For those who don’t live nearby nor keep up with me on a regular basis (anymore), the Maggi Republic is a pet name or inside joke with Somara regarding our finances. I call it the third as a nod to France being on its fifth and some historians argue that the United States is on its third, maybe fourth unofficially, due to the seismic political shifts through certain presidents.
What were the first and second? I would consider the first my time as a single person after I finally got out on my own and/or graduated from college. The ‘rents couldn’t claim me as a dependent anymore so the ‘colonial’ period ended. As for the second, it began while the ink dried on our marriage paperwork. However, Somara and I continued to have separate finances. Some thought we were crazy. I strongly disagreed for two reasons: our ages (we were in our mid-thirties which would make us two independent households unlike those 10-plus years younger) and it worked adequately with my maternal grandparents, who married even later in their lives. Having witnessed the money fights between other couples, including my parents, it seemed the wiser route. Thus, the second republic resembled a less brutal Austro-Hungarian empire or maybe what Quebec wants. As long as Somara could pay her share of the bills, it didn’t matter.
Sadly, this ‘grown-up’ arrangement unraveled due to Somara attending culinary school (over 51 percent paid off now), the internship in Phoenix’s costs (this one was my fault) and a lack of transparency on each others’ debts. Somara blamed it on her lower income at HEB; she made more before earning her degree. I felt it was caused by a culmination of numerous things coming to a head. Jose’s recent near-miss with a woman named Natalie only exacerbated my growing concerns over the letters Sallie Mae was sending and Somara’s grumpiness whenever I asked to see the Vacation Fund’s balance.
In short, we had several arguments over that Spring and a very uncomfortable Fourth of July weekend of not talking to each other. I don’t recommend the latter. Divorce wasn’t an option since it wouldn’t solve the larger money issue; it’s also a major cause with couples. Besides, I enjoyed (still do) Somara’s company too much to abandon her without pitching several possible remedies. There was a problem though. I remained rather pissed at Somara regarding the dishonesty I perceived with her student loans and wanted more time to calculate solutions/rebuttals in case she balked or countered. Initially I asked Somara to pack up some things and go live with her parents for a couple days so I could mull over the situation. She got pretty upset (obviously), offered to just move out permanently. Now I had to propose Plan A as is.
Contrary to Grandpa’s advice (and his general mistrust of women he shared the night I graduated from Marquette), I gave Somara all my numbers: the mortgage and two credit cards was all I had. She had a rough idea on how much I made at Apple and Kenny’s. In exchange I needed to see everything, especially the terms and conditions with Sallie Mae which just about gave me a stroke. Plan A went up in smoke along with my hopes of getting a new car before the year ended.
Now I had to roll the dice to get acceptance on Plan B which wasn’t too different on A, it mainly involved refinancing. Somara resisted somewhat because she was always able to pay her own way until then. I understood but explained the new rules on all the money becoming ours, not his and hers; the same went for debts. If I was willing to take on co-ownership of her enormous student loans (I felt I already did due to marriage), I needed to see all transactions going through her accounts so I could allocate everything accordingly. This entailed a trip to her credit union to transform the accounts to joint ones. It would’ve been uneventful if it weren’t for a psycho threatening to get his gun over UFCU putting a lien on his truck.
Next came a series of calls to Sallie Mae to add me officially and renegotiate. One great lesson I learned from all those “Sloan Sessions” on Marketplace is to never hide or avoid your creditors. Call them, see if you can make new arrangements. Most are willing to get something versus nothing and as I told Somara, they’re not interested in your failure. Well, it used to be true more often until the GOP and DINOs found a way to turn the screws for their corporate masters. Sallie Mae was cool, as I anticipated. They agreed to lower the rate dramatically by refinancing the biggest loan over 20 years instead of 10. I only wish they would’ve warned me about having to deal with their shittycrappynogood call center in Bangalore, e-mail was a continuous bust. My cats understood how to allocate the extra money better than these people and without a lecture.
All debts were now organized and prioritized: smallest to largest, all energy goes toward the smallest, then to the next smallest, creating a snowball effect. Many give the credit to Dave Ramsay for this strategy but they’re full of crap, my parents pitched it to me when I was younger. Killing off my smallest credit card first received a surprising affirmative vote from Somara. I figured she would disagree and press with her smallest student loan to demonstrate I was serious about this endeavor becoming a team effort. I would be skeptical too. Meanwhile, I had Somara added to my Chase-MGM credit card as an act of faith and when the opportunity presented itself, the house was refinanced to have her on the mortgage. Another thing I proved after several months was that her HEB income was enough to pay her share of household bills without fudging. I continued to split things 60/40 for at least another year though to give her more maneuvering room.
The initial Plan B was proving itself effectively enough to allow us to take a Vegas trip around Thanksgiving. Everyone knows how well that went.
Five years will have passed by this weekend, kicking off Fiscal Year ’12 for the Maggi Republic. How has it worked out? I would say even better than I had anticipated. I had my fears and doubts when I crunched the early numbers but thanks to good planning, occasional windfalls to offset the disasters (my car especially) and persistence…we remain on track:
- Three out of four student loans are paid in full…years ahead of schedule.
- We will have our first time share deed paid off five years early. Number two kicks in around August. Forecasts have it eliminated in one year.
- We bought a new car in 2010 and it wasn’t a fiscal crisis: we had a good down payment ready and stellar credit. We’re even two payments ahead on it.
- We haven’t paid credit-card interest on a rotating balance in a long time.
- When Somara needed her operation in 2008, it only delayed our vacation by a few months. This Spring’s was negligible.
- The average US household is about eight grand or more in the hole for short-term debts. We have been under half this amount for years. Long-term looks rather solid too.
- Most importantly, Somara thanks me every Summer for becoming ‘treasurer.’ Matters worked out better than she hoped as well.
Tonight we shall celebrate with a nice steak dinner to toast our progress and discuss the budget for the next year and quarter. I will get my new car eventually. Based upon the buzz I’ve found on the Internet, I’m hoping it will be the rumored hybrid version of our Honda Fit.