LYNNETTE KHALFANI-COX: Hi I'm Lynette Khalfani-Cox. I own a financial education company, and I teach people about personal finances.
LAURA STASSI: I'm assuming for people 50 and older, this is a significant topic maybe -- and maybe more significant than when we were younger,
LYNNETTE: I would say that yes, the weight does grow in terms of the significance of financial standing. And that's because of a whole host of things. Longevity, obviously, is going to be shortened or diminished as we get older. And so if you're counting on or needing a partner for financial, emotional, and other forms of support as you get older, then of course, you want to pick the strongest possible mate. And I don't know why someone in say their late 60s, or maybe even 70s, would not consider whether or not a major red flag financially could potentially set them back.
So again, a lack of savings in your 50s may not be such a deal breaker. But if you're in your 70s, and you have a complete lack of savings, then what does that mean for the other party, if they need long-term care; if they need, you know, critical nursing support, other things that are going to be financially taxing, where that person doesn't have the assets to support the care that they're going to need. And then it's going to fall on the partner to be that, you know, source of financial aid and support.
LAURA: If I'm not on equal standing with my partner, can we be happy?
LYNNETTE: You can absolutely still find love and happiness, even with your financial opposite. Now, I do think it's important that listeners know as well that you might have a long-term committed relationship and not be married, and that can work out just fine. When it comes to marriage, however, that's obviously a different arrangement from a legal standpoint and otherwise, and there is some research around financial opposites in certain ways.
One study looked at people with disparate credit scores -- the person who had say, a 760 or better credit score, who had a very strong credit profile, which meant that he or she was managing their credit and debts wisely, versus people who had poor credit scores, 620 and under. And those with big gaps were far more likely to divorce than others who had the same credit standing and have same credit score. So that's telling me also, the credit score is just kind of a one snapshot. It's just a look at sort of how well you've handled various obligations.
I do think that it's okay to be very direct, especially when you both know that, we are exclusive; we want to be in a committed relationship, and we see a path forward for ourselves. Once you're at that point, I feel everything should be on the table. But you start the conversation by saying, “Listen, you know, I feel like we're really getting serious here. And because of that, I want to talk to you about a future together. And that includes our financial future. So I wanted to lay out for you some of what my finances look like. And I want to … I hope we can have a conversation about yours as well, and to think about the ways in which we're going to move forward” -- if that's what we both want to do.
So if someone has encountered what I call the dreaded D’s: downsizing; divorce; a death in the family, of perhaps the main breadwinner or partner; disability; or disease -- anytime one of those five dreaded D’s happens to you, it can totally throw your finances out of whack. So if they did go through a divorce, let's say, or if they were downsized, you know several years ago but now they've recovered or they have a job or they're sort of out of the financial problem where maybe they were paying large amounts of alimony to an ex or paying child support or paying for college and now that's, you know, mercifully over or something like that, if there's been a resolution to the past problem, all green flags for me. That's a go.
LAURA: I would love for you to go on record and say -- if this is true -- that it is okay to not want to bail somebody out or help somebody out; it's okay if you decide, you know what? I like you, you're a nice person, but I'm not going to give you money so that we can go to blah, or so that you can fix Z, or whatever.
LYNNETTE : I absolutely think that it's perfectly fine and acceptable and, in fact, in your best interest and that person's best interest for you to not financially bail out people, to not become what I call a human ATM machine -- and to not ultimately fall into a relationship where there is financial abuse. And let me define what that is. So financial abuse happens anytime someone that we know, trust or love takes economic advantage of us. And it's not always intentional by any stretch of the imagination. But it absolutely can happen among partners and love interests; it can happen among siblings, among parents and children. And so sometimes people can push your buttons emotionally to get the financial outcome that they want. But it's not incumbent upon you, you're not required to give anybody money to co-sign for any loans, to make any financial transactions that would potentially set you back financially or that would be financially enabling for them. Because that's really not helping them to be a full-grown, mature adult; to stand on their own two feet. Even though it may seem like a very difficult situation that they're in and it may be difficult to say no, I believe it's absolutely in your best interest and that person's best interests in 99 out of 100 cases, to do just that and to say no.
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