Is love destroying your finances?
We all love being in love! The butterflies, the smiling, the first kiss. I’m not going to lie, being in love is great. It’s what people dream about. It’s what Hollywood makes movies about. Enjoy the love when you find it, but don’t let it ruin your finances!
Often times, couples who are in love throw logic and care to the wind. They end up making decisions that wreak havoc on their budgets, savings accounts, and worse: credit scores. You can save yourself a world of hurt by avoiding these five faulty decisions.
1. You Go into Debt for a Valentine’s Gift
Going into debt for consumer purchases is just bad practice in general. You would never do this with your own purchases, so why would you go into debt for your significant other? If you can’t afford something, don’t go into debt for it! Consider a cheap Valentine’s Day gift.
You want to avoid paying interest on the debt at the end of the month. If money really becomes an issue, talk it out and possibly do something simpler. It’s not always about the gift, sometimes spending time with each other is more important.
2. Paying for His/Her Rent or Car Loan
If you’re not married yet, paying for each others loans is flat out stupid. You’re not sharing assets yet so why would you do this? Who know if a breakup is around the corner? Don’t risk your money. It might seem nice to do it, but you could get burned in the long run.
3. Never Talking About Finances
Did you know that finances are the number one reason for divorce in the United States today? Even more shocking is that many of these problems could have been solved by talking about finances early on in the dating stage.
Waiting until you get married to talk about finances is dangerous and can wreck havoc on a relationship as well as your bank accounts. You need to discuss spending personalities, habits and financial history.
You don’t want to wait until you’re married to find out your significant other has 50k in gambling debt. Financial problems can be a real deal breaker for some people. Talk about finances often and early on. You will thank me, trust me on this one!
4. Share PIN Numbers with Your Girlfriend or Share Credit Cards
Oh boy, I still can’t over the fact that people do this! If you’re dating, why would you share your ATM PIN?! You’re just asking for trouble. Until a ring is on her finger, you should never share this information!
You should be 1000% sure that you’re going to get married before you share this type of info. What if the relationship ends up badly? Do you really want a crazed person running around going on a shopping spree with your ATM info?
I know I don’t, and I’m sure you don’t either. Sounds like hell to me. Keep transactions separate for the time being. Once you’re married, go ahead and share this info. Until then, keep it confidential.
5. Opening Joint Accounts When One Person has High Amounts of Debt
This is a rare instance where I actually recommend couples not to open joint checking accounts. The reason being is that both of you will get dinged and locked out from high interest savings rates and low interest loans.
If one person’s account has some serious debt, keep the accounts separate and make it a goal to get all the debts paid off. Only after you have paid off the debt for one account should you open joint accounts. You don’t want to tie up money when you don’t have to. You really should avoid this.
As you can see, there are some serious financial traps that are easy to fall into if you’re in love. Don’t let love blind you and ruin your financial future, it’s just not worth it. Try to iron things out before the wedding and communicate as much as you can about finances during the dating stages.
What do you think? Is this good advice or do you disagree? What are some of your experiences?
Photo by harry ng
