Reasonableness

Accountants are used to the concept of reasonableness. It’s a concept that’s applied a lot in auditing and reporting. Often it’s what you do before sending a report out to someone: check it for reasonableness, making sure there isn’t something that looks glaringly out of place, too large, or too small.

It is interesting to me that W spent the better part of his career as an auditor, and yet somehow in his own personal financial matters he doesn’t seem to use a standard of reasonableness in any way. When I met him he was several thousand dollars in debt on his credit cards, making minimum payments and continuing to spend as though he had money. I wouldn’t marry him until the credit cards were completely paid off, and he promised that we would not live beyond our means but charge only what could be paid off monthly. A couple of times in all our years together I agreed to charge things and pay over time, once when it was some expenses related to the adoption. I don’t remember what the other was for but I’m pretty sure there was a second time, perhaps when we bought furniture for our first real house after moving from the mobile home. Anyway, in more than 20 years together we paid very little interest to any credit card companies. I just don’t spend my money that way.

Apparently when W moved out (at my insistence as he likes to point out) he decided that he was completely free to do all the things I’d prevented him from doing up until then. He was always wanting to get involved in the latest get rich quick scheme, always looking for the easy money that he knew was just waiting for him if only he could invest in this, that or the other thing. I, on the other hand, am old school, a child of parents raised in the Depression who taught me that you don’t go into debt, and you don’t invest in risky things. You may get a lower rate of return, but money in CDs in FDIC insured banks will still be there when you need it. While we were together the only money W could use for his risky “investments” was the monthly income he received from the trust his mother set up for him before she died. (Yes, his mother knew him well. I believe she left him a monthly stipend rather than a lump sum to prevent him squandering it all at once.) Once we were no longer together W was free to “invest” to his heart’s content, and he did in one internet enterprise after another. He was involved in several “businesses” and was sure he was going to make money on them, except he had to pay for expensive start up costs. He could have never done it with me around, but with his freedom he was able to charge what he needed to on his credit cards convinced he would soon be making all the money he would need to pay back what he had borrowed. Oh yes, he’d show me just how wrong I’d been all those years that I held him back.

However, the longer things went on the more obvious it became even to W that he was making no money on these enterprises. Well, actually he made a grand total of $35. Let’s see. $35 on a $70,000 investment, a 0.05% return on the investment. Hmm, not sounding so good, is it? So now, embarrassed, broken, and broke, he confesses it all to me. He was anxious for me to know, though, that he has shut down all his businesses, and there will be no more money going towards them. To what purpose did he make this confession? Well, it all came out during a argument discussion we were having over divorce settlement issues. It all came out because he was pushing on me to get the refinancing completed prior to the divorce being finalized. I was pushing back that I was having a difficult time getting refinancing in my name alone as long as the divorce wasn’t finalized.

One of the sticking points also to the divorce settlement is child support – he doesn’t think he ought to pay it because it was my choice to divorce not his so I should have to be solely responsible for N’s support. I don’t get his logic, and I know he can’t legally bow out of child support. However, he is choosing to make it a sticking point.

So now that I’ve had time to digest the information and get over the initial brain freeze that occurred just by the mere mention of the amount of the debt, I’m set to return to the negotiating table. My proposal will be that I will get a loan from my parents as they had offered so we don’t have to wait for the finalization of the divorce, and instead of paying him his full share of the equity in the house that I’ll pay him his share less the present value of the child support he will owe until N turns 18. That way he won’t get enough to completely clear his debt, but he can either negotiate a lower settlement with the credit card companies or at the very least pay them down to a level where he will have a better shot at paying them off eventually, and I will not have to compete with creditors and “investment opportunities” for child support for N as I will have gotten it up front and will leave him alone about it. The alternative if he insists on his full share of the equity is that he will have to wait for the divorce to be finalized for me to pay him his share, and I will pursue child support through the court and have it garnished out of his pension checks (something I know he doesn’t want me to do).

The silver lining to all of this is (a) he and I always kept separate credit cards in our individual names only so I am not a party to either of the cards on which he has balances, and (b) he filed a quit claim deed this week giving me sole ownership to the house as even he didn’t want to see it compromised by his debts.