One of the biggest causes of divorce is money problems. It’s no surprise that more and more couples are choosing to forgo their trip down the aisle; according to the 2009 Census there are 6.7 million unmarried couples.
Although couples are skipping marriage they are still living together which means one financial household. When unmarried couples combine finances, it can present many problems and it doesn’t just happen if you finance something together. Here is some financial advice for couples to avoid dealing with a financial break-up after the real break-up.
- Set up an agreement in writing. There are some unmarried couples who skip the chapel due to the paperwork, but setting up a contract can help you deal with your finances if things end. A written agreement looked over by a lawyer could help you settle things a bit more easily than fighting over who gets what.
- Decide who gets to keep what. When you set up the financial agreement it’s important to include anything you may have purchased as a couple such as a home, car, furniture, even your pet. If you’ve co-signed rental agreements, car loans, or credit cards, you’ll need to know if your name can be removed or what your rights are if your ex fails to make the designated payments.
- Have your own car. If you live in an area where you need a car, it might be best for each of you to have your own car. Whether you co-sign an auto loan or not one of you could end up without transportation after the break up. Avoid this financial mess by simply having your own vehicle.
- Don’t share bank accounts. Although relationships should be based on trust and communications, sharing a bank account could lead to big blow ups. If you do decide to have a joint account as a couple, it might be best to stick with one that is used for paying joint bills and keeping your recreational and savings accounts separate.
- Avoid co-signing for credit cards and loans. Co-signing anything could result in problems after your split as the co-signer is just as responsible for the debt as the original borrower. If you have co-signed for anything create a financial agreement to sort out how the debt will be handled.