Thoughts for Valentine ’s Day

An important way to be mindful about money is to keep your head when your heart is involved. All too many relationships get into trouble when personal finances are joined before each party gets to understand how far they can trust the other.

An article in this week’s Newsweek cautions: “Be wary . . . . It is not just your signature on a piece of paper. There are repercussions that can hurt your finances and creditworthiness for years to come.” (See, “ 5 Financial Miscues in the Name of Love.”)

Typical mistakes include co-signing a loan or a lease or taking out a joint credit card before knowing much about the financial behavior of your partner. In the flush of a new relationship, it can feel mean-spirited or harsh to refuse to help out in the way he or she expects. Moreover, sharing financial responsibility might even seem like a good way to build cooperation and trust. But if the contingencies are not worked out in advance, it can easily backfire.

You don’t necessarily need a legal document or a pre-nuptial agreement. But, you do need some serious conversations that anticipate the many things that can happen, the things that you won’t expect and, probably, don’t even want to think about. Credit companies will seek out the more prosperous member of the couple when payments are missed, and that can be a devastating moment of truth. That shock can become corrosive to the entire relationship. And how you will both handle job loss, illness, family crisis, accidents, undisclosed or forgotten debts and other obligations?

It is not unusual these days for new partners to have serious and frank conversations about past lovers and previous sexual activity. But we tend to be more secretive about money. In our culture, self-esteem is closely tied to financial success, and that makes it feel risky to be too open. Moreover, security can feel jeopardized when too many people know too much about what you’ve got in the bank. The rich worry that their friends are attracted to their money more than to them, while the poor often go to great lengths to conceal what they don’t have and keep up appearances.

“You don’t trust me,” can feel like a devastating reproach, but trust that is not grounded in experience is mere gullibility. It is not something you can force or take for granted. You build it carefully and slowly over time.

(Also published at Mindful Money)