Love Bites: Protecting Yourself From Sexually Transmitted Debt

There’s something about vampires. Just ask the eternally beautiful teenagers of the Twilight saga – nothing says ‘romance’ like a mysterious stranger who longs to nibble on your neck. The real world may not have an Edward Cullen, but it’s got another kind of vampire that can be just as seductive and dangerous – the financial vampire. These predators won’t be eyeing your jugular, but if you’re not careful they’ll infect you with a nasty case of Sexually Transmitted Debt.

You catch Sexually Transmitted Debt by taking responsibility for a loved one’s debts – and footing the bill when they default. It’s a serious condition that can damage your credit reference, bring debt collectors to your door and even bankrupt you. And it’s more common than you might think. A report by the Law Reform Commission NSW (Australia) revealed that 83 per cent of people who guarantee loans are in close personal relationships with the borrower, and 49 per cent don’t believe they could repay the loan if required, so it’s easy to see how helping out a loved one could have you haemorrhaging money.

There are three main ways you might contract Sexually Transmitted Debt:

• co-borrowing with your partner. You are both responsible for repaying the loan. If your partner doesn’t keep up the payments you could become liable for the entire amount;

• becoming a guarantor for a loan. This is guaranteeing your partner’s ability to repay it, and if they can’t or won’t, you’ll have to;

• taking responsibility for the utilities. When the bills arrive they’ll have your name on them – even though you’re both using the services.

Women are more likely to suffer from this ‘STD’ than men – a study by Veda Advantage found that 58 per cent of utility bills were in women’s names so it seems that they’re more than paying their share. Men are also more likely to be the cause of debt: over a five year period they accounted for 55 per cent of defaults. A creditor can sue either co-borrower if they stop receiving payments on a loan, but they’ll probably go after the most reliable party and statistically, that’s often a woman. That said, there are female vampires out there, so it’s not safe to assume you’re immune because you’re a man.

So how do you ward off financial vampires? Well, like the bloodsucking kind that can’t come into your home uninvited, financial vampires can’t take your money unless you let them. The simplest way to protect yourself is to avoid giving your partner access to your funds. Don’t put their name on your credit card or help them borrow money. If you are considering co-borrowing or guaranteeing a loan, read the contracts carefully and make sure you get independent legal advice before you sign anything. A signature on a financial document is a legally binding agreement, so if you couldn’t repay the entire amount if you had to, don’t sign. But Sexually Transmitted Debt isn’t always passed on intentionally – sometimes your partner may need to stop their repayments because they lose their job but you’ll still be liable, so think twice about taking on financial responsibilities even if you trust your partner completely.

But what if you’ve already been bitten? Finding out that you have an unexpected debt can be a shock, but there are things you can do. Sometimes a court will overturn your liability if you can prove that you didn’t understand what you were signing, but the unfortunate truth is that in 90 per cent of cases you just have to pay up. In that case, contact your creditors and explain the situation – they might help you arrange a payment plan that won’t send your budget into the red. If you need more advice about how to do this, take a look at Your Family Your Money’s articles on debt management for more detailed strategies for eliminating debt and dealing with creditors.

Looking at your partner as a potential financial predator isn’t easy. And the good thing is they usually won’t be. But if your partner cares about you, they’ll understand it’s important to protect your finances – and they’ll want to protect theirs, too! Avoiding taking on unnecessary liabilities can save you a lot of heartache and keep a good relationship strong … and if you are seeing a financial vampire, you’ll be able to keep their fangs out of your bank account.

Women and Money: Do it together for a better relationship

Pssst! Are you interested in spicing up your relationship? Studies have shown that whether you’re newly in love or long-time lovebirds, doing things together can strengthen your relationship, be enjoyable, fulfilling and even good for you! Joint research done by the University of Technology, Sydney, and the University of Bristol revealed that a strong relationship does wonders for your quality of life – even more than being filthy rich will! But if you’re thinking that throwing all your savings away will be the key to happiness, think again, because working together on your financial goals is one of the most important aspects of maintaining a strong relationship. In fact, a recent national survey showed that 47 per cent of people thought that having enough money was more important to the success of their relationship than having enough sex – so while financial intimacy isn’t foremost in the minds of most Australian couples, it’s sure running a hot second!

Many couples have a dedicated ‘date’ night to help keep the romance alive, spending a lot of time and money ensuring that they have a ‘perfect’ night. But what about making a regular date with your partner to start improving your mutual money management so you’re able to enjoy a perfect life? Scheduling a regular time and place to discuss your finances and learn more together is an ideal way to start improving your financial relationship. As in all areas of your love life, communication is the key to success when managing money, because when it comes to financial personalities it seems that opposites really do attract – a recent American study uncovered the fact that ‘savers’ are more likely to be attracted to ‘spenders’ and vice versa and if your soul mate is your polar opposite from a financial perspective you’re going to need to be able to talk to each other to make the relationship work! The same research showed that while these relationships are likely to be more tumultuous they can also be more financially beneficial – two heads are better than one and financially opposite partners can cancel out each other’s weaknesses and create more savings and less debt, if they can work together.

But where do you start? If you’re a beginner the best place to start is by learning the language and The Financial Planning Association of Australia’s website (www.fpa.asn.au) has a great glossary to get you started. Once you’ve mastered some of the basic terms it’s time to stay on top of current affairs by reading financial publications like The Australian Financial Review, Smart Investor and Money and checking out articles and information from reputable financial websites such as Canstar Cannex (www.canstar.com.au) and the Australian Securities Exchange (www.asx.com.au). Oh, and you’ll also find some great articles by heading to the homepage of www.yourfamilyyourmoney.com or www.women-and-money.net!

Finally, regardless of whether you want to improve your financial relationship or your romantic one you have to make a commitment to making it work. Make time every month to discuss your financial progress – and don’t make it a chore. Talking about money can be stressful, especially if you and your partner both have strong opinions about what you should do with it. Most people still think of money as a taboo topic, so if you feel a bit awkward about discussing it, that’s okay. Work out the best way to make working on your finances an enjoyable experience for you and your partner and make a date of it. Try going for a walk or having a nice dinner together to help make the occasion special and if you have kids, include them in the conversation as well because your kids are going to learn most of their money habits from you and we’re confident that you want them to have the best possible financial start in life.

There’s no denying it: building a satisfying relationship takes work. If your love life is getting a little stale, think about working together to improve your financial position – with a bit of effort and commitment you’ll be able to give your relationship the financial security it needs, and develop the teamwork and communication it deserves. And when you’ve got that in order, you’ll be more inclined to devote time to the thing the other half of the population thinks is most important in a relationship!