If you’re in a relationship with someone you care about but whose track record with money is less than ideal, there are steps you can take to protect your own financial picture while helping them acquire better habits and re-establish their financial situation.
- DO unpack the underlying influences in their family history or upbringing that may be feeding unhealthy attitudes and habits with money. Start this conversation in a safe moment, not during a crisis, and frame it as nonjudgmental, mutual sharing. The goal is to understand each other’s point of view about money and establish an open channel of communication. A foundation of openness and trust will help make future adjustments feel cooperative, rather than threatening or judgmental.
- DON’T make any financial commitments together while their finances are in bad shape relative to yours. Did you know, even if you marry, your credit scores remain separate? It’s true. Protect yourself by keeping your bank accounts, credit cards, and other accounts separate until they have restored their financial picture. Till then, do not co-sign loans or undertake any other financial responsibilities on their behalf. Put off major purchases like a house or a car unless you are comfortable tackling them alone, for now.
- DO help them develop healthy financial habits. It may take a few years for these habits to become second nature, especially if smart money management was not part of their upbringing. Help them acquire good money habits by modeling them and practicing them together:
- Pay bills on or before time
- Maintain low balances on credit accounts
- Avoid opening new accounts, unless necessary
- Pay off debt
- Review your credit report once a year to confirm that the information is current and accurate (and forestall identity theft)
Your relationship doesn’t have to compromise your financial health if you take these practical precautions and give yourselves the time you need to get on the right track together. And, the journey may even bring you closer as a couple!
What a great but very fraught topic. My husband and I decided early on that I would take the lead on the day to day money management but all decisions on big purchases, loans and new credit cards would be joint decisions. Most of the time this strategy works as I have the more appropriate skill set to manage the money. The key is to make sure that communication is open and non judgmental. If one of you takes the lead make sure there is respect from your spouse and trust.
SO, I agree that communication is key, especially, in situations where management of the finances has been delegated to the spouse with the more appropriate skill set. Without proper communication, the less involved spouse may face unnecessary financial loss in the event of incapacitation or loss of their spouse. Thank you for commenting.