Show me your five closest relationships and I will show you who you are. I’m sure you’ve heard this before. The logic here is that the people you are closest to influence you more than anyone else and possibly any other influence. I cannot attest to the numbers but your influences shape your mindset and we see that in personal financial management. What I’m about to deliver here may be a bitter pill to swallow but there are relationships you may be in that are bad for your finances. The signs of these are what we refer to as red flags. These 7 red flags identify bad behaviours that should have us reconsider these relationships. It may also be the case that you are the person with the red flag behaviour and may need to consider changing your ways.
No appetite for saving
Having no appetite for saving is a massive red flag. All discussions of good personal financial management start with spending less than you earn and at the very least keeping that money. So a person who doesn’t have any desires or thoughts of saving money is a definite red flag. Also, beware of people who will save some day in the future or when they finally have enough money. There are many excuses people give but ultimately a person with no appetite for saving is on a slippery slope and may just drag you down with them.
Relying on debt to fund a lifestyle
Another red flag to watch out for is a person that relies on debt to fund their lifestyle. Debt is not all bad, there are many cases where debt is used for benefit. Funding things like lifestyle with debt is one to land yourself in a debt trap. Unproductive and consistent borrowing are signs of poor financial management and being closely influenced by a person with such behaviours risks your financial stability.
Always asking to borrow money from you
Someone who relies on debt to fund their lifestyle is just one step or a bad month away from asking you to help them out by lending money to them. And there’s nothing wrong with helping out someone you’re close to financially. The problem comes when this is a constant or recurring behaviour. If somebody needs to borrow every month it’s a sure sign that they are not in control of their finances. The longer this behaviour goes on the closer it is to falling apart like a house of cards.
Not discussing before making purchases with shared money
This one applies to people with joint fortunes such as those in romantic relationships. Couples working towards getting married and married may decide to combine finances. If one party makes decisions and takes action with shared money without consulting the other party then that is a clear red flag. This is behaviour that should be tackled early on.
Making you feel guilty about not spending your money
It’s become commonplace for people to express their opinions on how other people spend their money. This works best when the opinion is solicited but unsolicited opinions may not be so welcome. Worse still when one is made to feel bad for not spending their money and choosing to instead save or invest the money. People who try to influence you against your financial plans are in reality bad for your plans.
The personal in personal finance is there for a reason. Expecting everyone to disclose their debt everyone else is taking things a bit too far. However, in a relationship like a marriage, it’s a good idea at the very least to disclose debt. People marry in a community of property and that means assuming joint ownership of the assets and the liabilities of your spouse. Concealing debt in such a relationship may leave a spouse with a nasty surprise when the bill becomes due. If a person feels the need to conceal such things there are reasons to question the future of the relationship.
Entitlement over how much you should spend
Back to the matter of opinions, another form of expressing opinions that is a red flag is when people express feelings about how much they should spend based on their income, profession, position or life circumstances. It is quite one thing to have an opinion, even a strong one and another to show entitlement. To discern between the two to spot the relationship red flag.
Relationships are very important to human beings as social creatures. Congruency in certain views matters and the approach to finances is one of those areas where it matters. We could say the closer the relationship the more it matters.