Swiping right on Tinder? Watch out for STDs. (That’s Sexually Transmitted Debts)
It’s the great untold illness of personal finance. That’s sexually transmitted debts (STDs). It’s bad enough to build up your own debt. But when you shack up with someone else you often take on their debt as well.
It’s easy to do. You spot someone across the bar, or on Tinder. The next thing you’re wildly in lust and then you become one. Bet you didn’t ask how big his or her debt was before falling head over heels for the happily ever after dream.
Next thing you’re lumped with tens of thousands of dollars of sexually transmitted debt. Even worse, the relationship may end with you left in the financial mire.
In the real world ill-chosen partners can ruin your credit score or up and leave you holding the debt baby. Oh dear, how did you get here?
Don’t be naïve
Whether you’re from a street-savvy family or had to learn the facts of finance on your own, you need to understand the risks. If you’re asked to sign any sort of agreement or the other person has family trusts and companies, take some legal advice so you know the worst case scenario.
Beware of going into debt for your partner
So you’ve got savings and that to die for man or woman you just met is in debt. You’re ‘one’ now, aren’t you, and of course you should help him/her. There are a lot of very manipulative people in our world. Ask yourself if you’d do this with your own money. You are entitled to use your money for your dreams as well.
Watch out for going guarantor
Maybe your new partner wants to buy a nicer car or new iPhone, or “needs” your money to start a business. Never, ever, ever, go guarantor for anyone without getting independent legal advice. Did you know that you’re guaranteeing all future debt by that person? Even if you split, the bank can hold you to this for as long as it takes for all existing debt to be paid off and can even come after you for the whole shebang if your partner defaults or does a runner. Any new debt by your ex is your responsibility as well. The nightmare only ends when you get a letter from the lender ending guarantor status and you won’t get that without the debt paid back.
Make sure that you’re on top of your overall financial situation as a couple – even if you hold his and hers bank accounts rather than joint money. It’s fine for every couple to manage their money in a way that suits them. That’s providing everything is on the table, warts and all. So take a deep breath and start those courageous conversations now. Ask that wonderful new date or new partner these deal breaker questions:
- Are you a tightwad, spendthrift, or somewhere in the middle?
- What do you spend on yourself?
- Do you live from payday to payday?
- How did your family manage money?
- What do we both own and owe already?
- Are we going to budget?
- Will we have joint accounts or separate?
- How much his and her money can we each have without having to consult the other?
- What are savings for?
- What are your financial priorities?
- Have you ever done stupid things with your money?
The Australian Securities and Investment Commission’s Moneysmart website has a wealth of helpful advice.