Finance
Is your partner ambitious? 3 financial red flags in a relationship
00:00 Speaker A
Picking a partner is one of the most consequential decisions you can make in your financial future. But nearly a third of Americans are uncomfortable discussing money in their relationship, according to a recent survey from Talker Research. Joining me now to talk all things finances and relationships, we’ve got Patty Assay, a finance expert with more than 1 million followers on TikTok. She’s also the author of a new book, “Never Date a Broke Dude: The Financial Freedom Playbook.” Patty, great to have you here in studio.
00:28 Patty Assay
Thank you for having me.
00:30 Speaker A
Okay. So, as we think about this, I got to ask you, how do you define a broke dude? We should just get that out of the way.
00:36 Patty Assay
Yeah. I’m so glad you asked that, because being a broke dude has very little to do with your bank account. It’s someone who regardless of gender can’t match your ambition, drive, commitment, or work ethic, right? You want someone that matches your energy. You can’t be hustling, and the person sitting on the sofa, eating Cheetos. And I always say you don’t have to match me dollar for dollar, but you do have to match me hustle for hustle. So, that’s what’s important.
01:01 Speaker A
And so when it comes to relationship red flags, what should people be on the lookout for?
01:06 Patty Assay
All right. I’m going to give you three. The first one is if they ask to borrow money. That tells you that they’re not good with money because they’re asking to borrow money, and that they’ve run through all their friends, all their families, and haven’t paid them back, and now that they’re asking you to borrow money. That’s a huge red flag. The next one is the person that’s always in between jobs, can’t get a job, can’t find a job, don’t have a job. They don’t want a job, all right? And that person is not going to change. And lastly, if a person doesn’t want you to earn your own income, or insists on merging accounts, that means that they’re trying to control you with your finances, and that’s a huge red flag.
02:00 Speaker A
There are plenty of, of stereotypes and expectations around dating, namely that a man should pay for everything. That’s one of the most popular. You say that that’s outdated. Explain more on that.
02:16 Patty Assay
That is so outdated, because what women don’t understand is that notion came from the patriarchy. The patriarchy created that, because women couldn’t work. We couldn’t have their own bank accounts. So we were dependent on men for our finances, and that was a means of control. So today, if a woman expects a man to pay for everything, she has to understand that in exchange for that money, she’s giving up her power and control over her own life. So each people, they should be financially independent, and they should contribute to the finances of the relationship.
02:51 Speaker A
And so as you’re starting that contribution together, what are some of the early steps for the conversations about merging finances, about making sure that for all the goals that you’ve collectively set together that you’re hitting those in stride?
03:04 Patty Assay
Sure. There’s I, I put seven in the book, but I’ll just give you a few. So the first one is, you want to make sure that your financial goals align. Maybe you want to buy a house and build investments, and the other person wants to live in an apartment, and they’re happy that way. Your financial goals have to align. You have to know, are you a saver? Are you a spender? What are your money habits like? You also have to know what their credit score is, because you can’t even rent an apartment without a good credit score, right? I mean, it’s crazy. What their debt to income ratio is, how much money they make, whether you have to support other people later on in life, like maybe you want to support your parents, and the other person’s like, “No. Why? I don’t want that.” So those are all the conversations that you need to have before you say, “I do,” because by that time, it’s too late.
04:04 Speaker A
And so as you’re thinking about people who’ve successfully picked right partnerships, and, and had those conversations, and made sure that they are charting that path forward together, where have you seen them continuously have check-ins over time as well, and how important are those check-ins?
04:22 Patty Assay
Those check-ins are huge. And you really need to have a check-in every six months. You need to sit down, put it on the calendar, because if you don’t, you’re not going to remember. Every six months, you’re going to sit down and you’re talk- going to talk about your financial goals. “Are we there yet? What can we do to get there? Are you frustrated about something? Am I frustrated about something?” Get those out on the table, because that’s going to help you in the long run.
04:52 Speaker A
Just lastly, while we have you here, how do you understand perhaps the changes that need to be made when your financial priorities change as well over time? Say, you’re starting a family. Or say you’re looking to own a home in the future.
