This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Financial Miscues in the Name of Love

BOSTON ( TheStreet) -- True love means never having to say you're sorry. Or, alternately: "I'm taking you to court because you've ruined me financially."

When a couple is in love (or at least think they are part of something destined for "happily ever after"), the temptation is to share and share alike. What's mine is yours -- " mi dinero, su dinero."

When relationships go sour, mingled finances can be the most painful thing to separate.

Sadly, intertwined finances can be disastrous if the relationship does fray. In fact, money problems can be the source of friction that sours a relationship.

"I really think that people's emotions can override their common sense," says Gail Cunningham, of the National Foundation for Credit Counseling, the nation's longest-serving nonprofit credit counseling organization. "When you are in love you can look at life with rose-colored glasses if you want to, but don't look at your finances with them on. Make financial decisions with your head, not your heart."

The following are five ways couples can set each other up for financial woes:

Co-signing a loan
On the surface, co-signing a loan for your beloved may seem the right thing to do. Your partner might need to buy a new car or get a student loan. The former may be a necessity, the latter something that can offer a significant upside for your future together.

Be wary, though. 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.

Your significant other might be a wonderful person and seemingly responsible. But be honest with yourself: There is a reason they needed to ask for a co-signer. If it is because they don't earn enough to qualify, what makes you think they can handle an additional monthly bill? If past credit problems makes getting a loan on their own impossible, that may very well be a portent of how seriously (or not) they treat their responsibility to creditors and, by extension, you.

If your partner defaults on the loan, whether or not you are still a couple, you will be on the hook. Debt collectors will typically go after low-hanging fruit when they look to recoup money; if they think your former love can't, or won't, pay up, they are going to set their sights on you.

Not only will you have bill collectors hounding you, but your credit rating will suffer. Even if your partner does make reliable payments, you may feel a pinch. Even if it is not "your" loan, in the eyes of the credit agencies being a co-signer means it can be treated as such for your ratio of debt to credit.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,366.13 +170.71 0.99%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,626.3860 +60.2480 1.32%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs