Dear Debt Adviser,
How does one go about financial re-education? A dear friend is in over his head. He thinks American Express is
the answer to everything. His new laptop, Wii and digital camera are clear evidence of this.
He has had a suspended driver's license for two years because he cannot pay his parking tickets.
He works hard, is kind to his girlfriend (my sister) and a great guy all around. He is planning to marry my sister,
but I can't bear (and neither can she) to see his financial missteps become hers.
How do we help him learn to better manage his finances and credit?
You know, there are also great guys out there who pay their bills!
And furthermore, does your sister do the driving on their dates? Who puts gas in her car? And so on.
Is he getting a full scholarship while your sister gets an expensive education?
Enough of the fatherly concern -- love may be blind, but it doesn't have to be foolish.
You mentioned a plan for your sister to move from girlfriend to fiancee to wife. Because this is still in
the planning stages, it's only natural for the couple-to-be to have long conversations about their future together, shared
interests, goals and the like.
Having a solid financial future is a legitimate topic of discussion or negotiation in a relationship
heading for marriage.
For purposes of this column, I am going to assume you have his full cooperation and give you and my
readers some quick relational financial education basics.
For starters, your sister and her beau should get their credit reports and scores from all three
bureaus. They can do this at Fair Isaac's myFICO site or at the bureau
Web sites. They can also get their credit reports for free once a year through AnnualCreditReport.com. If a suspended license hasn't made an impression, maybe this will add some weight to the case for the need for
your sister's boyfriend to change behavior.
Second, the two of them should set some quiet time alone (no Wii or pizza at the same time) and go over
their results. An equal marriage partnership will be easier if they can agree to having comparable credit ratings before
moving to the next stage of bliss.
Poor credit can have implications for a marriage in the form of more expensive credit, fewer job opportunities,
fewer rental choices, higher insurance costs and many other negative factors.
Third, no change in the relationship's status should happen until your sister's boyfriend gets his license
back. His expectation that your sister will chauffeur him around is not only incredibly irresponsible, but also foreshadows
a lack of consideration for your sister.
Fourth, I want him to pay off his American Express card in full each month and start a savings plan so he
proves he has more discipline than I see in your letter. Your sister is right to be wary of his financial missteps becoming
hers. Marriage is difficult enough in good times. The current tightening credit environment and economy will penalize the
financially inept couple harshly.
Finally, whatever she does, don't let your sister co-sign for anything. In fact, if he asks, I think it's
time to tell him to walk. After all, he can't drive anymore, can he?
Preparing for life together in a serious way has to include planning for your financial needs. As a
pre-engagement present, I'm sending you a copy of the new second edition of my book "Credit Repair Kit for Dummies,"
which will be out in late July.
If your sister and her boyfriend read the book, it may help guide them to a much better understanding of
how credit works and the downside of not paying attention to it.
One last thought: In my experience, people who have agreed-upon goals and a plan to reach them are much
less likely to end up with debt problems and much more likely to live happily ever after.