Financial horror stories

ILLUSTRATION BY RACHEL REVILLA

After almost 30 years of doing trainings on financial education and writing about personal finance, I feel like I have heard (and seen) some of the most unbelievably reality-warping financial horror stories anyone has ever had the misfortune of knowing. But, no. I still get surprised from time to time. Some financial horrors make you angry; some make you frustrated. Yet others have some sort of weird humor in them. Here are some of the best ones I could recall—naturally, with made-up names, but definitely not made-up stories.

A marital nightmare

She was not and never has been a damsel in distress. She was highly successful, easy on the eyes, could be a little high-pitched, but still a catch in all aspects. He was a middle- management executive on the rise, very handsome and sought after. They met through Friends (Should that have been a red flag? Yes, the TV series but they watched it not acted in it), fell in love the night they met, and eight months after, decided to get engaged. They hated calling it a whirlwind romance, being the intellectuals that they were. They talked endlessly about the advantages and disadvantages of getting hitched. He was, after all, divorced (he lived abroad previously) and had a daughter in his first marriage. So, eight months was a long time to weigh their relationship carefully with spreadsheets.

Their wedding was picture-perfect: small, elegant and expensive. Unfortunately their marriage was not, as it turned out. After three months, she first learned of one huge debt. There were heated arguments, but love prevailed. A month after, she found out that the full extent of his debt was in the millions. Not a single disclosure was made in the spreadsheets.

She did her research. Section 4, Article 121 of the Family Code of the Philippines (Executive Order 209) states, “payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.”

Whew, she was under no obligation to pay those. But the trust has been broken. In exactly eight months, their spreadsheets were trashed. The marriage was, indeed, a whirlwind. It started harmlessly with a whirl, but ended painfully.

How to avoid suffering from financial dishonesty

Talking about finances with your significant other (SO) is awkward and not for the faint-hearted. God forbid you do it on the first date, but if you are getting serious about the person you are dating, it is your responsibility to your future state of mental health to find out about possible financial risks in your possible union.

That’s not to say that if you find out something questionable—because he forgets where he placed his electricity bills while you file yours meticulously—the wedding should be called off. To make financial discovery less scary, do not think of it as a make-or-break situation. It can simply be a way to each other’s heart by discussing what things you are willing to accept and help change, but also clearly drawing the line on things that you are not willing to bend for the sake of love—like wanton spending.

What do you need to find out precisely?

Ask these questions. Is your SO in debt? Does he have a financial obligation to his family and until when? If he is a businessman, what is his financial exposure? Sometimes, there is no other way than to state it clearly.

By the way, all these things can be part of a prenup agreement, including how much a person should contribute to the household or whether his or her salary should be set aside for a parent or sibling.

The business of money and friendship

They have known each other for years; their children grew up seeing each other every holiday, every school break, every birthday. They went to church together every Sunday. So one day, when her friends launched a new restaurant business and started to franchise it, she said: “Hey, I am getting a sum of money and want to make sure that it will grow so I can retire well. Why don’t I get a franchise in your business?” It was the most natural thing that could happen, she thought. There were a lot of exciting plans: a fancy ribbon-cutting, a financial model that would make all partners multimillionaires in a couple of years. They all knew if it didn’t work, she would have to work much longer just to keep them afloat. But the smell of success was heady. Besides, they were great friends.

That’s until the business model started to break. The foot traffic did not even reach one-tenth of the numbers in the financial model. The quality of the food from the commissary was substandard. As part of the deal, the company promised to provide staff training and support when waiters or chefs did not show up. That’s when the ghosting started. The business fell apart. Now, she’s working way past retirement while her friends are building a new mansion.

How friendships can survive business deals

In entrepreneurship, as in financial portfolios, never put your eggs in one basket. Do not put your entire retirement kitty in one business, even if your business partners are people you love.

You see, a lot of horror stories start with masks. The pain is strongest when friends are unmasked, and you don’t know the face that peeks from under. Suing provides no solace, just justice, hopefully. So, my advice? Be choosy with business partners. Make sure that unfriending doesn’t ruin your peace of mind.

I love you virus, circa 2023

On Instagram, he was a middle-aged retired American Navy guy. He was always gentlemanly and witty, always called her darling and said she was pretty. She needed all of those.

She had broken up a year ago with a narcissistic boyfriend, totally demolished by the removal of the trauma bond that kept her attached to his shadow. She said she deserved a relationship, even though it was long-distance. Little did she know, it would soon be ‘LDR’: lovely but delusional relationship instead.

By the sixth month, she was completely hooked. They texted every day. He would visit her, he said, but he needed to transfer funds to her first because immigration would not allow him to bring cash. Why did it not occur to her that this was not the 18th century; anyone can access their funds from anywhere in the world? I did say delusional.

After she had given her complete name, address, bank account details, birth date, complete name of her mother and many other (extremely) private details, he disappeared into thin air. So did the cash in her back account. She had been lured into a love scam. At least, the narc said goodbye!?

How to guard your heart and your wallet

Are you kidding me? I have no advice. Don’t be delusional.

Happy Halloween! Trick or treat?

—CONTRIBUTED