The honeymoon phase of a relationship is an exciting time, but it’s just that: a phase. Stay together long enough and eventually you’ll have to face financial truths — some harder than others.
Here are several that could have an impact on whether you and your mate will have a financially sound future together.
1. SERIOUS CREDIT CARD DEBT
There are some reasonable causes for credit card debt — job loss, an unexpected expense in the absence of an emergency fund, or even a few careless spending choices that they’ve since learned from. What should be a more major concern is when you notice your partner using available credit like cash and not working to pay down debt.
Red-Flag Level: One
Debt happens. There’s no reason to wave the white flag on your relationship for that reason alone. Now is a good opportunity to discuss how the debt occurred, and make a plan together for wiping it out. Working together on getting one or both of you out of the red can go a long way toward making your relationship stronger.
2. SPENDY TENDENCIES
Couples commonly have different spending habits, but if you panic every time your partner comes home with a shopping bag, there’s a case to be made that you’re not on the same page financially.
Red-Flag Level: Two
Nip this one in the bud while it can still be a conversation and not a full-blown conflict. Many couples establish a “check-in” rule: When a purchase is over a certain amount, one person has to check with the other before swiping the card. This type of system still allows for freedom, but with a backstop in place.
3. 'LEFT-MY-WALLET-AT-HOME' SYNDROME
We all knew that person in college who never seemed to remember their cash, or was always just a bit short when the bill came around. When you’re still a college co-ed, that’s one thing. When you’re an actual adult in a relationship and your partner is asking friends to spot him (and not paying them back) or is calling on friends and family for larger loans, the situation is a bit less sustainable.
Red-Flag Level: Two
The conversation here is pretty simple. Is the behavior happening despite having plenty of money in the bank? Well then, it’s time for them to grow up. Is it happening because of a true need? Be open to listening, and don’t judge. Offer to help guide your partner financially, whether it’s figuring out a budget, or connecting with a financial planner. This particular behavior has great potential for reversal.
4. THE JOB HUNT IS ALWAYS ON
Losing a job can happen to anyone, but if your partner has a pattern of not being able to hold on to one for a meaningful period of time, there’s probably a conversation to be had.
Red-Flag Level: Three
Before panicking, do look at the big picture. Was it a series of bad luck in a volatile industry that led to their position being eliminated? Are they jumping ship consistently, or worse, being fired for cause? Talk to your partner about your concerns; if you can see things from their side and agree there’s not cause for concern, great. If not, be honest about your feelings so you can take appropriate next steps.
5. BANKRUPTCY OR FORECLOSURE
No getting around it, bankruptcy is a big one. Your person found themselves so deep in a financial hole there wasn't another way out. Moreover, there are long-term implications to bankruptcy or foreclosure: In certain professions a bankruptcy may hinder your efforts to get hired, and, since it remains on your credit report for up to 10 years, and a foreclosure for seven, it can also impact whether the two of you would be able to get a loan for a car or a house.
Red-Flag Level: Four
Have a frank talk about the circumstances that led up to the crisis: Was there a medical emergency, or was it pure financial irresponsibility? If there’s a good explanation, move on, and possibly consult a financial advisor for advice about navigation home or car loans. If the response is cagey, then it likely points to a problem beyond just bad luck.
6. LYING ON THE REGULAR
If, after all this openness and honesty, it comes to light that your partner actually lied about circumstances or worse, you discover credit cards or accounts that you weren’t privy to, the issue likely goes well beyond finances and into the concept of trust.
Red Flag Level: Five
Yes, this is the big one, but before calling the whole thing off, have a talk about financial infidelity. How honest do you expect your partner to be, and are you being as transparent in return? If you can establish a new normal and move on, great. But if you only encounter resistance, or worse, more un-truths, then trusting your partner for the duration of a relationship might be a tall order.