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How to Survive Dating a Financial Disaster
Posted on: 12/2/2018
Love may be blind, but when it comes to money, debt collectors, the Australian Tax Office and the company that supplies electricity to your house all have 20/20 vision.

If you’re in a serious relationship with an end goal of spending the rest of your life with someone you can trust completely, you simply can’t afford to ignore your other half’s financial situation.

Money only becomes more important as a relationship goes on, not less! In fact, according to one university researcher, it is the biggest predictor of relationship failure:

”Results revealed it didn't matter how much you made or how much you were worth. Arguments about money are the top predictor for divorce because it happens at all levels."

In this article, I show you how to navigate the tumultuous seas of your partner’s questionable finances and give you advice that will help you decide if you’re prepared to weather the storm or if you should jump ship now before it sinks altogether.
Step 1: Think About How You Found Out
Nobody starts a first date with, “Hi, I’m Greg. I have $23,000 in personal loans at 19% interest, and also I have no savings.” 

However, as things move from casual to serious, both parties need to be aware of the other’s financial situation.

If your partner comes clean about their money woes before it becomes an issue in your relationship, half the battle is won.

If, however, they’ve been dishonest about their situation (and this includes lying by omission), and you’ve caught them out, your relationship has bigger problems than just money.

People tend to lie to their partner about money because they want to:

a) Avoid confrontation
b) Hide an addiction or;
c) Avoid the repercussions

If dishonesty is a part of your relationship, that needs to be addressed before you tackle any financial problems.
Step 2: Crunch The Numbers
Before you decide whether your love interest’s finances are a deal breaker, you need to know exactly what you’re working with.

This isn’t a conversation you should be having with someone you’re casually seeing. It’s for couples in committed relationships who need to get it all out on the table before taking the next step. Unveiling one’s finances is never easy, but there comes a point where it’s necessary.

To soften the blow, it’s a good idea to go through both of your financial situations together at a time you’ve both agreed to set aside.

To figure out where each of you stands, you’ll need to know your:

Incomes: Money you receive through work or investments.
Assets: Valuable items, property, cash, debts owed to you and intellectual property.
Expenses: Payments you make for good or services.
Debts: Money you’ve borrowed that needs to be repaid.

Once you have gathered this information, you can enter it into a budget planner to see if you’re in the red or the black. When you know the exact figure that sums up your total financial situations, it’s time to figure out how you both got to where you are.
Step 3: Delve Into Their Relationship With Money
Everyone has a relationship with money, and the health of this relationship will inevitably affect your relationship with your partner.

This step involves finding out if your partner’s relationship with money is just unhealthy or if it is toxic.

An unhealthy relationship with money can form simply because your other half has ill-informed ideas or bad habits.

If financial literacy and improving life skills are the only issues, you and your partner probably won’t have to take drastic measures to get their finances on track. The solution may be as simple as teaching your partner how to budget so they don’t incur overdrawn fees, or explaining how a balance transfer works so they can freeze their credit card interest and start paying down the debt.

A toxic relationship with money, on the other hand, stems from deeper psychological or emotional issues that actually have nothing to do with money. 
Compulsive gambling, shopping addictions, drug habits, alcoholism and other problems that manifest as money issues have other causes rooted deep in the psyche. 

These problems - which can be deal breakers - are often hinted at by small warning signs like:

• Your partner always avoiding discussing money
• Your partner never having reasons for being broke all the time
• Your partner showing indifference to their credit rating or debt
• Your partner showing unexplained depression, anxiety, agitation or hopelessness
• You noticing money or valuables around the house going missing
If this sounds like your significant other, they may need professional financial and psychological help.

Don’t ignore these red flags. Being partnered with someone who has a toxic relationship with money could set you back for years or even decades.
Step 4: Talk About Your Long Term Goals
In any relationship, it’s important not only to find out whether you and your partner want the same things in life but if you’ll be able to achieve these things given their financial situation.

You’ll need to be on the same page about money if and when:

You want to get married: When you marry, it’s not just the cost of the wedding you need to worry about. Married couples have to manage money together, which means your days of looking after just your finances are over. Aside from sharing day-to-day money management duties, you will also have to:

• Start including your spouse’s income on your tax return
• Update your wills as any you wrote before marriage will become invalid once you wed
• Re-evaluate your super as may be able to make contributions for your spouse and use them as a tax offset.

You want to buy a house: Both you and your partner’s credit histories and current financial situations will affect whether you’re eligible for a home loan and what kind of interest rates you can lock in.

You want to start a business: While your partner might not be actively involved in your business, your life will be a lot easier if they aren’t broke while it is getting off the ground. Most businesses don’t become profitable for up the three years after establishment, so once yours is up and running, you probably won’t be able to support anyone else financially.

You want to retire young: You’ll both be able to retire earlier if saving, investing and increasing earning potential is something you work towards together.
Step 5: Get Professional Advice & See If They Follow It
Change is rarely easy, but it always starts with admitting there is an issue, ceasing the problematic behaviour, and taking steps to rectify the situation.
Finding a financial planner is the first step. Not only will they help you make a solid plan for the future, but as an expert and objective third-party they can help make the bitter pill of financial responsibility a little easier to swallow.

Once you know what needs doing, it’s time to see if your partner does it.
As the old saying goes, “actions speak louder than words”.
Step 6: Avoid Financial Entanglement In The Meantime
While you’re waiting to see if your dearly beloved is going to do what it takes to salvage their finances, it’s crucial that you don’t become any more entangled than you already are. Things that you shouldn’t even begin to consider doing before you’re both on the right track include:

Opening a joint account: The thing about joint accounts is that they come with inherent risks. If your partner decides to make large purchases on your joint savings account, you can’t stop them. And, if they recklessly spend big with your joint credit card, you will be responsible for making the repayments at the end of the month.

Acting as guarantor: If your significant other can’t afford a new phone plan, personal loan, or credit card, you can’t afford to act as their guarantor. Why? Because if they don’t hold up their end of the bargain, as a guarantor, you are legally responsible for making all of the repayments (including interest, fees and charges). And, even if you pay out the entire amount of the loan or contract, in the end, you won’t legally own the item you paid for.

Continuing to enable them: Footing the bill now and then is a nice gesture, but if you are constantly paying for outings, groceries and utilities, you are ultimately doing your partner a disservice.

First, the money you spend on your partner could be saved or invested in your future together.

Second, when you keep the cash flowing you teach your significant other that their poor choices have no consequences. If you’re not used to setting boundaries - something every flourishing relationship has - your finances are a great place to start.

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