Canadian man’s long-distance girlfriend offers to pay his $35K debt but Dave Ramsey says "NO!" Why it's a bad idea

Everyone loves free money, but sometimes where that money is coming from needs to be considered before accepting it.

Take Garregg, for example, a Canadian man who called in to The Ramsey Show seeking advice on a unique situation (1). Garregg asked Ramsey what seemed like a simple question: “Should I accept my girlfriend’s extremely generous offer of paying off my debt for me?” He then explained to hosts Dave Ramsey and Jade Warshaw that he’s currently $35,000 in debt.

Ramsey didn’t waste too much time considering the answer — and he didn't leave much room for Garregg to share any additional details about the situation or his relationship with his girlfriend. Instead, Ramsey offered a blunt one-word reply: “No!”

Here’s why Ramsey was so against the idea.

“You’re going to have a problem”

After promptly condemning the idea of Garregg’s girlfriend paying off his debt, Ramsey revealed why he took such a strong stance.

“Do not pay debts for people you are not married to,” Ramsey said on the show. “Do not buy houses and cars for or with people you are not married to. Crap happens, and you’re going to get sideways and you’re going to have a problem.”

Ramsey highlighted multiple reasons why Garregg shouldn’t accept the offer, including the fact that doing so would change the dynamics of the relationship and could lead to big problems if the couple were to break up.

Ramsey also mentioned that Garregg’s financial obligation to his girlfriend could build resentment or may lead him to feel that he has to justify his financial decisions.

“You're going to change the tune of the relationship,” said Ramsey. “You're going to change the whole thing if she pays off your debt. What happens when you loan people money is, it changes the relationship.”

The hosts also pointed out that it doesn’t make a lot of sense for Garregg’s girlfriend to make this offer in the first place. As Garregg explained, he and his girlfriend are in a long-distance relationship — she lives in Switzerland — and she wants him to visit her more often.

Being debt-free would presumably make it easier for Garregg to be able to visit. But as Ramsey and Warshaw mentioned, the cost of a plane ticket is a lot less than Garregg’s $35,000 debt, so it might make more sense for his girlfriend to just pay for a few plane tickets.

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Why borrowing money before marriage is risky — for anyone

Ramsey’s advice also went beyond Garregg’s specific situation.

“You don’t pay off a dating relationship’s debt,” said Ramsey. “You do that when you’re married.”

Ramsey believes unmarried couples should keep their finances separate for a few reasons:

• Dating isn’t the same level of commitment as a marriage. Ramsey believes you shouldn’t pay off someone else’s debt until you are certain you’ll be building a shared life together.
• You don’t have the legal protections of marriage. If a married couple divorces, they can go to court to make sure assets are split fairly.
• You could derail your own financial security, especially after a breakup.
• You could change the nature of the relationship, leaving the paying person resentful and the recipient feeling indebted.

It’s possible to overcome some of these risks by taking some careful steps, like creating a written contract specifying whether the money is a gift or a loan. If Garregg and his girlfriend were to take this step and specify that the money is indeed a loan, they could also create a repayment schedule that addresses interest costs and frequency of payments.

However, there’s still a decent chance this won’t eliminate the potential for added conflict in their relationship.

What to consider before lending a significant other some money

If you’re considering paying down your partner’s debt or otherwise lending them money, you may want to discuss the following before doing so:

• How you would feel if your partner spent the money on “unnecessary” things when it was intended to pay off debt
• Whether you can trust your partner not to get back into debt again
• What would happen if you broke up, and whether you would expect them to repay the money
• What you would do if your partner were unable to pay you back

In the big picture, think about how loaning this large amount of money will affect your own financial goals. If it makes you unable to meet your own retirement savings goals or risk ending up in debt, you likely shouldn’t give the money to your partner.

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How couples can discuss money without conflict

Scheduling a time to discuss financial issues can be helpful when addressing a stressful topic like money, as springing such a discussion on your partner at an unexpected time could potentially cause more stress.

When having these discussions about money, try to be open and nonjudgmental — and remember that you may need to have several money talks over time as your relationship evolves.

Having these kinds of discussions can hopefully help you and your partner with feeling more ready to merge your lives both romantically and financially. But until then, Ramsey’s advice is to keep your finances separate until you’re ready to make that commitment.

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The Ramsey Show (1)