You’ve found a place to rent or buy, you’ve worked out that you can afford it and you think there will be enough room for your clothes and your partner’s tecchy toys (or vice versa). That’s a great start! But it’s also important to talk about money before you move in.
Talk about money – where couples can disagree
Denise Knowles, a relationship counsellor from Emotional Insights says many people just assume that their way of sorting out the finances is the only or best way to go. This is what Denise has observed after years of counselling couples:
1. Couples rarely discuss finances in detail.
Many couples talk about what moving in may mean. But not about the way they are going to organise their finances on a day-to-day basis.
2. Many worry about giving up financial independence.
There is a common assumption that having a joint bank account somehow means giving up some independence, which isn’t necessarily the case.
3. Negotiations can bring you closer.
A negotiated joint account where you take joint responsibility for how you want to set up and run the account can be a positive step.
SAVVY TIP: You need to talk openly and honestly about your current and future financial priorities and it’s a good idea to regularly review your financial position.
Be honest about debts
While you’re dating and keeping your finances separate you don’t have to tell your partner about any debts you have – you may choose to, but it’s down to you. However, if you take out joint loans or credit, your credit history will affect your partner’s and vice versa.
SAVVY TIP: It’s not the act of sharing the same address that links your credit file with that of your partner, but having joint credit (although there are some exceptions — see below).
Joint credit could be something straightforward such as a joint account with an overdraft facility, a joint personal loan or – of course – a mortgage.
1. Tell your partner about your debts
Be prepared to listen if he/she has debt problems. Denise Knowles says that individuals are often ashamed by being in debt and may not share this with a partner. “This is a mistake as the deceit can cost the relationship dearly, not just financially.”
SAVVY TIP: Don’t put off telling your partner about your debt problems as the longer you leave it the harder it will be. When I was writing my book about money and relationships, called Financial Bliss, the debt advice charity Stepchange said that around a third of the people they helped with debt problems hadn’t told their partner they were seeking help. In some cases they owed tens of thousands of pounds.
2. Your debt problems may affect your partner if you own the property jointly.
You are not responsible for your partner’s debts if they’re in his or her name. However, these debts could be secured against the value of your property through a charging order. This is a little-known right that credit card companies and banks have to turn unsecured debt into debt that’s secured against the value of a property. The charging order would apply to your stake or equity in the property, if you own it with your partners.
SAVVY TIP: If you’ve been dating but kept your finances separate this may be the first time you’ve had to contemplate pooling some of your money and/or paying bills jointly. Don’t assume your partner will have the same ideas about money as you do.
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