6 ways romance can ruin your finances

In the pursuit of love, passion can overrule prudence

By Erica Sandberg

Love is free, but sealing the deal with the right person may cost you. While most financial advisers preach prudence over passion, some relationship gurus give license to spend or even borrow to achieve coupledom. Take note of how the pursuit can affect your bottom-line -- and when you might be better off by backing off.

1. A long distance affair. Beware the GUs -- geographically undesirables -- who are everything you desire but close. Travel expenses can punch holes in even big budgets. Short Hills, N.J.-based Noah Rosenfarb, a certified public accountant and personal finance specialist who works mainly with wealthy women, says even the ultra-affluent can go under when trying to maintain personal contact with a distant lover. 

"I had a client two years ago who was dating a man from London and she was from New Jersey," says Rosenfarb. "She flew out there all the time. Her budget was $35,000 a month, but she started spending $85,000 per month. In the end, the relationship didn't work out and she overdid it by half a million dollars."

Will the physical gap eventually close? If so, the excursions may be worthwhile. But be realistic -- if neither of you will move, it's time to move on.

2. Catering to chichi tastes. Your darling adores fine dining and spontaneous trips to the Hamptons. Should you cough up the cash for such extravagances, even if you have to pull out the plastic? Kimberly Friedmutter, a life management expert out of Las Vegas with a strong celebrity clientele, says that if you want to pull a prize, stretching your resources to the limit can be wise.

"We place so much importance on save and invest that we've lost the importance of spending," says Friedmutter. "I have no problem with spending. Even debt. If you have something that creates a sensation of love, utilize it. That means you might have to spend money to get that from the other person. Love is a chemical experience in the brain. So use whatever it is that triggers that feeling in the other person."

Friedmutter's ardor over austerity opinion is controversial. You could be setting a dangerous precedent if you're not careful. Bills incurred in the initial wooing stages may be manageable at first, but consumer debt can build fast. When that happens, you may find yourself with empty pockets and an empty heart.

3. Your need to impress. Small in stature? Afraid you're boring? Your own insecurities can lead to overdoing gifts and other extras when trying to capture someone's attention. That person may not need or even care about those things. When motivated by doubt instead of keying into what he or she truly values, excess spending is just plain wasteful.

According to Rosenfarb, men and women alike overcompensate with flashy presents and even cash. "I've had clients give money or loans in an attempt to impress their boyfriends or girlfriends and to keep them. They never get it back, though. Never do this!"

Nor will you attain real love, says Dr. Sally Pallian, author of "Spent: Break the Buying Obsession and Discovering Your True Worth." "It will take more and more money to keep the whole thing going," says Pallian. "How can you be in an intimate, vulnerable relationship if you're not being your authentic self?" She suggests reassuring yourself with soothing statements like, "I'm not my money, I'm not my stuff. I'm likable no matter what I have."

4. Getting gorgeous. Look like a schlepp when dating? Not you! To the mall and salon you go, ready to charge.

Breaking the bank for beauty could be in your best interest, says Friedmutter. "It's nature's game. You feel better, you want to be out and about. Pay for the spray tan, acrylics, hair extensions. You better get your pretty on because that's your commodity!" Lest you think its sexist advice, Friedmutter believes that men in the dating arena ought to open their wallet to enhance their physical appearance, too.

Rosenfarb, however, stresses that it's more important to be yourself and not attempt to modify too much when trying to attract someone. "If you're used to getting your hair done once a week, keep doing that. But people who attempt to totally change themselves for another tend to have buyer's remorse."

5. Working less to adore more. Once you've found the person who knocks your socks off, your previous interest in work or money management can wane.

"Love can be a powerful drug," warns Jordan Harbinger, co-founder of The Art of Charm, a Los Angeles-based company that teaches men to meet and connect with women. "It can distract people from important aspects of their lives because they're using their new relationships to ignore deeper problems and issues." Never allow a crush that could be temporary to crush your more permanent income stream.

Distraction can be devastating to your credit, too, since a neglected budget can lead to unintended debt and collection accounts. Force yourself to face it, especially if marriage is on the agenda. Otherwise, you'll have to explain why your credit score has bottomed out and that those urgent calls are from collectors, not crazy exes. Both can make you appear, well, unattractive.

6. Falling for a financial abuser. And finally, there's the dream date who's really the disastrous mate. Opportunists abound, so be on high alert.

Jesse Mares (who asked that his real name not be used to protect his privacy), CEO of a San Diego software company, says he became enamored by a woman who was just seeking one thing: a man to bankroll her life. "She was a high-paid prostitute who got men to fall in love with her," says Mares. He began paying for swanky dinners and jewelry, but was soon covering her other bills, such as medical insurance. After dropping more than $70,000, he woke up and broke up. Later, he discovered that his friend was also sucked in by the same woman -- and he spent over $150,000 on her before it was over.

To avoid these financial violators, Pallian recommends serious self-analyses when dating. "Be on the lookout for your own need to rescue someone," she says. It's a bad sign if you're spending more on the other person or buying nicer things for them than you would for yourself.

Honor your principles, says Pallian. "If your rule is to always pay your credit cards off every month, but the other person is asking you to spend for more than you can afford and you say, 'yes,' you're on the wrong path."

See related: 5 dumbest money moves lovers make, Infographic: The high cost of love

Published: September 25, 2012

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