Money can affect relationships in a big way. It can be a major source of tension when couples don’t see eye-to-eye on spending, saving and budgeting. That’s why finding a partner who shares similar goals and values is the key to building a long-lasting, happy and secure future.
5 major financial red flags
With that said, it’s easy to overlook even the most obvious warning signs that a potential partner may be financially irresponsible when you’re falling head over heels.
Avoiding the money talk
Communication is crucial, especially when it comes to finances, and someone who runs away from the money talk may be hiding something. Although he or she may feel embarrassed about debt, minimal savings or poor financial literacy, it’s important to get the dialogue going so that you can figure out where you share similar fiscal views and where you clash.
Start by offering information about yourself before asking questions and make sure you discuss things like your family’s attitude toward money, how you value spending, your investment strategies and what you see your life looking like in five and ten years. Determining whether you share values or if you are on opposite sides of the spectrum is key in understanding how to work toward aligning your financial views. This is also a good time to create a budget that you can hold each other accountable to.
An extensive collection of credit cards
Anyone with a large collection of credit cards may have a shopping addiction and could be drowning in debt. When used strategically, credit cards can help build credit and offer rewards. In the wrong hands, however, swiping plastic impulsively can be devastating and spiral out of control.
If you notice that your honey has endless credit cards and store cards in his or her wallet, it’s important to address the issue and determine if there is a spending problem at hand. Advise that your partner cut up their cards and pay with cash only moving forward. You should also consider setting spending rules in which you and your mate agree to discuss any purchase over a certain value, say $100. This helps deter impulse buys and helps you both make smarter purchasing decisions together.
Different attitude towards saving and spending
If the person you’re dating has a completely different attitude towards spending, saving and budgeting, you may not be financially compatible. Those who are on totally opposite sides of the spectrum when it comes to finances will find themselves in arguments often.
However, there are ways to work through this issue. For instance, if you save every penny and your partner drops hundreds of dollars without blinking an eye, keep separate accounts for discretionary spending as long as you both responsible with your monthly budget and savings goals.
Giving big, expensive gifts
There’s nothing wrong with getting a present for a special celebration or the occasional surprise, but warning signs should start flashing when your new beau begins to shower you endlessly with lavish gifts such as high-end clothing, fancy dinners and extravagant vacations. This is especially true when the splurging doesn’t match his or her income, suggesting a lack of financial responsibility and budgeting skills.
You should be even more concerned if your partner struggles to pay their bills and has credit card debt. If these gifts are an attempt to impress you, politely suggest finding ways to spend time together that don’t cost much such as going on a hike or exploring free events in your area. This will ultimately show your partner that you enjoy time over material things and help them open their eyes to their excessive spending habits.
Borrowing money often
Someone who borrows money often from family, friends or a significant other and rarely pays it back isn’t just irresponsible and disrespectful, they likely lack basic money management skills — something that could have a major impact on your future financial health. While a few bucks here and there might seem harmless, it can develop into a much bigger issue and lead to serious debt. If your mate is constantly asking for handouts, it’s important to draw boundaries when it comes to loaning money.
More importantly, you have to think about what this behavior means to the future of your relationship: Does this show a general disregard toward others’ money or does it represent a more serious and deeply-rooted financial problem that could have long-lasting consequences?