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Dear Penny: Is it too soon to ask my partner about his debt after 6 months?

Talking about money isn’t something most people look forward to in a relationship.
 
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Getty Images [ Getty Images ]
Published March 10, 2023

Dear Penny,

I would love to know when is the right time to discuss financial history/current financial status when in a relationship. I have been dating my current partner for six months and things are going great — all signs point to a future together.

But he has been married before and still owns a business with his ex-wife. The business has been up and down over the years, and I know they still owe a large sum to investors.

If we were to get married, I would want to know what kind of potential debt I would be incurring/liability I would be responsible for, especially relating to their business. I don’t have any current debt and am concerned about joining our finances. Is it too early to bring up the financial discussion?

-J.

Robin Hartill
Robin Hartill [ The Penny Hoarder ]

Dear J.,

If you see a future together, the right time to talk about money is now. That doesn’t mean you need to ask for audited financial statements. The goal is just to start a conversation.

You wouldn’t be responsible for your partner’s debt if you married. Both debt and assets acquired before marriage are considered separate. If the two of you married and then divorced, your partner would be liable for that debt.

Still, even though you wouldn’t be legally liable for the money your partner owes, there’s no getting around the fact that his debt will affect you if you build a life together.

If a significant chunk of his income is going toward repaying debt, you may need to shoulder a disproportionate share of the expenses. That may not be a big deal right now, given that the relationship is still fairly new. But when you’re not able to buy the house you want or go on your dream vacation because your partner’s income is eaten away by debt, that can become a source of contention.

That said, owing money to investors isn’t quite the same as being buried in credit card debt you can’t afford. If your partner’s business earns a healthy profit, it could be that his business debt is manageable. I’d care more about whether he’s actually earning money from the business than about how much debt he has. Owing a lot of money is one thing; throwing money into a black hole of a business that’s nowhere close to profitable is a much different story.

Talking about money isn’t something most people look forward to in a relationship. But fortunately, it sounds like your partner has opened up to you about the topic somewhat since you’re aware of his business debt.

I’m a fan of acknowledging the awkwardness before you have an uncomfortable conversation. You could try saying something like, “This is awkward, but the other day, you mentioned that you and your ex still owe a lot of money to investors. Can we talk more about that?”

You’re not trying to get a full accounting of his finances at this point. The goal is to get a general sense of where he’s at. He may be a bit embarrassed to talk about how much he owes, particularly if he knows you’re debt-free. If he hesitates at first, tell him it’s OK if he doesn’t want to have the discussion right at that moment.

But under no circumstances should you move in together or get engaged until you’ve both disclosed how much debt you have and how much each of you makes. Too often, people shy away from having these discussions upfront. Instead, they combine households and default to splitting the bills 50/50, even though that doesn’t match their circumstances.

It’s essential to have these conversations before you’re mutually responsible for bills. Once you and your partner know your respective situations, you can set goals together. For example, if the goal is for him to pay off his debt as quickly as possible, that will impact how much house you can afford if you move in together.

Since you’ve already invested six months in this relationship, I’d suggest having this conversation soon. If you find out information that’s a potential deal breaker — or if he refuses to discuss financial matters, which is in itself a red flag when you’re in a serious relationship — it’s better to have that information now versus a couple of years from now.

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Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.