Bank Account Mergers: Yours, Mine or Ours?

8 April 2011. You can be in a relationship and still be single, financially. Couples in long term and serious relationships who put off marriage for their careers and a myriad of other reasons, don’t think twice about neglecting to discuss joint financial arrangements – or bank accounts. Even though one of the most common causes of a relationship breakdown it turns out, is: money. So, where do you start? What are shared and joint finances in a relationship all about – and what do you need to do, and know to protect yourself? After all, you’ve worked hard to earn your money, invest it and maintain a squeaky clean credit rating and record. One wrong move, by either party could wreck both of you financially. Talking to Your Partner about Money The first step is to get round to talking. Who owns and owes what – and what are your credit ratings? The funny thing is, talking about money with your loved one may be one of the most difficult things to talk about, but it’s worth your while in the long run. What are your spending habits? Are there warning signs your partner may be frivolous – or outright irresponsible with money – and could land you both in a bad credit rating situation, overwhelming credit card debt or even bankruptcy? And don’t just do your homework by expecting straight answers. If you’ve known each other long enough, you should be able to get a clear picture of what your partner’s spending habits really are - from observation and experience. Joint Bank Accounts If you’ve moved in together, before you start planning your home theatre system - figure out if a joint bank account will suit your relationship. If you’re planning to share your life together, aim for the same things in life and eventually buy property together – a joint financial life makes total sense. But you don’t have to consolidate your every last penny into a single pot if you’re not comfortable with it, yet. A great place to start is deciding: what’s mine, yours and ours? Even if there are income gaps between two people in a relationship, you can at least decide how much goes into a joint bank account to pay bills, rent and save – leaving both parties with their discretionary portion of their money, to themselves. What happens if you break up? The simple answer when you start talking about joint bank accounts and investments is: we won’t break up, and deal with it fairly if we do. Unfortunately, and often, these things don’t end on such rosy notes. So make an agreement about who gets what in case of a break up. If both parties are contributing equally, splitting the pot 50-50 is a no brainer. But if there are unequal contributions – how will you handle that? Lest we forget, apart from shared gains, losses are equally shared. Tell us how you manage money in your relationship below. Liz Zuliani EconomyWatch.com http://www.economywatch.com/personal-finance/bank-account-mergers-yours-mine-or-ours.08-04.html