Financial entanglements with ex-partners can create some of the most complicated money situations imaginable. I recently came across a perfect example of this on The Ramsey Show. They illustrate how our desire to “keep the peace” can seriously damage our financial future. The scenario was jaw-dropping: a man was renting his home to his ex-girlfriend (with whom he shares a child) while trying to qualify for a mortgage with his current wife. The problem? His ex had been late on payments about 20 times over five years, damaging his credit score and jeopardizing their ability to buy a new home. It’s one of those money truths we rarely acknowledge—trying to be the “nice guy” with your finances can cost you everything.
This situation highlights a crucial financial principle that Dave Ramsey consistently emphasizes: you cannot set yourself on fire to keep others warm. Though well-intentioned, the husband’s choice was quietly sabotaging his new family’s financial future.
When Good Intentions Lead to Bad Financial Decisions
What struck me most about this case was how a decision made with good intentions had created a five-year financial burden. The husband had essentially become a safety net for his ex’s financial irresponsibility, all while potentially limiting his own family’s progress.
The mortgage payment was only $1,100 per month, yet the ex-girlfriend had been late 20 times over five years, including three times in the current year alone. These weren’t minor delays either—they were more than 30 days late, triggering credit report notifications.
This perfectly illustrates a common financial trap: continuing arrangements that no longer serve us because we fear the conflict that might come from changing them. But as Dave Ramsey often says, sometimes the most loving thing you can do is deliver tough love.
Setting Proper Financial Boundaries
The solution in this case was clear and direct: sell the house. Five years later, with both remarried, the financial tie no longer made sense.
The arrangement had outlived its usefulness and was now actively harmful.
When setting boundaries in financial relationships, especially with ex-partners, I recommend following these guidelines:
- Set a clear timeline with reasonable notice (in this case, perhaps 3-6 months)
- Communicate expectations firmly but respectfully
- Outline the consequences for not meeting agreed terms
- Follow through consistently
- Keep the focus on business, not emotions
The husband could give his ex reasonable notice before selling, but shouldn’t delay too long. There’s a risk the ex might stop paying altogether or damage the property if given too much time.
Your Financial Future Comes First
What resonated most with me was Dave’s reminder that the current wife has a stake in this property, too. Even though her name isn’t on the deed, this asset and its problems affect their joint financial future. Their ability to purchase a home together was being directly impacted by this lingering connection to his past.
This case also raised important questions about priorities. The husband was seeing his child only every other weekend—an arrangement made years ago when he was working multiple jobs. Perhaps it was time to revisit not only the housing situation but also the custody arrangement.
The financial struggles of the ex-girlfriend and her new husband weren’t the responsibility of this couple to solve. Suppose they honestly couldn’t afford necessities like housing and food. In that case, that might warrant a conversation about the child’s well-being and safety, but continuing to provide subsidized housing wasn’t the answer.
I firmly believe that you cannot build a solid financial future while carrying the weight of someone else’s financial irresponsibility. Sometimes the kindest thing you can do—for yourself and ultimately for them—is to stop enabling financial dependence.
The lesson here is universal: financial entanglements that outlive relationships rarely benefit either party in the long run. Clean breaks may be difficult in the moment, but they allow everyone to move forward truly. Five years is more than enough time to maintain a financial connection that’s not working.
When it comes to money and ex-partners, clear boundaries aren’t just financially smart—they’re essential for your emotional and financial well-being. Sometimes the most responsible financial decision is also the hardest one to make, but your future self will thank you for having the courage to make it.
Frequently Asked Questions
Q: How can financial entanglements with ex-partners affect your credit score?
When you maintain financial connections with ex-partners through mortgages, loans, or rental agreements, their payment behavior directly impacts your credit. Late payments, as in this case, can significantly damage your score, making it difficult to qualify for new loans or mortgages. Even if the arrangement seems amicable, missed or late payments will still appear on your credit report.
Q: What’s the best way to handle property shared with an ex-partner?
The most straightforward approach is usually to sell the property and divide the proceeds according to your agreement or legal requirements. If one party wants to retain the property, they should refinance it in their sole name. Continuing as a landlord to an ex-partner often creates ongoing complications and resentment, especially when payment issues arise.
Q: How do you set financial boundaries with ex-partners when children are involved?
Focus on separating parenting responsibilities from financial entanglements. Child support and custody arrangements should be formalized through proper legal channels; however, it is advisable to avoid ongoing financial connections, such as shared property or loans. Document all agreements, communicate expectations directly, and don’t let guilt about the children lead to financial arrangements that harm your future.
Q: When is it time to revisit financial arrangements made during a breakup?
You should reassess financial arrangements when they begin negatively affecting your current financial situation, your life circumstances have significantly changed (like remarriage), the arrangement has been consistently problematic (like repeated late payments), or when several years have passed and both parties have established separate lives. Don’t let arrangements continue on autopilot simply to avoid difficult conversations.
