He or she may be your perfect Valentine -- the person who makes you laugh, makes your heart beat faster and who gives you chills just by holding your hand. But if your sweetheart can't come clean with a few pivotal numbers, you might want to think twice about the relationship -- especially if you're considering tying the knot.
|More from CBS MoneyWatch.com : |
• 10 Ways to Stop Fighting About Money
$254,000 ... For Your Manicure?
• 6 Things to Never Post on Facebook
Money woes and financial infidelity are a key component in the majority of romantic splits, experts contend. A few key numbers can tell you whether you're fiscally compatible or headed for the economic shoals.
Credit Score: It's a three-digit figure that typically ranges from 500 to 850, the higher the better. High scores mean you've been responsible with loans and are likely to get the best rates when you borrow in the future. That will be important if you want to buy houses and cars together some day.
If your Valentine has a score of 700 or more, they're golden, says Joseph J. Montanaro, financial planner with USAA Group. It's not necessarily a deal-breaker if the score is lower. Some young people have low scores because they have no credit, rather than bad credit. But you ought to ask more questions to ferret out the issue.
Risk Quotient: Behavioral psychologists tell us that we all have money personalities that direct our spending, saving and investing patterns, leading us to either stash cash in a mattress, gamble it all on the spin of a Roulette wheel, or, ideally, do something in between. It's okay if you're a financial granny and he's a gunslinger, as long as you know where your differences lie and can find ways to work out budgetary and investing compromises that keep you both happy and sane.
How do you know your money personality? Rutgers University researchers developed a nifty little risk quiz. You can do the his and hers versions. (Okay, it's the same quiz. But do the quiz separately so you can see if you're economic twins or opposites.)
Net Worth: This is simply the value of everything you own, minus what you owe. If you're starting out and this number is positive, congratulations -- even if your net worth is only a dollar. A significantly negative number should make you wary. Again, it's not a deal-breaker on its own. But when your net worth is negative, you've got to dig yourself out of a hole before you can start on a road to wealth. That makes for a bumpier journey.
Savings Rate: That last figure might have depressed you, but a lot of people have student debt. You don't necessarily dump someone for borrowing to get a better education. But you should consider what they're doing to dig themselves out. Your sweetie's savings rate can serve as the canary in the coal mine.
Is he or she saving prodigiously to pay off debts and build up long-term equity in a retirement account? Montanaro says young people should be socking away at least 15% of what they earn. (Though, initially at least some of this could be dedicated to paying down debts rather than building up savings accounts.) But if he or she is spending faster than saving/repaying, this canary's a goner.
You can expect big trouble if you wed. This is the type of person likely to have secret accounts and hide purchases -- just so you won't get angry, they'll confess later. The time to learn that your spouse is a spending nightmare is before those debts are joint obligations.
Emergency Money: A lot of people talk about having emergency savings but few people do, says Montanaro. If you're sweetheart is young and already has started an emergency fund, that's a great sign. If he or she has between three and six months of living expenses saved, this Valentine is smelling like roses.