How to Protect Your Finances When Love Is New

Mixing money and relationships takes education, skill and emotional intelligence. Each year, thousands of people are victimized by the belief that the pursuit of love justifies taking risks, especially with their finances. The temptation to make financial decisions in the name of love can be especially pronounced in the months leading up to Valentine’s Day, when the pressure to be ‘coupled-up’ can reach a fever pitch.

As a result, too many people emerge from romantic relationships with bigger problems than just broken hearts and hurt feelings. Making poor decisions with money and relationships often results in empty bank accounts, devastated credit histories, crushing debt, and even bankruptcies. My wife, business partner, and personal growth speaker and trainer Zara D. Green and I address these risks and realities with our Grown Love and Money (GLAM) Sessions. We present GLAM at events such as Bishop T.D. Jakes’ MegaFest and Tom Joyner’s Fantastic Voyage Foundation Cruise. Our message to session attendees: “I did it for love” is a sad, sorry excuse for poor financial decision-making, and will provide no protection against its consequences.

The truth is, in too many cases, the object of your desire is more interested in the money in your wallet than the love in your heart. To protect yourself, here are key dos and don’ts–and major red flags that should never be ignored–in order to avoid destroying your finances in the name of love.

DO NOT cosign on credit cards, car loans, cell phone contracts, or other joint financial commitments just because you are in love.

When you cosign on a loan that goes into default, you–not the primary borrower–will most likely end up having to pay off the loan.

DO draw a hard line against requests for loans and other financial assistance.

A love interest making a request to borrow money is a major red flag, especially in a new relationship. If you feel you must grant such a request, insist on a written agreement laying out repayment terms signed by both you and your would-be Valentine. Otherwise, you’ll have no way to prove the money you gave was a loan (not a gift) and you’ll have virtually no way to get it back. If she becomes hurt, angry, or resentful of you, or is otherwise resistant to signing such an agreement, hold on to your money–and pump the brakes on the relationship.

DO keep your PIN, bank account numbers, ATM passwords, and other personal financial information protected.

Far too often, acquaintances perpetrate identity theft, fraud, and other financial crimes. They are more likely than strangers to be able to gain access to your information. This is because they spend time with you, especially in your home. Keep all sensitive financial documents, including checkbooks and bank statements, out of sight in a safe, secure place. There is no reason a love interest, short of marriage, should have your Social Security number and other sensitive information. Consider it a major red flag if they ever ask or press you to share it, especially early in a new relationship.

DO NOT assume financial responsibility for an adult dependent.

Is your new sweetheart looking for a romantic partner? Or is he seeking a source of interest-free financing, with no repayment required? For the sake of your finances, resist the temptation to financially support adult dependents in return for their affections. Be especially suspicious of people who are in a constant state of financial emergency and expect you to come to their rescue.

Key questions to ask with money and relationships.

When you are tempted to make decisions with money and relationships that could put your financial health at risk, always ask: Would I make the same financial decision if I were not romantically interested or involved with this person? Would a person who was not a romantic interest expect me to? Would she even feel she had the right to ask? If the answer is no, don’t do it.

Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert,  personal growth/relationships coach, and co-founder of Grown Zone, a relationship education initiative focused on personal growth and healthy decision-making. This blog is dedicated to his thoughts about money, entrepreneurship, leadership and mentorship. Follow him on Twitter at @AlfredEdmondJr.