Money often acts as a hidden language in our love-life, providing support or warning. Ignoring financial red flags can lead to arguments, stress, and even break-ups. In contrast, open communication and healthy financial habits can strengthen your bond and pave the way for a fulfilling future together.
Let’s explore some financial red flags you need to watch out for before taking the next step in your relationship.
Red Flag #1: Financial Secrecy
Imagine planning a special event or a romantic getaway, only to discover your partner maxed out their credit card, and didn’t tell you. Financial secrecy, especially involving debt, is a MAJOR red flagThis behavior indicates a lack of trust, transparency, and risky financial behavior.
If your partner hides or ‘loses’ financial paperwork, or avoids discussions about money, be on guard. You should also question unexplainable spending – if they are living far beyond their means, that is a red flag.
The key to fixing this red flag is open communication. Have a calm and honest conversation, without judgment or blame. You may also want to bring in a financial expert to help you both get on track. Don’t just ignore this financial red flag! In the long run, it can have serious financial consequences, like threatening your credit score, your ability to achieve your financial goals, and your overall financial stability as a couple.
Red Flag #2: Drastic Debt
Love does not actually conquer all, and it won’t overcome debt. Debt isn’t necessarily a deal-breaker in a relationship – unless you and your partner avoid addressing the issue head-on. Discuss what debt burdens you’re both facing, where it came from, and what your plans are for tackling it.
Student loan payments, for instance, may be less of a red flag than tens of thousands of dollars in credit card debt. A partner who is tackling their debt and paying it down as much as they can is one thing, but someone who’s paying the minimums (or not paying at all!) on their debt and pretending it doesn’t exist, is something different altogether!
An honest conversation can help you both get on the same page. Do you want to work on paying down your partner’s debt? Will their debt prevent you from achieving your financial goals? Do they have an effective strategy for handling it? These are all questions you should get answers to before moving forward in the relationship.
If you’re considering marriage, in some cases, it may be in both parties’ best interest to get a pre-nuptial agreement. A pre-nuptial agreement can prevent one partner from being buried in debt that they didn’t accrue, or it can prevent the assets of one partner from being put at risk.
Red Flag #3: Conflicting Spending Habits
Imagine that you save diligently, carefully allocating a portion of your paycheck into different sinking funds, while your partner buys the latest i-phone, a new playstation, and splurges on leasing a new sports car and their savings account got nothing. Uugghh!
Clashing spending styles can be a major source of friction in relationships. It usually indicates that the partners have different values and goals. The first step to dealing with this is red flag is finding the root causes. Why do you save? Why do they spend? It may be due to your experiences growing up, due to your current lifestyles, or any number of other factors, but understanding the “why” will help you understand each other.
Once you know the “whys”, make a plan to move forward. Can you budget together and trust each other to stick to the budget, or are you better off keeping your money separate? If you do keep your money separate, how will you handle large joint purchases, like a house, a vacation, or retirement? Also, look for common ground – maybe you both enjoy spending a bit more money on the best restaurants, or scuba diving lessons. Finding those experiences may help you both stay connected, even while you have conflicting spending habits.
Red Flag #4: Money as a Weapon
Money is a tool, but it is NOT a weapon. If your partner thinks it is, this is a red flag you should run far and fast from. Is your partner guilting you every time you make a purchase? Do they retain control over all the money, so that you feel powerless and excluded? Do they attempt to prevent you from rising in your career, starting a side hustle, or working at all?
A lot of people think abuse is physical, maybe even emotional – but it can be financial as well. In fact, it’s easy for abusive relationships to start financially, making the victim feel as if they can’t leave the relationship. If you see signs of financial abuse, you need to leave as soon as possible – reach out to friends, family, or local abuse networks for help if you need it.