Finance and new relationships

This article was originally published in Q Super She’s on Q magazine

It’s smart to think about protecting your finances as soon as dating gets serious.

If love goes wrong, the last thing anyone wants is conflict over possessions, pets or money.

To avoid money and relationship stress, it’s smart to think about protecting your finances as soon as dating gets serious.

Identifying money styles

In the early stages of a relationship, you may not want to be discussing who owns what, who spends what, or what would happen to your possessions if you broke up. That said, you do need to recognise different money styles, says Helen Baker, author of On Your Own Two Feet.

“Sometimes one person is a spender and one’s a saver,” she says.

“Balance is what you should aim to have with money and in a relationship.”

It may be helpful to establish a joint account for bills and to keep separate accounts for spending or splurging. The important thing, however, is to keep an eye on that joint statement, even more so if it’s linked to a credit card or a mortgage.

That said, some couples choose to keep all of their finances separate.

The 18-month deadline

Once a relationship gets serious, you also need to get serious about separate and joint finances, says Baker.

A family lawyer can help you prepare a binding financial agreement, or “pre-nup” that can help protect either party from losing assets that they believe to be rightly theirs should the relationship break down.

However, both parties should be aware this agreement can be challenged in court, says special counsel John Castanho, of Simonidis Steel Lawyers.

Castanho advises a “full and frank” disclosure of assets at this time, as failure to do so may go against you if your relationship does end in legal action.

Buying property together

Buying a property may be the biggest financial commitment you will ever make and a starry-eyed romance won’t help you make good decisions around it, says Baker.

If you decide buying a house together is your next step, talk to a mortgage broker about whether or not split the loan, she suggests. “But, at the end of the day, you need to manage the debt to make sure the other person doesn’t put you in red.”

These days, pin numbers and ATMs, instead of cheque books and co-signing make drawing equity on the loan without a partner’s knowledge quite easy.

Castanho says that while property disputes are individual and complex, this is definitely an area where you should seek advice from a family lawyer.

Splitting possessions

Setting up a new home is exciting, but who pays for what?

“You need to make sure if a partner moves into your home, they’re contributing to costs,” says Baker. As for possessions, it may be a good idea for you to buy the fridge and your partner to buy the bed, or you to buy the sofa and your partner to buy the washing machine, she says. This makes splitting goods easier.

“If you don’t do that, at least write out some kind of agreement,” says Baker.

As for your treasured pet, in 2019 courts tend to treat a much-loved dog or cat like a property asset as there is no legislation on how the court may decide on the “living arrangements” for a pet, says Castanho.

In certain instances, one party may retain the pet to the exclusion of the other, while in others, the pet may travel between mum’s and dad’s residences at the same time as the child(ren). Castanho also says you may wish to include a provision in your binding financial agreement as to what happens with the pet in the event of separation.

Your superannuation

After a split, your ex-partner may lay claim to your superannuation.

Essentially, super is considered as property in the event of a relationship breakdown, so like any other asset it can be divided between partners by agreement or court order. This includes marriage or de facto relationships, both heterosexual or same sex. The rules do not apply to de facto couples in Western Australia.