Falling in love rarely comes with a spreadsheet and solicitor, but according to one financial planner, it probably should. Brian Court, a certified financial planner and financial adviser at JustAnswer, told Newsweek that protecting your money in a relationship is not a question of distrust, but preparation. While no couple starts out planning for a breakup, failing to safeguard finances early on can turn an already painful split into a devastating one if the relationship was to ever break down.
There is no official tally of how many nonmarital romantic relationships end in the U.S. each year, but the Centers for Disease Control and Prevention (CDC) tracks legal divorces, recording roughly 672,000 annually—a reminder that even relationships built on paperwork and legal commitment frequently unravel. For cohabiting couples who never marry, the financial fallout of a breakup can be just as severe, but without the legal framework that governs divorce. Court shared with Newsweek his five tips for protecting your finances while still building a life with a partner.
"Even if you decide to open a joint checking or savings account, each person should still maintain an account in their own name," Court said. He stressed this is not about hiding money from your other half but preserving financial independence while building a life with them. Ideally, someone should have enough accessible savings to cover several months of basic living expenses—enough for housing, transportation, food or legal costs if the relationship suddenly ended.
"You never want to be in a situation where you know a relationship should end but you can't afford to leave," he added. Before moving in together, Court recommends an honest conversation about income, debt, credit history, spending habits, savings and financial obligations. A partner may be carrying significant credit card debt, student loans, tax problems or poor credit the other does not know about.
That does not necessarily mean the relationship should never move forward, Court said, but both people should know what they are getting into before finances become entangled. "Financial surprises are often much harder to deal with after you've already signed a lease, purchased a home or combined accounts," he said. Cosigning loans or opening joint credit accounts without fully understanding the consequences is one of the biggest financial mistakes couples make, according to Court.
If a person's name is on a loan, they are generally responsible for that debt "regardless of what your partner promises to pay." He gave the example of a cosigned car loan: if the relationship ends, the lender does not care who is driving the car—both names on the loan mean both people can be held responsible for payments. His advice before signing anything jointly: "Could I afford this payment by myself if I had to?" For couples buying a house together, contributing unequal amounts toward a down payment, paying for major renovations or combining significant assets, Court suggests putting the arrangement in writing. For unmarried couples, that might mean considering a cohabitation or property agreement drawn up with an attorney; married couples might consider a prenuptial or postnuptial agreement.
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