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Love, debt and lies: Why you need to talk about money

Q. I have worked very hard to have good credit and, at some points in my life, I have worked two jobs to make sure my bills were paid.  Now, I am dating a man and we are getting pretty serious.  However, I have suspicions that he has bad credit and might have a lot of debt.  Should I be concerned?

A   Yours is a common question that men and women ask when it comes to relationships and finances.  For that reason, I’m going to refer to your special person as he/she, because you’re in a situation common to both men and women. 

In a situation such as yours, you need to think about why you believe he/she has bad credit or might have a lot of debt.  Do you see past-due bills lying around?  Does he/she complain about creditors calling him/her? Are you paying for everything when the two of you go out?  Before your relationship gets even more serious, you need to initiate some conversations about debt, credit, and money. If this issue is bothering you now, it will only get worse unless you address it. 

According to a recent poll by the National Foundation for Credit Counseling (NFCC), the majority of respondents indicated they would have serious reservations about taking on the debt of the person they love, and might even end the relationship rather than take on debt.  Fifty-four percent of respondents said they’d either postpone marriage until the debt was repaid, get married but not help pay the debt, or end the relationship altogether.   

Often when people marry, they’re surprised that they never thought of the number of differences between themselves and their spouse. Some differences are minor, but others are significant.  Differences about how you handle money, credit, and debt have a substantial impact on a marriage.  And even more difficult than differences are when someone hides debt, or lies about debt or how they spend their money.  Many relationships are not able to survive this.  It may not seem very romantic, but according to researcher Dr. Sonya Britt, money issues are the number one predictor for divorce.

“In the study, we controlled for income, debt and net worth, and the results revealed it didn’t matter how much you made or how much you were worth,” Dr. Britt said. “Arguments about money are the top predictor for divorce, because it happens at all levels.”

Open communication is important.  If you’re in a serious relationship that may lead to marriage or co-habitation, now is the time to share information with each other about your credit, debt, spending habits, and financial goals. Here are some specific questions you’ll want to ask.

  • How much total debt do you each have?  Is it secured debt like a car or home, is it student loans, is it credit cards, or medical debt? 
  • What is the cause of the debt?  Was someone unemployed, injured, had medical issues, or just chose spend money and not to pay his/her bills?
  • Are you now paying your debt on time?  What is your credit score?
  • Do both of you value good credit? 
  • Do you have similar beliefs on what financial roles two people have in one household?

If the special person in your life won’t tell you about his/her credit or debt or gets angry when you ask, you need to determine why.  A person who is unwilling to share his/her information may not be taking this relationship as seriously as you are.  Or he/she may have trust issues from a previous relationship and isn’t ready to share his/her information. 

An unwillingness to talk about finances might hint at bigger problems. For example, someone could be hiding debt due to a gambling problem, a spending problem, an alcohol or drug problem, or some other addiction.  It could also mean this person’s idea of a relationship is that you will pay for everything while he/she spends his/her money as he/she pleases.  Is that the kind of relationship you want long-term?

It’s one thing if your significant other has had credit problems but is working to improve the situation. It’s a warning sign if he/she doesn’t care about credit and debt issues or expects someone else to fix the problems.
Credit is individual and if your significant other has bad credit, it won’t immediately affect you.  However, his/her bad credit can affect your ability to rent or buy a home together should you marry or live together.  It will affect you negatively if you open joint credit accounts and these joint accounts are not paid on time.  It can also affect you negatively if you marry and it takes all your joint income to pay his/her debts, or money is spent unnecessarily and your debts go past due.

Once the information is out in the open, then together you can determine your next moves. It is not unusual for our agency to get calls from people who didn’t take the time to talk about their credit, debt and money before they married, and now one spouse is wondering how to protect himself/herself in a divorce. This situation might be avoided by open communication about finances earlier in the relationship.

Bonnie Spain is the executive director of Consumer Credit Counseling Service of the Black Hills, a United Way member agency. For more information, email credit@cccsbh.com.


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