Treat love like a business and everyone wins!
By Naoimh Reilly
Have you ever considered looking at love differently? You need to view your relationship like an investment. You put a lot of time and energy into it, so it stands to reason you should expect a return.
There are many reading this who might be outraged, but the cold hard truth is that relationships can and do fail because of financial stress.
What if you treated it like you would a business? Love is not all romance, sex and happily ever afters - and it’s definitely not self-sustainable. The old adage of ‘all you need is love,’ is a blatant lie. Love won’t put food on the table.
Love is hard work and self-sacrifice. It’s putting someone before yourself, but not to your own detriment. It’s knowing that you must also sometimes put yourself first. Love is not everything; it’s an important piece of any partnership, but you cannot survive on it alone. Love is respect and love alone will not complete you.
Now that we have those harsh realities out of the way, we can look at the practical steps you can take to make a relationship stand the test of time.
You should make it a point to discuss financial history, goals and credit scores early on in a relationship. This is not the time to ignore such issues of consequence. Would it not upset the balance if your other half has a wildly different credit score to you? What will that mean for your own credit score? All is not lost if your financial situations do not match. It is possible to work together to improve your credit rating.
Let’s put romance to one side for a minute and be both honest and practical. A relationship is, after all, a partnership similar to a business. How would you manage that business? What are your strengths? Every business does a SWOT analysis (strengths, weaknesses, opportunities, threats) so what if you decided to treat the financial aspect of your relationship like you would a business?
What are the questions you need to ask? Such as: Are we good at saving? Are we not good at saving? Do we have unnecessary spending habits? How can we tighten our belts and where can we be more efficient with our bills?
These conversations are difficult to do but can save a lot of heartache in the long run. Is it really that wrong to have reservations about becoming involved with someone who has a very bad credit rating? Of course it depends on the circumstances but will it be something you resent in years to come?
These are the things we must consider now. Because when the first flutter of love wears off and reality kicks in, these are the things that will keep you awake on a Tuesday night. However difficult it is to talk about money, it will be far more difficult when you’re stuck in a financial rut.
Even if your partner’s credit score is less than perfect, there are ways in which you can improve it together. All hope is not lost. If both sides of the partnership are willing to work together, both the credit score and relationship can improve. Here are some ideas to consider:
Apply for a shared secured credit card. If you can manage to come up with the security deposit and make sure you pay off the bills in full, on time every month and only charge part of the credit limit, this will help increase your credit score. Some security deposits can be as low as $200.
Come up with a plan to pay off debt. Pick the lowest debt and pay off as much of that as you can, while still paying the minimum off the rest.
Get educated about good credit habits. Give yourself goals and stick to them. Building a good credit score means learning good money management habits. A lot of the way we spend money is habitual and these habits can be changed.
However, one of the most important things to remember when trying to improve credit score within a relationship is not to let your own credit suffer, if your partner has the lower score. Don’t neglect your own credit to help your partner’s.
Having no credit history at all can be equally as damaging. Being too efficient and paying everything with cash can mean that you are non-existent when it comes to having a credit score. This can affect insurance premiums, rental applications, job prospects, utility contracts, as well as applying for a mortgage. If you can’t prove you’re willing, or able, to pay off debts in a timely manner, institutions and organisations will be reluctant to take a chance on you.
You can fix this by constantly using and paying off, on time, a credit card for a year. This will bring your credit score right up. Lenders always look at a couple’s score together. They never just take one person’s credit score into consideration in a relationship.
It’s very easy to let emotions cloud our judgement when it comes to financial matters. It might seem easier to ignore the elephant in the room but this can cause serious problems later on in a relationship. Risk assessments are a great way to do this. Thinking long term and figuring out what you want in a partner could mean that there are no nasty surprises heading your way when you are too deeply invested.
By outlining your financial situation and financial hopes with your partner, you increase your chances of weathering storms and staying together in the future. It may not look like romance from the movies but it is romance in the real world. By doing this you are giving love a better chance to survive and that is the most romantic thing of all!