in long-term relationships about money. Specifically, what kinds of arrangements do they have for managing their debts, creating savings plans, and all the other stuff involved in “managing the finances” for a household?

My first thought after asking a few friends how they manage things: Y’all are strange.

I mean, I have the experience of my own marriage, and how we do it. I had no idea that perfectly normal (seeming) couples have entirely different arrangements, and they do ok.

My second thought is that the problem of money and relationships is probably universal. While money is not necessarily the root of all evil, it is the root of tremendous problems in relationships.

A SunTrust bank study found that 35 percent of couples experiencing problems in the relationship cited finances as their number one concern. Only 25 percent of couples cited “annoying habits of the partner.” I mentioned that one to my wife while cracking my knuckles and she just looked at me in shock. That statistic must have surprised her.

A research study published in 2012 found a strong link between couples that argued about money before they were married, and the probability of later getting divorced. That study by professor Sonya Britt at Kansas State University found that money arguments predicted future divorce more than arguments about other topics like children, sex, or in-laws.

My third thought, and this is where you come in to help in exchange for my fun activity, is that dialogue and communication is probably a main antidote to money-stress in relationships. Speaking not as a couples therapist, but rather as one is who pretending to play that role today, it seems that if we could talk to each other more and more clearly about money, we might improve both our finances and our relationships. So that’s the premise for this activity, and the reason for asking you to help.

What if you set aside 30 minutes with your partner and committed to asking each other the following 12 questions? And then, what if you really listened to the answers?

What life lessons about money did you learn from your parents that make financial planning today difficult?
How would you feel if you knew you would only ever earn on average only one-quarter of what your partner earns, per year? Would that alter your personal identity, or your relationship?
If you won the lottery, such that you never had to work again to cover your lifestyle costs, would you quit your current job? (Entirely theoretical question because mandatory PSA: Never buy a lottery ticket.)
What secret belief do you have about money that you would be ashamed to share, except with your partner?
What would “being wealthy” look like for you and your partner? Be specific. What would it mean that you could do?
From a financial perspective, what worries you most about your partner?
If your adult children struggled financially to make ends meet, but were otherwise healthy and able-bodied, how much would you feel obligated to support them financially? Do you get or expect any financial help from your parents?
Does the idea of dying with unpaid debts bother you?
Do you believe you will be wealthy someday, but aren’t sure how to make it happen?
Imagine your partner proposes an investment opportunity that has a 10 percent chance of going to zero, but a 90 percent chance of doubling in value in a year, do you approve? What if this is a small portion of your investible assets? What if it is half your investible assets?
How would you respond if your partner suddenly told you about $25,000 of debt you didn’t know about before, and that they had hidden from you? What circumstances would justify you hiding the existence of debts from your partner?
Would you feel comfortable with your partner having a separate spending account and spending power that you never have access to and cannot monitor? Would you trust yourself to have a spending account that your partner never saw?

In addition to trying this experiment, could you help me make this better? These questions came from my own head, but I bet there are another 10 even better questions we should be asking our partners. Can you send me a few of your best ideas? What question do you wish you’d asked your partner before you got married? What question do you wish your partner would ask you, even now, about money? What money problems have plagued your relationship? Help me make this a more useful tool, and I promise to share the results. Anonymously, of course.

A version of this post ran in the San Antonio Express News and Houston Chronicle.