Entering and being in relationships brings new opportunities to build wealth that you would not be able to do so on our own.
When you move in together with your partner or you get married this mean that you may share earnings, costs and money plans.
It is important that you plan your finances together as a couple, which you make sure you and your partner’s needs are met.
You and your partner may not have similar attitudes to money. You may feel comfortable having a large mortgage, as interest rates are low. Your partner, however, may have been brought up in a family were being in debt is a ‘no no’. For your partner, debt means insecurity based on a fear that if things go wrong he or she may not be able to service that debt which may place pressure in your keeping your home.
Alternatively your partner may have a higher income than you and wants to pay for everything – making you feel like you are always indebted to him or her.
Whatever the situation, sharing decisions about spending and saving, and discussing money openly, helps avoid arguments and tension. More importantly it can really boost mutual wealth over a lifetime by agreeing a common approach to money choices.
If you move in with your partner or you are already living together, it is likely there you will share bills and other joint expenses. You will need to agree on a system for paying these – will one of you take responsibility for paying them all, or will you divide them up between you?
As partners, there are different possible setups, from totally pooling everything you have to keeping things entirely separate and sharing expenses like flatmates.
The important thing is that you have a clear understanding between you and thereby avoiding unnecessary tension and stress on money matters.
Over time, you may find yourselves combining finances more and more – such as setting up a joint account to cover bills and other expenses, or a savings account for things like holidays.
When you meet a partner, you are normally looking at a long and lasting relationship. Splitting up is the last thing on your mind. Yet break-ups do happen. How do you protect what you own, and how do you handle what you owe?
What happens after a split, financially speaking, depends on the state of bills, savings, property and debts. It is a good idea to keep track of debts and expenses during your relationship so there are no surprises if things come to an end.
This includes knowing about all Hire purchase, car loans, overdrafts, credit card or other debts you or your partner entered into – as individuals or as a couple. Keep in mind that you could be chased for repayments if your name is on any of these agreements or you agreed to act as a guarantor.
If your ex-partner does not pay debts that are in both your names or that you have guaranteed, it could affect your relationship with the bank or institution.
The following are tips that you may wish to follow:
- If the relationship is getting serious and you have substantial assets which you want to protect speak to a lawyer and you may consider entering into a pre-nuptial agreement – a contract that is entered into prior to marriage or a civil union which includes provisions for the division of property in the event of a separation, divorce or dissolution.
- If the relationship breaks up:
- Make sure your pay goes into your own bank account (not a joint one) and change password and PIN numbers your ex-partner may know
- You may need to freeze or close every account, loan, or debt you have set up jointly, including the ones where your partner only had authorised user rights.
- Write all money-related down in case there are disagreements later.
- Agree on the distribution of assets, including the name on the title of registered assets such as cars and houses.