We’ve all see the same Judge Joe Brown or Judge Judy case where the ex takes the other to court about financial disputes including but not limited to bank fees, credit card bills, rent, personal loans and the like. So what’s a newly shacked couple to do?
Do they discuss the possible breakup now or do they jump in head first?
According to MSN Money:
The No. 1 hazard of living together is that it offers almost none of the financial or legal protection that marriage does… As unromantic as it sounds, most experts on the unmarried state advise those of us contemplating it to make some kind of contract, even an informal cohabitation agreement, that will protect each person’s assets and document key expectations.
Discuss your expectations now!
Sounds harsh but with so many couples finding themselves in small claims court, it is often best to get whatever financial agreements you have in writing. The reality is that the love you feel now, will not be there should the relationship fall apart.
Sit down and have a frank discussion about your finances with your significant other Decide who will pay the bills and split them in half to be equitable in the distribution. Or decide that each will pay based on their income. This opens the dialogue for expectations about who will pay what at the end of the month.
Here are a few tips on how to get started:
- The Talk
- Start by talking to your significant other about their attitudes towards money. This can include their saving and spending habits? Are they paying their monthly obligations on time? Are they behind on anything? You really don’t want to cosign on a loan with your significant other if they are in collections for $54 or $5400.
- Fair Share
- Decide how you want to split the bills. Will you split it down the middle (half) or will you one person pay a portion based on how much they make? Make sure that whatever you decide is fair for both sides as this can cause a rift if one is carrying most of the burden. Divide your expenses in proportion to your income.
- How will you handle emergencies? Will you have a separate emergency fund? Credit cards? Tap the 401k? These are all things that should be discussed prior to an emergency.
- Separate Accounts
- Keep separate accounts. This keeps the paper trail clean around who pays what over the course of the month. Write this down so that there is no confusion about who’s responsibility it is to pay the gas bill.
- Write it down
- It never fails when a woman takes a man to small claims court that she rarely has everything written down detailing the agreement for which she is now seeking payment. Write it down! Don’t kid yourself into believing that everything will be great should you decide to split. Write it down and protect yourself in the event the relationship does not work out.
Personal finance is just that personal, and brings along with it deep rooted values about money. It is best to get that out in the open and discuss attitudes towards money early on. Spend time discussing the above mentioned with your significant other to avoid issues that may come up later. And ladies, if this is something you are unable to talk with your SO about then perhaps you should rethink the move.