Should You Ever Pay Your Significant Other's Debt?
By Stephanie Faris
When it comes to relationships, love doesn't always conquer all. Financial matters have the ability to cause friction in an otherwise happy couple, leading to repeat arguments that can eventually kill the relationship. Studies have shown that married couples that argue about money are more likely to divorce, even if the disagreement pops up only once a month.
Short of running a credit check before every first date, there isn't much a person can do to ensure someone is financially stable before starting a relationship. There are many people who have great jobs and impressive incomes, and yet they are struggling with a mounting pile of debt. Some may even present themselves as having a great deal of disposable income, which means by the time you learn about their behind-the-scenes debt, you're already in too deep. What should you do if you find yourself in a relationship with someone who has substantial debt?
Why You Might Be Tempted to Pay Off Your Partner's Debt
Once a relationship begins to get serious, many people ask the question, "Should I help pay my significant other's debt?" This often comes into play when a couple considers taking on a major financial obligation together, such as purchasing a house. Having low debt and a great credit score becomes more important than ever, which could lead a person to want to pitch in and help their partner.
In recent years, many Americans have fallen on temporary tough times. One job loss can wipe out a person's savings and lead to tens of thousands of dollars in credit card debt. Whether you met someone after he had recovered from tough times or those tough times occur after you met, should you pay a significant other's debt? Unfortunately, the issue is never black and white. There are several factors that come into play when making that decision.
The Underlying Issue That Led to Debt
At its heart, a significant other's debt goes much deeper than the overdue notices coming in. How does he respond to financial troubles? The key to a relationship's survival amid financial troubles is whether or not they each share the same basic philosophies when it comes to savings and spending. If one partner spends every dollar as soon as it hits the bank account and the other is thrifty, eventually the separate views can tear a couple apart.
Another thing to consider before paying off a significant other's debt is the nature of that debt. Was it incurred as part of a brief bad spell or did the person just irresponsibly blow thousands of dollars? If the debt is a result of someone not paying court-ordered bills like judgments or child support, the underlying issue becomes even more important to the future of your relationship.
Debt and Married Couples vs. Unmarried Couples
Your decision regarding paying off a significant other's debt is likely very personal and unique to you. Your friends and family may weigh in on the issue but even a financial adviser is likely to ask a few qualifying questions before offering advice. A married couple may have more protections in place if the relationship doesn't work out, since courts will look at debts and assets and divide them according to local laws. An unmarried couple won't have those protections and if the relationship ends, you may regret putting significant money toward the other person's debt.
Perhaps the biggest problem with paying someone else's debt is that it's only a temporary measure. The indebted person may even be currently adding more purchases to the bottom line. It's not enough to simply throw money at the problem, and this could result in the problem just getting bigger and harming both partners instead of just the person with debt. It would be far more beneficial to try to help the indebted partner to pay off the debt in a planned manner, using the income he brings in each month. You could even offer to pay all of your regular shared bills in the meantime to allow the person to focus on getting those debts paid off.
4 Signs You Shouldn't Take On Your Significant Other's Debt
While there are some instances where paying off a partner's debt is a good idea, there are many more instances when you should refrain. Here are a few situations where it's a bad idea to pay off your significant other's debt.
- It puts you in debt. Never take out a loan or wipe out your savings to cover your significant other's debt if it puts you in a precarious financial position. You should only consider helping when you can do so without putting yourself in debt or eating into your emergency fund.
- Your significant other is hiding things. If your partner isn't completely transparent about his financial situation while asking for money, don't agree to help.
- Your intuition tells you no. While experts and loved ones can advise you, your inner voice likely tells you more than they can. Also, if everyone in your life is against lending your partner money, you probably should question why there's such opposition.
- It threatens your own credit. This includes co-signing on loans, which can cause long-term damage to your own credit.
Within a marriage, helping with a spouse's debts may be necessary in order to qualify for large shared purchases like a new home. However, for couples that aren't legally bound, any payments you make toward the other person's debts could be lost if for some reason your relationship doesn't work out, or could divert your money away from your own important financial goals. Be sure you know the risks before making the commitment to help.