Should you date someone with debt?

The answer to this question is, of course, “It depends”.

We all know the red flags to look for in a relationship with regard to money:
–  They never look at the price of anything and spend money like there’s no tomorrow.
–  They have credit or debit cards turned down more than once when you are with them.
–  They ask to borrow money from you or from their own friends and family.
–  They get calls/letters from debt collectors.

Sometimes, however, things aren’t always so cut and dry.

What if you found out that a person you really liked had $10,000 of credit card debt? What about $100,000 of student loan debt?

Should you run away from someone with debt?   Here is a short 5 point litmus test to determine if that special person in your life, though in debt, may be a keeper.

You should date someone with debt if he / she:

1. has identified and accepted what got them into debt

You can’t fix what you don’t know is broken. They must have some self-awareness of their own role in causing their debt and are accepting the consequences.  They have learned their lesson.

2. has no gambling, shopping, or other money related addictions

These behaviors may not currently be a source of debt, but can easily become so. If these addictions are a source of the debt, you may be better off not dating this person. Think about this very carefully as oftentimes addictions are a form of mental illness that will at some point require the intervention of a mental health professional to address.

3. has taken the time to learn about personal finance

They have read about personal finance and can talk about opportunity cost, budgets, and interest. This shows that they have taken the time to educate themselves about how money works. It is important that she/he is doing this on his/her own, and not because you are forcing them.

4. is taking active and strong measures to eliminate debt

Is this guy working two or three  jobs to kill this debt?  Is this girl successfully avoiding taking on any new debt? Is he living within or even below his means to make it happen? Don’t let someone sweet talk you into giving them ‘time to figure out what to do’. Remember, trust actions not words.

5. has a plan about the future beyond debt payoff

Once he has paid off all his debts does he have financial plans beyond the short term? Is she making 401k contributions? Will he build up an emergency fund? Does she have long term financial goals that match yours?

That’s my 5 point litmus test for debt and dating.

Remember, it’s not only about how much debt someone has. Action is also an important factor in deciding whether to continue dating someone. It is just as important to look at what they are doing about that debt right now.

Someone may have no debt at all but live pay check to paycheck and have little understanding of, or interest in personal finance. They will likely continue that pattern and have a precarious financial future. However, someone else who has $75,000 in debt may be the one who has had a serious wake up call and is now intense about paying off debts and investing.

So, don’t be quite so fast to avoid dating someone with debt. Take a little time to see who that person is financially by watching their actions. There may be hope for love.

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

[Photo Credit: Eric Mary]