You want to put your best foot forward in the early stages of a relationship. You may even incur credit card debt in order to impress the person you’re dating.
According to a survey, 41% of 600 respondents are willing to incur up to $2,500 in credit card debt to impress a new love interest.
While it’s understandable to be with someone who lavishes you with gifts early in the relationship, you may be ignoring important red flags regarding money. It’s also essential to talk to your financial planner about it.
Coaching couples on budgeting, the root of money problems in a relationship is usually a lack of communication.
A lot of conflict stems from people never having a genuine conversation about money, sharing their beliefs about it, their values around making it, spending it, saving it, investing it, giving it, lending it, and so on.
Here are five red flags about money to look out for if you’re dating someone new:
1. Avoiding money conversations altogether
Couples should begin discussing money as soon as possible in their relationship, even if it’s as simple as who will pick up the check for a date or what the price limit is on a Valentine’s Day gift.
If one partner believes, ‘I paid my bills, and now I can spend it all,’ and the other believes, ‘No, we should save it,’ that will cause friction for some people,”.
It is preferable to agree on how you will spend your money as soon as possible.
Financial secrecy can create a schism between couples, preventing them from laying a solid foundation for their relationship.
2. Maxed-out credit cards
Maybe you’re out to dinner, and they pay with a credit card that’s already maxed out. “That’s a red flag,” says the author. It is an indication of excessive spending. This can jeopardize the couple’s ability to save money not only for emergencies, but also for other future goals such as starting a family, buying a home, and saving for retirement.
Overspending may indicate that your partner is not considering their own future, let alone the future of both of you.
3. Dodging debt collectors’ calls
Partners who owe the IRS or have debts that have been turned over to collection agencies should be avoided, especially if they avoid calls from creditors. This is another sign of overspending or a lack of awareness of their own financial constraints.
4. Borrowing money from friends and family, without paying them back
Be wary of partners who borrow money from others and fail to repay it on time.
This should cause you to pause and say, ‘We need to think about what’s going on here and why,’. These are the kinds of things you should pay attention to and, at some point, discuss.
This could be another sign that your partner is overspending. However, it may be more complicated than it appears.
For most people, when there’s a money problem, it’s due to overspending,’. However, there are some people who simply do not earn enough money to cover their expenses, which is a different topic.
5. Neglecting their retirement savings
Saving for retirement shows that someone is thinking about their future seriously. Looking specifically for someone with a retirement account narrows your dating pool to about 49.5% of people your age if you’re between the ages of 24 and 39.
A partnership will fail if one partner is seriously considering retirement while the other does not even have a retirement plan in place.
Not planning for retirement could indicate that your partner has a general lack of financial literacy.
It’s not that these are stupid people. It simply means that they haven’t been taught to value and recognize the importance of preparing for a future that is unavoidably coming.
