Financial Red Flags in Relationships: What to Look Out For and How to Handle Them

Financial Red Flags in Relationships: What to Look Out For and How to Handle Them

When we think about compatibility in a relationship, finances might not be the first thing that comes to mind. However, financial habits can reveal a lot about someone’s values, discipline, and trustworthiness. Ignoring financial red flags early on in relationships could lead to stress, debt, or even a future financial crisis.

You may be surprised to learn that an online couples counsellor like me gets lots of inquiries from folks asking for help with money problems. My guess is it’s the 2nd or 3rd most common topic couples want to discuss. Financial red flags in relationships are a very big deal, and the longer you ignore them the more they pile up.

So, what are the main financial warning signs to look for, and how should you respond if you encounter them?

Inspired by some of the advice from Scott Pape, let’s explore these red flags and how to address them.

Hang on. Who is Scott Pape and what does he have to do with financial red flags in relationships?

If you’re Australian you’ll know who he is (it’s impossible not to). But if you’re not, Scott Pape is a financial advisor who wrote a book called ‘The Barefoot Investor‘. It’s sold umpteen million couples and I personally know many people it has helped. He provides down-to-earth financial advice and simple systems to help individuals, couples and families manage their finances (no complicated budgeting).

He’s a bit folksy and blokey, but highly ethical. He genuinely enjoys teaching people how to take control of their money. His approach is extremely helpful and effective.

I don’t agree with everything Pape has written. He himself states that his advice is financially conservative, so that won’t gel with folks who live especially creative or adventurous lives. If you’re childfree you’ll want to look beyond his books (after you’ve set up your buckets and paid off debts). And he advocates for all money in a coupled relationship to be shared- which I firmly disagree. Women (and other potentially vulnerable folk) should ALWAYS have their own money (for so many reasons that you can probably guess).

But he’s a wholesome dude. He stands up to the banks and he speaks out about the problems in the system. He’s a fighter. He’s helped thousands of people get out of debt, and helped even more successfully manage their money with simple systems that last a lifetime.

And he’s probably saved hundreds of marriages (or given people implicit permission to leave someone who is financially unstable and refuses to get help). So read on if any of this is clicking with you.

BTW: I am not being paid to discuss his book and methods, I just think they provide excellent insight into financial red flags in relationships, and addressing money problems.

1. Reluctance to Discuss Finances

Why it’s a red flag: Communication is the backbone of any relationship, and finances are no exception. According to Scott Pape, open discussions about money should happen fairly early in a relationship. If your partner avoids conversations about finances or becomes defensive when the topic arises, it may indicate deeper issues like financial insecurity, hidden debt, or it may just be a lack of financial literacy. You won’t know until you ask.

What to do: Approach the topic gently and at an appropriate time. Frame it as a way for both of you to build a stable future together. Consider sharing your own financial goals and ask if they have any goals they’d like to work toward.

If they’re still hesitant, you could even suggest speaking with a financial advisor together to create a plan that feels collaborative rather than confrontational. That might sound weird if it’s pretty early on, but it depends on how old you are and what your own money goals are. If this is a serious relationship with legs then it’s good to be able to at least talk about money in a mature way.

2. Excessive Debt with No Plan to Manage It

Why it’s a red flag: Debt can get on top of people and they can feel deep shame around it, choosing to ignore it (and make it worse). So it’s hard to talk about, for sure, and may feel invasive to bring up. However you can’t plan a future with someone who has no intention of dealing with debt or piling up more, so it’s not a ‘private’ topic.

Debt itself isn’t necessarily a problem—many people have student loans, car loans, or credit cards. However, excessive debt without a strategy to pay it down can be a sign of poor financial management.

What to do: If you’re concerned about your partner’s debt, it’s time to have an honest conversation about how they’re managing it. Be supportive, and avoid sounding judgmental. Ask about their long-term plans for repayment, and consider sharing any strategies that have worked for you.

If the debt is substantial, recommend working with a debt counsellor or creating a budget that prioritises paying down high-interest balances. In Australia you can call the National Debt Helpline FOR FREE: 1800 007 007. Find out what your rights are before the banks get a hold of you to fork out even more money for services you don’t need.

The truth it, no one teaches us how to be good with money!

As children and young people, we learn by observing our parents (and usually at least one of them isn’t great with finances). If you grew up in the 80’s like me you probably had a Dollarmite bank account where schools were incentivised to promote a certain Big 4 bank to children. I think one of the mascots was into credit cards. Yep. Future training for 5 year olds. Not to mention that we’re constantly receiving messages from, you know, capitalism to ‘spend spend spend’. Like spending will make us happy.

So anyways, debt is nothing to be ashamed of.

But if your partner absolutely refuses to talk about it or deal with it, then you may have to make a very difficult decision. Can you really afford to stay with someone who has piles of debt and no interest in getting rid of it?

