QUESTION: Luke in Idaho says his girlfriend wants to keep their credit cards and pay off the balances. He doesn't feel that's a wise decision, and wants to know how to get her on board with Dave's principles. Dave advises him why he should be careful combining finances with a girlfriend.
ANSWER: Be very careful with that. I would not recommend combining money with someone you're not married to because you'll get yourself in trouble. Plus, you're not really in a position when you are unmarried to start dictating the way someone else handles money. All you can do is influence it and say that this is a part of your relationship. Part of the relationship going forward is that you must be in agreement on these subjects.
I think what happens with the mechanics of some of these things is that she wants to continue to fool around with the credit cards and you don't. She says that she pays them off every month, so what's does it matter? If that's the case, what's wrong with using a debit card?
If she's concerned about keeping the credit card around to establish a credit score so you can buy a house, I would kindly say that she doesn't know what she's talking about. You can get a mortgage without a credit score. You can't get one with a poor credit score, so you really have two options.
One is to borrow a bunch of money and continue to pay interest and mess around with debt in order to have this false measure of wealth, which is a credit score. Or you can say that you're not worried about your credit score because you won't use it when you get a mortgage anyway, so you close all your debt accounts. Pretty quickly, you'll have no credit score, which qualifies you for a mortgage, by the way.
Some mortgage companies don't know how to write that mortgage, but lots of them do. It's called manual underwriting. You have to be steady on your job and have a reasonable down payment and those kinds of things, but you can qualify for a mortgage.
I don't think that's the question, though. I think the question is that she wants to do what she wants to do. You guys are not getting on the same page with that and that's not a good indication on where you relationship is. I think you guys really need to sit down and ask why it is that one of you wants to get rid of credit cards and why is it that the other one wants to keep them.
The only "why" she's given so far is not true. If you guys play footsy with debt for your entire life, you'll stay broke and middle class your entire life. You've got no way to build substantial wealth when you give it all to the bank. Tell her you don't want to be playing in these things and you want to get out of debt. That's a big deal to you.
Defining the financial principles that a future marriage will be based on is part of the dating process. That is a deal-breaker if you're smart and can't get on the same page, because if you can't get on the same page when you are dating, you sure can't get on the same page when you are married.
If the number one cause of divorce is money fights and you can't get on the same page when you are dating, then you are going to have nothing but a potential for divorce. It's the number-one reason people divorce, why marriages break up. You guys have got to force through this issue and come to some common ground to go forward.
It's like saying you want to have kids or don't want to have kids. This is not a marriage made in heaven. Somebody is going to be unhappy; the one who has kids or the one who doesn't have kids. Somebody is going to be unhappy. There's going to be conflict. These are the kinds of things you find out when you are dating before you're engaged, and it's why you don't combine your finances until you are married.