05:05 Patty Assay
Right. So you need to sit down and figure out how much money you need in the future, and what budgeting you need to do now, because if you just have a child, it’s so expensive, and if you’re not ready for it financially, it’s a huge strain on the relationship. So anytime there’s things that are upcoming, sit down, talk about it, and make sure that you’re on the same page.
Banks have had a stellar first quarter. The major U.S. banks raked in nearly $50 billion in profits in the first three months of the year, The Guardian reported.
That was largely due to Wall Street bank traders, who profited from a volatile stock exchange, Reuters showed.
But even without the extra bump from stock trading, banks are doing well when it comes to interest, the same Reuters article found. And some banks could stand to benefit even more from this one potential rule change.
Morgan Stanley thinks it could have a major impact on Citi in particular.
Upcoming changes for banks
To understand why Morgan Stanley thinks things are going to change at Citi, you need to understand some recent bank rule changes.
Banks make money by lending out money, which usually comes from depositors. But people need access to their money and the right to withdraw whenever they want.
So, banks keep a percentage of all money deposited to make sure they can cover what the average person needs.
But what happens if there is a major demand for withdrawals, as we saw during the financial crisis of 2008?
That’s where capital requirements come in. After the financial crisis, major banks like Citi were required by law to hold a higher percentage of money in order to avoid major bank failures.
For years, banks had to put aside billions of dollars. Money that couldn’t be lent out or even returned to shareholders.
Now, that’s all about to change.
Capital change requirements for major banks
Banks that are considered globally systemically important banking organizations (G-SIBs) have a higher capital buffer than community banks as they usually engage in banking activity that is far more complicated than your average market loan.
The list depends on the size of the bank and its underlying activity, according to the Federal Reserve.
Current global systemically important banks
A proposal from U.S. federal banking regulators could drastically reduce the amount that these large banks have to hold in reserve.
Changes would result in the largest U.S. banks holding an average 4.8% less. While that might seem like a small percentage number, for banks of this size, it equates to billions of dollars, according to a Federal Reserve memo.
The proposed changes were a long time coming, Robert Sarama, a financial services leader at PwC, told TheStreet.
“It’s a bit of a recognition that perhaps the pendulum swung a little too far in the higher capital requirement following the financial crisis, making it harder for banks to participate in some markets,” he said.
Natasha Luscri and Luke Miller consider themselves among the lucky ones. The couple recently bought their first home in the northwest suburbs of Melbourne.
It wasn’t something they necessarily expected to be able to do, but some good fortune with an investment in silver bullion and making use of government schemes meant “the stars aligned” to get into the market. Luke used the federal government’s super saver scheme to help build a deposit, and the couple then jumped on the 5 per cent deposit scheme, which they say made all the difference.
“We only started looking because of the government deposit scheme. Basically, we didn’t really think it was possible that we could buy something,” Natasha told Yahoo Finance.
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Last month they settled on their two bedroom unit, which the pair were able to purchase in an off-market sale – something that is becoming increasingly common in the market at the moment.
Rather perfectly, they got it for about $20-30,000 below market rate, Natasha estimated, which meant they were under the $600,000 limit to avoid paying stamp duty under Victoria’s suite of support measures for first home buyers.
“They wanted to sell it quickly. They had no other offers. So we got it for less than what it would have gone for if it had been on market,” Natasha said.
“We didn’t have a lot of cash sitting in an account … I think we just got lucky and made some smart investment decisions which helped.”
It’s a far cry from when the couple couldn’t find a home due to the rental crisis when they were previously living in Adelaide and had to turn to sub-standard options.
“We’ve managed to go from living in a caravan because we were living in Adelaide and we couldn’t find a rental with our dogs … So we’ve gone from living in a caravan, being kind of tertiary homeless essentially because we couldn’t get a rental, to now having been able to purchase our first home,” Natasha explained.
Rate rises beginning to bite for new homeowners
Natasha, 34, and Luke, 45, are among more than 300,000 Australians who have used the 5 per cent deposit scheme to get into the housing market with a much smaller than usual deposit, according to data from Housing Australia at the end of March. However that’s dating back to 2020 when the program first launched, before it was rebranded and significantly expanded in October last year to scrap income or placement caps, along with allowing for higher property price caps.
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