3. Irregular Income or Financial Instability

Why it’s a red flag: These days many people work freelance or in the gig economy. Freelance work means variable income, frequent job changes or income instability. That’s fine if your partner is good at managing their money, but it may signal difficulty with financial planning or commitment. I’m a big fan of following an unconventional career path, but there’s a difference between that and frequent periods of financial instability without any way of handling the ups and downs.

What to do: Discuss their approach to managing income fluctuations. You may be pleasantly surprised to discover how your person handles the variables. I know a lot of musicians and artists who do very well on a low and unstable income because they know how to budget. Unfortunately I also know some who are terrible with it, blowing money when they’re flush and struggling when there’s no cash flow. Start by talking about it and exchanging ideas on how to hang onto that ‘gig’ money so it’s still there when they’re not working.

You can also discuss creating an emergency fund together, a financial cushion that can help during lean times. The Barefoot Investor recommends having a buffer in place for at least three to six months of expenses. If your partner hasn’t considered an emergency fund, it’s a good opportunity to work together toward financial security.

Again, if your partner considers these kinds of conversations to be invasive or they don’t want to share, then you may need to consider how long you’re willing to put up with that for. It’s understandable that it may take some time to fit a conversation like the ‘monthly Barefoot date nights‘ into your routine, but however you do it, it’s crucial to be able to talk about money in a loving relationship.

4. Overspending and Poor Budgeting Habits

Why it’s a red flag: If your partner frequently lives beyond their means or has trouble sticking to a budget, it can become a serious problem if you’re planning a life together. Spending recklessly without saving can lead to debt, poor credit, and a lack of financial security. Overspending may also reflect impulsive decision-making, which could affect other aspects of the relationship.

What to do: Instead of criticising their spending, talk about budgeting as a way to achieve shared goals. Use positive reinforcement by discussing something exciting you both want to save for, like a vacation or a future home. You could suggest tools or apps that make budgeting easier or propose Barefoot’s “date night” where you both review finances and celebrate small wins, like hitting a savings target.

However if your person continually defends their overspending and refuses to address it, then you might want to consider moving on. I can’t even begin to explain how stressful it is to date an overspender, let alone share your life with one. No matter how much money they earn (or you earn) it always disappears.

Someone who is unapologetic about living beyond their means will not be concerned about borrowing from your (shared) mortgage for whatever their latest ‘need’ is, buying expensive items like cars, designers clothes, holidays or boats on credit, and digging you both into a financial hole that gets harder to climb out of.

5. Secretive or Dishonest Behaviour About Money

Ok, this is a little tricky, and where Barefoot and I kinda disagree. While I do think financial transparency is somewhat important in good and healthy relationships, I’ve met too many people who trusted someone they shouldn’t have and ended up being controlled financially. They were left with nothing at the end. Also, I know there are lots of you out there who would like to leave a bad or unsafe relationship, but can’t because of financial reasons. If someone is tracking every penny you earn then that’s not a good thing.

So it is my opinion that there is a time and place for being secretive about money.

However there are limits.

Don’t read this and decide that you have to share every cent with your partner or demand they share every cent of theirs. Please use common sense when considering this financial red flag in relationships. If you’re not sure about your partner’s behaviour, ask a sensible friend or even a therapist.

Why secretive or dishonest behaviour about money is a red flag: If your partner is hiding purchases, has secret accounts, or is not forthcoming about their income or expenses, it could indicate deeper trust issues. Financial infidelity is a form of dishonesty, and studies show it can be as damaging as other forms of betrayal.

What to do: Approach this carefully, as accusations can lead to defensiveness. Instead, ask open-ended questions about financial goals and values. If you suspect financial infidelity, try to address it calmly and constructively.

One option is to establish a “financial honesty policy” where you both agree to be transparent about expenses and savings goals. As I criticised earlier, Barefoot even recommends both your incomes go into one account. Though I understand the ease, it’s not smart or necessary for the aforementioned reasons.

But a good option is to keep your money separate and then have a shared bank account which you both contribute to, based on your incomes (not the ‘same’ amount necessarily. That’s silly if one of you earns a lot more and this approach stops you from reaching your goals together). If you really can’t trust your partner to tell you what they earn then you’re in trouble anyway.

How to Move Forward From Financial Red Flags in Relationships

If you’ve noticed any of these red flags, remember that open communication is key. According to Scott Pape, couples should aim to be “financial teammates,” not adversaries. Having regular, honest conversations about money can prevent many of these issues from escalating.

Consider these additional tips for managing money problems in your relationship:

Images: Main image David Gomes on Pexels

2) Ketut Subiyanto on Pexels

3) Dollarmites on Reddit

4) Agustina Tolosa on Pexels