Modern love | How to navigate the minefield of love and finance

Introduction

There are very few hard “rights” and “wrongs” when it comes to couples and their finances except the undeniable truth that communication is right and burying your head in the sand is wrong.

Every couple is different and a plan that suits one, won’t suit another. Most people agree that if you are more aligned in your financial personality that can be helpful when viewing your finances jointly. Even if you don’t see eye to-eye-on everything, there will be some areas where you are aligned, or that it makes sense to agree to disagree. The main point here is that communication is key to come up with a strategy that works for you and your partner.

Early stages

Only you will know the right time in your relationship to start talking about finances. You will normally get a feel for a partner’s financial personality early on, for example, when discussing sharing the cost of dates. Try not to give this too much weight, the early stages of a relationship may not be a true test of someone’s views on finances. When things get more serious and you begin sharing the costs of things like holidays, make sure you have some frank discussions about expectations. A shared kitty for expenses is one way that couples can manage things like that. Don’t put off these conversations, even in the early stages. It is a good precedent to be open about finances from an early stage.

‘Til death do us part

Continuing on the uplifting theme of things going wrong… I always ask clients about their power of attorney arrangements and their will. Appointing someone as your attorney means they can make decisions on your behalf if you are unable to do so. For example, if you were in hospital, it could allow someone to access your bank account to pay your bills. Wills are important too, especially if you are not married, as it can allow you to make efficient financial decisions as a couple. It is important to review these arrangements regularly to ensure they remain up-to-date and reflective of your wishes. A good solicitor can advise you.

Another thing to consider are pre and post-nuptial agreements. Julia Middleton, a specialist in family law at EMG solicitors said: “It can be beneficial for a pre-nuptial agreement to be prepared and signed before your marriage to clarify the identity of the assets that you each hold prior to your marriage, and how any assets acquired during your marriage are to be divided in the event of a separation. Whilst you would hope and expect your marriage to continue and endure for the rest of your joint lives, in the unfortunate circumstances that this is not the case, a pre-nuptial agreement can be helpful in avoiding any dispute regarding the assets you each owned at the date of your marriage.”

In terms of pre-nuptial agreements, the Money Advice Service explains the legal standing, as it differs between the UK and Scotland. Again, an independent solicitor can advise you.

Joint finances

There are benefits to viewing things jointly, but if being independent is more your style then that is also fine. My husband and I have lived together for 16 years and only opened a joint account about five years ago. We still only use it sporadically.

If some areas of your life lend themselves to joint finances, then it is okay to compartmentalise. We pay childcare and pet insurance jointly. Almost everything else is split in a way that we see as fair and which incentivises us. I buy the children’s clothes because I don’t expect my husband to understand the pleasure that I get from seeing them coordinated and smart. My husband pays the TV bill because I will never be okay with how much he spends on sports channels.

The important thing is that you are aligned in your long-term objectives. The journey that gets you there is very personal. Getting the right financial advice can help to put a plan in place and the opinion of an objective third party can be important.

Debt

Think very carefully about the implications of taking out joint debt. You are both responsible for paying off the whole debt, not just half each, and your credit records will be combined, which means that your credit score can be negatively affected by your partner’s past or future indiscretions or bankruptcy, and vice versa¹.

Again, also think about the worst-case scenario. If one of you becomes unable to work, can you repay the debt on your own? A financial advisor can advise you on suitable protection policies.