Is It Smart to Lend Money in a Relationship?

One of the most difficult financial situations to deal with is when one person in the relationship is in a much stronger financial position than the other. In this article, I am going to review when it’s smart to lend money to your significant other and when it could be a disaster.

Is It Smart to Lend Money in a Relationship?

The primary reason people hide their money problems is that they are ashamed. They are embarrassed that they are not doing as well as they think they should be.

Why We Hide Our Money Problems

What to Do When You Discover Your Partner Is in Debt?

Applying for a mortgage requires each partner to reveal the details of their finances. You can’t get a mortgage without telling your lender what other debts you currently have.

We are four years into that agreement and to be honest our financial position has grown so much stronger, that we both admit it’s almost silly to continue with this because the $166 is not making a material difference in either of our finances  (we are fortunate in that regard).

In the End, We Decided It Made Sense for Us

When Lending Money to Your Spouse Is Smart

It’s critical to understand three things about your significant other’s relationship with money before you consider lending them money.

If your partner is in deep credit card debt, spends more money than they make, fails to pay their bills on time, and has no financial goals, you may want to avoid lending them money.

When Lending Money to Your Spouse Can Be a Disaster

Final Thoughts:  Is It Smart to Lend Money in a Relationship?

Managing finances inside a relationship is hard. It’s particularly hard when each person in the relationship is not on even footing from a financial perspective.

- Can this person pay me back in a reasonable time frame? - Do I trust this person with 100% confidence to pay me back?

While there is no hard and fast rule on lending money to the other person in a relationship, it’s important to consider a few simple questions.