Personal Finance: Valentine’s Day: Hearts, flowers, chocolates ... credit scores?
02/09/2014 12:00 AM
02/08/2014 5:39 PM
Valentine’s Day is all about hearts, flowers, chocolate, maybe some bling. What it’s typically not about: credit cards, credit scores and anything as crass as cash.
Except lately. Whether it’s because recession-rattled consumers are still focused on their bottom lines or whether personal finance experts are trying to capitalize on Valentine-y sentiments, there’s been lots of attention recently on romance and money.
“Love and money cannot be separated,” said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in Washington, D.C . Because money is “intertwined with just about everything we do, it can impact a relationship – even before it gets off the ground.”
With Feb. 14 just days away, we thought it’d be romantically responsible to share a few gems:
Too many couples never talk seriously about their finances. Financial experts say that’s a major mistake, whether it’s a new romance or a years-long marriage.
“It really is an act of love to share your finances with your significant other,” said NFCC’s Cunningham. “The more you’re on the same page (financially), the less trouble you’ll have down the road.”
Without a clear financial picture, the first time you go together to rent an apartment, buy a car or take out a home loan, it could be potentially embarrassing – and costly. If one partner has an iffy credit history, it likely will mean much higher interest rates or even having a loan denied.
Schedule a time for a serious talk in a casual setting, suggests Cunningham.
For new couples, it could be looking together at income (yes, bring out the pay stubs, she says), existing debt (credit cards, car loans, etc.), investments and even credit reports. Being honest about your financial past and current situation can put a relationship on a healthy financial footing.
For established couples, it might be having a talk about retirement readiness, how to share financial tasks more equally, understanding the family investments or checking beneficiaries on life insurance and bank accounts. Or review your goals for some of life’s big-ticket items, like a new house, kids’ college or special vacation.
For tips on what questions to ask and how to initiate a money talk with your romantic partner, check out sites as diverse as investing’s Fidelity.com, dating’s eHarmony.com and lifestyle’s RealSimple.com.
Avoid ‘financial infidelity’
Money squabbles are often cited as a major cause of marital tension and divorce.
Last week, in its annual Couples Retirement Study, Boston-based Fidelity Investments said 51 percent of U.S. couples admit that they “frequently or occasionally” fight about money.
Especially for couples just starting out, being reluctant to share your financial history can be a sign of potential trouble.
“It’s a form of financial infidelity to hide negative financial information from someone you’re considering having a serious relationship with,” said Cunningham. “If someone is unwilling, it sends a red flag.”
Insure the bling
Valentine’s Day is the second most popular day for marriage proposals, according to a survey last December. (The most popular? Christmas Eve.)
For those putting a ring on it, there’s one aspect that’s frequently forgotten: insurance. An engagement and wedding ring are often the first sizable investment a couple makes together. But you don’t want to leave it uninsured in case it’s lost, stolen or damaged. (And the same goes for fine jewelry, a perennially popular Valentine’s Day gift.)
“Jewelry is one of the most common insurance claims that pop up,” said Tully Lehman, spokesman for the Insurance Information Institute in Walnut Creek.
Be prepared against loss: Keep your store receipt showing what you paid. If it’s an heirloom piece, have it appraised. Keep the paperwork in an insurance file, so you can easily file a claim if the ring is chipped, lost or stolen.
If you’re a renter, look into low-cost renters’ insurance, which covers the contents of your apartment or rental property.
Be sure to check your insurance policy limits. Most standard homeowners’ policies will cover against theft for individual items up to $1,000 or $2,000. If your ring or other pieces are worth more, you’ll need to look at purchasing a separate “endorsement,” sort of a mini-policy that covers higher-priced pieces or can protect against chipped or lost stones. A “floater” premium on your existing policy will protect you beyond theft, such as when you leave jewelry in a hotel room or accidentally drop an earring down the sink.
“You may already have enough insurance coverage and don’t know it. But it always pays to check,” said Lehman.
Flirting via credit card?
