Financial Red Flags to Watch Out for in Your Potential Partner

“Money is one of the biggest sources of conflict in relationships and is
one of the most difficult topics to discuss for many.” – Rachel Needle  

According to psychologists, financial conversations usually get brushed under the carpet when your heart is captivated by new love. Most of your time, just like your finances, is taken up by planning fancy dinners, romantic getaways, and extravagant gifts. But soon, the ominous issues start becoming more prominent as you feel your savings ebb away. From hiding their debt and pending payments, to being unable to stick to a budget and not wanting to talk about it either, these problems can soon eat away at your relationship! You planned a nice little weekend holiday together and made all the bookings. Your partner brought up a cash strain and promised to reimburse you soon. Only, that tomorrow never comes.  

Red rose or red flag? This Valentine’s Day, let’s identify these red flags and try to mend and prevent the financial problems you may face in a relationship. If you don’t do something about it immediately, these red flags can compound exponentially, before you can say “oops”! Proper financial planning is an important topic to sit down, invest some time, and talk through with your significant other. Before that, several questions pop up. How to decide what is a financial red flag? What to do when these issues become glaring? And, most importantly, how to talk about it without building a wall between you and your new love?  

Time to Hit the Brakes!

The following scenarios can highlight potential red flags about your partner’s financial habits that you must look into:   

Shh! It’s a Secret 

Have you ever found one or several receipts of something your significant other bought without your knowledge? Even more problematic is that they get defensive even if you casually ask about it in a conversation. Usually, you might not care, but what if you both were supposed to save up for a vacation in the hills and this spending brought a halt to those plans. More than the secrecy, the problem is that your partner refused to save for what was to be a joint effort.  

Hidden Figures 

In today’s expensive world, it is quite normal for many of us to have educational loans, business loans, home loans, etc. The problem arises when you find your partner lying about their debt amount or even its existence. Downplaying how much they owe to the bank can be a major red flag, particularly if you two are planning to get hitched and will soon start a common financial journey. In that case, you end up taking on the pressure of this debt without wanting to. This, along with the lying and denial, can cause rifts in your relationship.  

Penny for Your Thoughts 

Is your partner unable to chart out their gains and losses? Sticking to a budget is important in our day-to-day lives, as it affects our future as well as that of our loved ones. If your significant other is finding this a difficult task, find the time to sit down and talk about their money to see if you both can work out something together. Yes, it will probably be tricky at first, but with your combined ideas and support, you can build a budget that could help you both reach your financial goals.  

A Stitch in Time 

Nobody’s perfect; everyone makes mistakes with their bills and dues, encountering money issues every now which then leads to delayed payments. However, if your partner is consistently late with their EMIs, rent, utility bills, etc., and tends to shrug it off nonchalantly, that is a big issue! If you two live together, this is a bigger red flag, since you suffer the consequences too. Plus, it goes to show that your partner cares little about their bad habits or how these ends up affecting on your relationship.  

A Credit Concern 

Does your partner frown and change the topic whenever you ask them about their credit score? Understand this, poor credit in itself is never a monumental issue, but shirking away from the problem shows an alerting tendency to procrastinate! If you see your partner has a number of money-managing red flags, addressing this one could help solve many of them. Otherwise, it could come back to haunt you the day you want to take a home loan or buy a car together, but you find that your partner’s poor credit score is holding you back.  

Talk to the Hand 

Surely, you’ve heard the time-honoured saying “communication is key” used in the context of relationships? Well, it is applicable even in the niche of financial management with your partner. Whether it is a work-related issue or a matter of money, it is always important to talk things out. Hence, if your better half tries to back out from any discussion on your mutual finances, consider it a sure-shot red flag! Poor credit score, stored up debt, nothing is a roadblock as long as they are willing to open up and discuss it with you.  

Beyond a Coin Toss

You cannot turn a blind eye on your financial rifts and just hope to God it goes away. Speak honestly, don’t be judgmental, and tackle your problems together to win over your financial dilemmas. When starting a new relationship, take baby steps in your financial journey too! Make a small financial decision together and build your monetary future from there. As the days turn to months, you can jointly discuss larger money-based choices to practice for more serious decisions in the long run. If speaking about something makes either of you uncomfortable, bring it up so that you can talk about why it might be bothering you.  

Remember, even if some of your partner’s financial habits are disagreeable, never treat them like a rebellious teenager. Such practices can make them further recede into their shell, leading them to become more secretive about their expenses and dues. Tiffany Welka, a financial adviser from Michigan, claimed in a NerdWallet article that couples can work together with mutual love and respect to overcome any adversity. This applies to your finances as well. If you see red flags coming up, take the initiative and overcome them together. Healthy practices and boundaries regarding money, right off the bat in a new relationship can build a strong foundation for your future.