Elenor Roosevelt was once quoted as saying “Learn from the mistakes of others. You can’t live long enough to make them all yourself.”

Being a financial advisor, I have seen my fair share of financial mistakes others have made. What is even more heartbreaking is when these mistakes are not made out of greed or irresponsibility but instead out of love. Today, I thought I would share with you a few of them in the hopes that as the former first lady said you can learn from someone else’s mistakes instead of having to learn from your own.

Common mistake #1. Cosigning or lending money to family and friends. At first, this may sound like an uncaring or selfish attitude to have. After all, everybody needs help from time to time. Aren’t those closest to us the ones we should help first? My answer is of course. If you have the financial means to simply give them money to help them out. However, you should never, I repeat never enter into a debt relationship with someone you care about.

I have personally witnessed relationships torn apart over these types of arrangements. Sometimes its because the person doing the borrowing defaults leaving the lender feeling betrayed. Other times it’s the borrower feeling bitter and oppressed as they struggle to make payments to someone who is supposed to care about them. Either way the relationship is forever damaged.

Common Mistake #2 Co-mingling finances with someone you are not legally married to. In today’s modern society it is extremely common for partners to live together and “play house” long before they are married. While study’s show this lowers the likelihood of having a successful marriage, comingling your money as part of that arrangement can make the decision even worse. https://ifstudies.org/ifs-admin/resources/reports/cohabitationreportapr2023-final.pdf

On the surface setting up joint bank accounts or buying a house together may seem like the financially responsible thing to do. However, without the legal safeguards that come with a state recognized marital relationship the financial dangers are immense. Courts simply do not have the bandwidth to distribute shared property fairly if no legally binding contract exists. Because of this, a financial mess is often created if the relationship dissolves.

Common Mistake #3 Keeping your spouse in the dark about the finances. I have seen too many marriages where one spouse (usually the man) handles the money, and the other has no involvement whatsoever. Often, the motivation for this by the money manager is altruistic. They simply don’t want to burden their spouse with the stress involved in overseeing the household finances. However, this strategy is a recipe for disaster for so many reasons. First and foremost, any time there is a lack of good communication between couples the potential of creating misunderstandings is increased.

If the couple goes through financial challenges the one in charge of the finances may be tempted to hide these from their spouse out of embarrassment or pride. When eventually these issues come to light it can create distrust from the spouse not told the truth from the start, or resentment from the one who was doing all the work, when they inevitably get blamed for the financial struggles they face.

With money problems being the biggest cause of divorce in America it is of paramount importance that spouses work together on their finances. Not only because it will usually produce better financial results, but because it will produce a stronger marriage too.

Being a former teacher, part of what I feel called to do is help people know what to do, and what not to do with money. This column each week gives me an excellent way to share my insights with those of you in the community. But its not the only way I do this. In fact, starting in late January I will be teaching a 6-week workshop on personal finance 100% free of charge to anyone interested in learning more about being a good steward of their money. For more information just go to our website www.stewcap.com

If you’re tired of not getting ahead with your money, or just feel like you are ignorant on the subject. I would invite you to join me for this workshop and start the new year off right.

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)