Pulling out your credit card on a first date could affect your love life, says NerdWallet, a San Francisco-based personal finance website.
While flashing an American Express card might be expected to impress, it’s not always so, according to NerdWallet’s recent online survey of 500 never-married adults, ages 25-59.
Given a list of 13 credit cards, respondents were asked which they’d find most “impressive” when a date pulled it out to pay for dinner. Not surprisingly, an American Express Platinum and a Visa Black card ranked second and third, scoring roughly 28 percent each. But the most popular choice? A “local credit union” credit card, which was favored by 39 percent.
“That surprised us,“ said Jelena Ewart, a NerdWallet credit/debit card analyst. While the flashier cards might mean a date is a big-spending, high-income, globe-trotting professional, that’s not always appealing. While admittedly a “khaki-pants” kind of choice, a local credit union card might indicate your date has a “well-researched, responsible, well-thought-out” approach to money, Ewart said.
Given the findings, “We were pleasantly surprised that people were in touch with financial responsibility,” said Ewart. “It’s quite heartwarming.”
Not so charming on that first date is having your credit card declined by a restaurant or merchant. Half of all singles – and 63 percent of women – said they are “somewhat” or “much less likely” to go out again with someone whose credit card is rejected. No explanation needed.
Is a credit score sexy?
In some cases, especially among women, it appears so.
In NerdWallet’s survey, 40 percent of singles say they are “somewhat more likely” or “much more likely” to date someone with excellent credit, defined as a FICO score of 750 or above. And single women apparently value a high score more than men, roughly 52 percent to 29 percent. The survey also found that 9 percent of 30-to-44-year-olds – the highest of any age group – admitted to “snooping” into their dating partner’s credit history.
There’s actually an online dating site, CreditScoreDating.com, that lets singles plug in their credit score to find a compatible match. Finding someone with a credit score above 750 means “Take him/her home to mom,” according to the site.
The emphasis on creditworthiness is especially strong among 20-somethings, according to Ewart. “This age group came of age during the recession,” she says. “They were coming out of college or getting jobs at a time when creditworthiness was really important. Their older peers may have entered adulthood when it didn’t matter as much.”
Love is cheap
Perhaps the easiest piece of money-and-Valentine’s advice: It doesn’t have to cost a fortune to be heartfelt.
For instance, want to send your sweetheart a message that’s a mashup of cash ’n’ cupid? TheMintGrad.org, a financial literacy website aimed at 18-to-24-year-olds, offers a series of free Valentine’s e-cards to send your significant other. Dubbed “a financial twist on the traditional cheesy Valentine’s card, the e-cards bear such messages as: “Love makes the world go round, but money pays for the ride.” “Let’s spend more time and less money together.” “You had me at no debt.”
1. Tell your partner why you love him/her, in words or on paper.
2. Create a handmade card (or lots of little notes sprinkled throughout the day).
3. Make something (breakfast in bed, a CD of favorite tunes, a framed photo).
4. Make peace. (Resolve a nagging disagreement: Write down your promise, wrap it up, deliver with a flourish.)
5. Give your time. (Offer him/her a night out with friends, or time off from household chores, which you pick up in return.)
6. Surprise ’em. (Pick a new destination for a hike or drive; return to a favorite place.)
7. Just listen. (Give your partner your undivided attention and really listen.)
8. Create a memorable meal. (Whether it’s bundling up for a cold-weather picnic outdoors or a candlelight spread of hors d’oeuvres at home, simple can be sweet.)
Love is priceless.
About This BlogClaudia Buck is the Personal Finance columnist and business editor at The Sacramento Bee. She's worked at The Bee since 2005. Amid the financial turmoil of the recent recession, she became the personal finance writer, helping readers cope with some of the confusing, daunting and perplexing aspects of managing our financial lives. She serves on the journalism advisory board of her alma mater, Cal Poly State University, San Luis Obispo. Reach her at email@example.com or 916-321-1968. Twitter: @Claudia_Buck.
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