Relationships and finances are both complex issues that we all moan about. Mixing the two can be a recipe for a divorce or breakup between the couple. Hence there is no formula to restore broken relationships. The least you can do is to avoid the crisis by seeking informed facts.  Here's a guide on what you should (and shouldn't) do with your money when you are dangerously in love with someone.

1.    Joint Accounts

The first view is that joint accounts create a sense of unity, commitment and trust that is vital to solidify a relationship. Hence if you manage your own account, you take away the sense of unity and trust that should be present in any committed couple.  The second view is that separate accounts allow each the ability to maintain their independence and strengthening the relationship.

This is a tough decision to make but how can you solve this matter? It is crucial before you consider planning a financial future with someone, to look at what type of personality you each have.

If you manage your finances well, you've got investment plans, and had qualified retirement accounts before you got involved, you will probably be very doubtful to give up that control to your partner. On the other hand, if you were careless on your expenditures you would more readily decide to open joint accounts. In the end the firm decision has to be taken.

However, it is sensible to have a joint bank account for household expenses when you are living together. It is much recommended to open this account if you are taking most responsibility for the household expenses. Open this account in your name, and give your partner signing powers and his own card to that specific account. But make sure you know what will happen to the account should something happen to you. It can happen that the account will be frozen until finalization of the estate which could result in some serious cash flow and other difficulties for the remaining spouse. This account is for convenience and should be completely separate from your own personal bank account. Cited: women24, 2010.

2.    The Built-In Solution

If you still want to have a joint account, but you're worried about one partner being able to control or spend part of the investments, don't fear. Most financial institutions offer a "double sign" feature on their accounts ensuring that money can't be spent, withdrawn or moved without the written consent of both parties. This is a great feature that not only curtails potential conflicts, but will save money. After all, if you have to get your significant other to agree to every purchase, you will probably end spending less, which is good for everyone involved: Cited, About.com, 2010.

3.    Win- win

Both parties should be accountable for the expenses, gone are those days when men had to pay for all expenses but again this depends on the couple's earnings. If a man earns more salary than a woman, he should put extra contribution to the household spending so as a woman.

4.    Decision maker

If you are the one who is saving, investing, and being responsible, and your partner is irresponsibly spending money, then she/he cannot make financial decisions. The chauvinist's view that "man of the house should be in charge of the money" doesn't apply here. Therefore as a partner you must be responsible and honest enough with yourself to recognize who is more responsible and logical between the two of you.

NB!!!

Any decisions that get made are going to impact both of you, so it is important that you both play a vital part in the decision making process. To make these informed decisions means both of you will need to have a thorough understanding of your financial situation so you will be able to arrive at a mutual decision. Communication with your partner is a key here, whining about your problems to your friends won't solve your problems.

5.    Keep your assets upon marriage

When getting married you have to make sure that you have a contract in place that serves the best interests of you and your partner. If you are well-off and have invested on your assets opt to get married out of community of property with the accrual system, which means each party retains complete ownership of the assets they brought into the marriage, and anything that either spouse obtains during the marriage may have to be shared with the other partner should the marriage come to an end. This does not necessarily mean that you don't trust or not committed to your partner, it?s to safeguard your wealth in case of conflict.

It takes two to build up the relationship and financial difference is the main recipe for most divorce cases so it's up to the two of you to prevent this.

 

Sources:

• About.com
• Women24

Last Update: 20 September 2011

by Zanele Matshotyana