Did you run up some credit cards in college? Pay a few late bills between jobs? If you have debt and/or bad credit, you probably know it. But does your partner? It's not easy opening up about the subject of money, but it is important.
We consulted with Brad Kanter, C.P.A., E.A. of Kanter & Associates, P. A., C.P.A for advice on how to have this tough conversation.
HeadDrama:
If you have bad credit or a lot of debt, how do you broach the topic with your partner?
Brad Kanter of Kanter & Associates:
It is important to always be candid prior to merging finances or entering into a serious relationship. Money is a big topic and the source of much marital and relationship divisiveness. It is therefore critical to not be ashamed of one’s negative financial situation so long as that person recognizes the financial position and is willing to make positive changes to fix it.
{see related article: should you merge your finances?}
HeadDrama:
At what point in a relationship is it important to talk about finances?
Brad Kanter of Kanter & Associates:
This is a personal decision, but for me, when you know your level of commitment towards someone is high enough to trust them with your weaknesses, past mistakes and future dreams, it is an appropriate time to have that discussion.
HeadDrama:
How much does your partner need to know?
Brad Kanter of Kanter & Associates:
Your partner should know as much your willing to share, but realize that fundamentally if you are calling someone your “partner”, you are already entrusting them with many sensitive pieces of information. In addition, the more honest you are with an important person in your life, the more you have to gain from the relationship.
HeadDrama:
How can bad credit or a high debt load affect them?
Brad Kanter of Kanter & Associates:
If two people are purchasing assets together such as a car or home and both parties are applying for the loan, both credit reports will be used to determine eligibility. If one person has bad credit and or a high debt to income ratio, it could undermine the loan approval.
HeadDrama:
What do you tell people who are too embarrassed to be honest about the situation?
Brad Kanter of Kanter & Associates:
I explain to people that begin able to honestly share this information with an important and trusting person in their life will help them take the next step to fix their negative financial situation. In addition, although less financially related, the ability to be candid, even when embarrassed, is the sign of a strong relationship which can share the burden and fix the problem, should one exist.
Brad Kanter, C.P.A., E.A. Principal Kanter & Associates, P.A., C.P.A. has 17 years experience in public and private accounting. Kanter & Associates P.A.,C. P.A.’s founder is a licensed Certified Public Accountant (CPA), an enrolled agent licensed by the U.S. Department of Treasury.
Brad Kanter received a B.S. in Accounting from the University of Tampa including his fifth year. He also received a B. A. in Marketing from Florida Atlantic University. He is working on his Masters Degree in Accounting specializing in Forensic Accounting. Kanter & Associates, P. A., C.P.A. is a firm that has been serving their clients for over a decade in the Tampa Bay Community.
Brad Kanter C.P.A., E.A. Principal Kanter & Associates, P.A., C.P.A. is a resident of the Tampa Bay area. He is married and the proud Dad to three boys.
