Should Debt be a Deal Breaker in Your Romance?

By on Thursday, 20th October 2011

The Beatles said “All You Need Is Love,” but they failed to mention the importance of a good income-to-debt ratio.


An increasing number of would-be marriages are ended before they begin due to the large debt that one person might bring to the party. Cupid’s arrows might pierce the heart, but large sums of debt is something entirely different.


“The Early Show” took a closer look at this unfortunate trend in relationships.



Allison Eastman’s three-year engagement was called off when her fiance learned that she had she’d incurred $170,000 pursuing her college degree.


She initially told him her debt was “well over $100,000,” but that she didn’t really know the exact amount. At the time, the money wasn’t an issue for him and three years later, he proposed.


When it came time to plan for their wedding, the couple hit a road block as they were getting their finances in order.



According to Eastman, when she took a closer look at her finances, she nearly fainted at the actual total. Then she broke the news to her fianc¨¦.



“He seemed understanding at first. And then the next day he came home from work and was very, very upset, and you know, just accused me of lying to him for the past three years,” she said.



Three days later, he called off the wedding.



“I was shocked. I was very shocked. I was hurt, I couldn’t believe it,” Eastman said.



So should debt be a major issue in your budding romance?


“Early Show” Financial Adviser Ray Martin, and Cooper Lawrence, a psychologist and relationship expert sat down with “Early Show” co-anchor Harry Smith to discuss the financial and emotional aspects that can give love a run for the money.



So were Martin and Lawrence surprised by Allison Eastman’s story?



“No. I mean, this is a whole generation of narcissists who feel entitled and run up all kinds of money, all kinds of debt because they feel ‘I deserve a house, I deserve cars,’ all that kind of stuff, ‘I deserve to live beyond my means,'” Lawrence said.



Should a relationship hinge, though on something like this?


“It should if it’s about the person’s personality. It’s one thing if you are trying to get a Ph.D., further your career or doing something to improve your life…but a very different message you are sending of your character than if your someone just living — all their bills are on their credit cards, they like to shop. Two very different people there,” she added.



“If you’re meeting for coffee, and it’s your first date. Do you bring your tax return with you?” Smith asked.



“There’s a time to talk about this. I don’t think the first date,” Martin said. “The seventh, the eighth date, the third date, I don’t know when you do it. But, you know, there is a time to do it.


“Here’s, why you talk about having kids. You talk about careers — as operations of things you want to accomplish together, money is a central part of that, all that goes into that. So, you have to talk about that because if you have a lot of debt built up, it could be a constraint. We can’t buy the house we want or have as many kids as we thought until we do this,” Martin added.



Relationships are about dreams and aspirations and if you have a giant dead weight behind you, Martin said, it is kind of hard to take off.



“You’ve got to get it out there. I think relationships are about trust. And trusting, we can talk about this together and talk about how we’ll deal with it together,” he said.



“That’s why full disclosure is important, that’s the first part of trust. If I’m willing to disclose everything about myself even my horrible finances, that says a lot about me as a person and the future of our marriage,” Lawrence said.



When is the best time to break the news and drop the financial bomb?



Lawrence joked, saying that the news should be told in a moment of passion.



“That’s the beauty of saying it when you have all the hormones going and totally in love. You feel like, we can surpass anything together and have that feeling of optimism for the relationship, a great time to say I’m really in debt here,” she said.



It’s best to disclose the debt before you start planning the wedding.


“And feelings are transient, they are at the moment. When you have that kind of debt, $170,000 in debt, it could take 20 years to pay off and you will live with that for a long time after the romance is over,” he said.



Does the kind of debt really make a difference?



“There are kinds of debt. And it speaks more to your attitude about money. If you group up in a family where money equals love, that’s a problem. If the way you expressed your love by buying something for somebody that’s very different than if you feel like money is just to pay bills. Your attitude about money, how you grew up with money and why are you in debt,” Lawrence said.



Martin points out it’s important to know if your partner is a saver or spender.



“You have to get it on the table and there are documents to look at for folks, bring your credit reports to the table. Then show every account you have, how much you owe, are they current. Credit scores and tax returns look at those things together,” Martin said.

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