Joined in holy matrimony, but don't let cash tear you apart

Honesty, joint accounts, pre-nups... Esther Shaw on how to be financially compatible
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The Independent Online

Many couples spend huge amounts of time and money planning their dream wedding, but fail to make provision for the financial implications of married life. Given that money is one of the major causes of marital arguments - and divorce - this makes little sense.

Many couples spend huge amounts of time and money planning their dream wedding, but fail to make provision for the financial implications of married life. Given that money is one of the major causes of marital arguments - and divorce - this makes little sense.

Those planning to tie the knot, or simply moving in together, need to think carefully about how their finances will work with those of their partner.

Ask yourselves a number of questions, such as whether to get a joint account, says David Elms from IFAP, the marketing body for independent financial advisers. With new responsibilities towards your partner, you also need to consider taking out insurance protection such as life cover and making or changing a will, he adds.

If you are prepared to share your finances, make sure you shop around for the best joint account on offer. "Your combined incomes might make you eligible for a better current account offering higher rates of interest and more benefits," says Anna Sofat from IFA Destini Fiona Price.

Once you've opened a joint account, draw up a budget that covers all your basic outgoings and to which you can both stick. You can then set aside an allowance from the spending money left over for both you and your partner.

This will help to avoid disagreement when one of you wants to buy something.

However, this sort of deal isn't for everyone; many couples prefer to keep their finances separate as this allows them to maintain some independence.

A popular compromise, says Ms Sofat, is a joint account for bills and household expenses, and individual accounts for personal spending.

This could also help with your tax planning, she adds, as you can move any financial products yielding taxable income to the account of the spouse paying tax at a lower rate.

How successful you are at handling your finances together will depend on how open you are from the start about your financial goals, attitudes and values - communication is the key.

While no one goes into a relationship thinking they will split up, some 170,000 couples divorce each year. And even if cash isn't the prime reason for disharmony, quarrels over money during a marital split can only sour the situation. Therefore, while it might seem morbid in the first flush of love, it is worth making plans in case things should go wrong.

One way to do this is by drawing up a pre-nuptial agreement before you tie the knot. This sets out the assets that both partners bring to a marriage, and lays down what they will take if they go their separate ways.

More widely associated with high-profile celebrities such as Catherine Zeta-Jones and Michael Douglas, these agreements are becoming increasingly popular in Britain.

It may not seem like the most trusting and romantic start to married life, but a pre-nup can help you avoid bitter argument and a costly legal battle at a later stage.

There is a fly in the ointment, however: under current laws these agreements are not legally binding.

That said, the English and Welsh courts are beginning to take pre-nups more seriously, and in December the Solicitors Family Law Association (SFLA) published a report calling on the Government to make this type of agreement enforceable.

In the meantime, many lawyers say couples have nothing to lose by signing a pre-nuptial agreement - especially if both partners take independent legal advice and are honest about their finances.

TWO WALLETS BEAT AS ONE

Rebecca and Antony Huckle, from Balham, south London, might not always agree about their shared money but a joint account has made managing their finances a lot easier.

"We used to have separate accounts when we lived in New Zealand, but when we moved to the UK four years ago it made more sense to open a joint account," says Rebecca, 32.

The couple, who have a 16-month-old baby, Joshua, both have debit cards for their Lloyds TSB Premier account and bank on the internet.

"All our earnings go straight into the account - and all the bills come straight out of it," Rebecca says.

Their financial affairs may be simpler but it brings a new sense of accountability: "Antony often wants to know what I've been buying."

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