Relationships With the Financially Unstable
We all have a list of the qualities that a partner should possess. However, a partner with an unstable relationship with money can trump them all. Yes, even if they cook like a Michelin rated chef, love your family and that weird noise you make when you sleep, negative money management skills can quickly spoil things. Relationships with the financially unstable are not doomed. But, they do need a concerted effort to repair and it starts with open communication.
Knowing when to have the money conversation is important… especially when you see the following red flags.
- They are not open about where their money comes from and goes.
- Always quick to whip out the credit card or cards.
- No discernible budget or they don’t follow through on the budget they have.
- They don’t pay their bills on time unless reminded to do so.
- No savings.
- They borrow money… a lot, and not from the bank.
- They don’t want to talk about money. Ever.
Money is still one of those really taboo subjects and we can’t afford for it to be that way. It can lead to resentment, problems, and arguments in relationships. A 2018 study put together by the Financial Planning Standards Council and Credit Canada found that 36% of people in relationships have lied to their partner about money. One of the leading causes of divorce is a difference in money philosophies; it is a far bigger deal than many acknowledge until they find themselves on the brink of catastrophe.
When you see any of the signs listed above, take it as a cue to have the ‘Talk’.
Make A Date for the Talk
It’s always good to have some general questions ready to spark and guide the discussion. You both need to be honest about how much debt you have. What your plan is for dealing with the debt. What big purchases you plan to make in the future. Does it include a home or a car? Travel? Starting or continuing education? Children?
Bring your bank statements, your credit report and engage in conversation regarding your financial status and your plans for managing your money in the future. Get everything out in the open. Identify your individual money styles and the strengths and weaknesses that come with it. Emotional spending or spending from the fear of missing out are legitimate issues.
Create goals that you can work on together, both long term and short term. You can support each other and keep each other accountable. It may be that it means you are able to create a joint account for creating some savings. You may find that one is able to shoulder some additional financial responsibility, for the short term, in order to give the other a bit of space to address the issue.
Be patient. It takes, on average, 66 days to create a new habit. If you think that the problem is bigger than the both of you or that you need a hand with accountability then a financial planner could get you both set up.
In the end…
A partner with bad money skills isn’t the end of the world. However, a partner that can not or will not take steps to improve the situation, once it is out in the open, is a bad bet. Hiding debt is a breach of trust. An inability to communicate about the tough things, like money, is often one of the reasons that a relationship breaks down. While you are each responsible for your own debts before marriage or going the common-law route, a partner with a bad credit history can keep you from moving forward. Particularly if you plan to buy a home or qualify for a mortgage with a decent interest rate.